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EXHIBIT 4.02
TERMS AND CONDITIONS OF THE NOTES
The U.S. $500,000,000 6 5/8% Notes due January 29, 2004 (the "Notes") have
been issued under a Fiscal Agency Agreement, dated as of January 29, 1997 (the
"Fiscal Agency Agreement"), between Kellogg Company (the "Company"), Citibank,
N.A., as fiscal agent (the "Fiscal Agent," which expression shall include any
successor as fiscal agent under the terms of the Fiscal Agency Agreement), and
the paying agents named therein (such paying agents, the Fiscal Agent, in its
capacity as principal paying agent, and any successor or additional paying
agents appointed pursuant to the Fiscal Agency Agreement are referred to
collectively herein as the "Paying Agents"). Certain statements herein are a
summary of, and are subject to the detailed provisions of, the Fiscal Agency
Agreement. The Fiscal Agency Agreement contains provisions which are expressed
to be for the benefit of the holders of the Notes (the "Noteholders") and of the
coupons attached thereto (the "Couponholders") and such provisions shall be
deemed to be incorporated in these Conditions. Copies of the Fiscal Agency
Agreement are available for inspection at the offices of the Fiscal Agent and
the Paying Agents specified on Schedule I hereto (or, in the case of any
successor Fiscal Agent or Paying Agent, identified in the notification to
Noteholders of the appointment of such successor in accordance with Section 11
of the Conditions). The Noteholders and the Couponholders will be deemed to have
notice of and be bound by all the provisions contained in the Fiscal Agency
Agreement.
Section 1. Delivery, Form and Denomination.
The Notes will initially be represented by a single temporary global note
(the "Temporary Global Note"), without interest coupons (the "Coupons"), which
will be deposited with Citibank, N.A, as common depositary (the "Common
Depositary") for Morgan Guaranty Trust Company of New York, Brussels Office, as
the operator of the Euroclear System ("Euroclear"), and Cedel Bank, S.A. ("Cedel
Bank"). The beneficial interests in the Temporary Global Note will be
exchangeable for definitive Notes, with Coupons, upon and to the extent that the
certification requirements set forth in the Fiscal Agency Agreement have been
complied with. Certain details as to procedures and prerequisites for owners of
beneficial interests in the Temporary Global Note to exchange such interests for
definitive Notes are set forth in the Temporary Global Note and the Fiscal
Agency Agreement. Any definitive Notes issued in exchange for such interests
will be in bearer form only in denominations of U.S. $1,000, U.S. $10,000 and
U.S. $100,000 with Coupons attached thereto, and title to such definitive Notes
and Coupons will pass upon delivery.
Each definitive Note and Coupon will carry substantially the following
legend:
"This obligation has not been registered under the United States
Securities Act of 1933, as amended, and may not be offered or sold in
contravention of that Act. Any United States person who holds this obligation
will be subject to limitations under the United States income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the United
States Internal Revenue Code."
Section 2. Status.
The Notes constitute direct, unconditional and unsecured obligations of
the Company and will at all times rank equally among themselves and equally
(subject to such obligations as are mandatorily preferred by law) with all other
present and future unsecured and unsubordinated obligations of the Company.
Neither the Fiscal Agency Agreement nor the Notes limit other indebtedness or
securities which may be incurred or issued by the Company. The Fiscal Agency
Agreement and the Notes contain only the financial or similar restrictions on
the Company set forth below in these Conditions. The Company may, without the
consent of the holders of the Notes and Coupons, issue from time to time
additional Notes under the Fiscal Agency Agreement which will be treated as a
single series with the Notes.
Section 3. Limitations upon Liens.
Exhibit C, Page 1
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(a) The Company will not, nor will it permit any Restricted
Subsidiary (as defined below) to issue, assume or guarantee any indebtedness for
money borrowed (hereinafter in this Section 3 called "Debt"), secured by a
mortgage, security interest, pledge, lien or other encumbrance (mortgages,
security interests, pledges, liens and other encumbrances being hereinafter in
this Section 3 called "mortgage" or "mortgages") upon any Principal Property (as
defined below) of the Company or any Restricted Subsidiary or upon any shares of
stock or indebtedness of any Restricted Subsidiary (whether such Principal
Property, shares of stock or indebtedness are owned at the date of the Fiscal
Agency Agreement or thereafter acquired) without in any such case effectively
providing concurrently with the issuance, assumption or guaranty of any such
debt that the Notes (together with, if the Company shall so determine, any other
indebtedness of or guaranteed by the Company or such Restricted Subsidiary
ranking equally with the Notes and then existing or thereafter created) shall be
secured equally and ratably with (or, at the option of the Company, prior to)
such Debt so long as such Debt shall be so secured; provided, however, that the
foregoing restrictions shall not apply to Debt secured by:
(i) mortgages on property, shares of stock or indebtedness
(hereinafter in this Section 3 called "property") of any corporation
existing at the time such corporation becomes a Restricted Subsidiary;
(ii) mortgages on property existing at the time of acquisition
of the affected property by the Company or a Restricted Subsidiary, or
mortgages to secure the payment of all or any part of the purchase
price of such property upon the acquisition of such property by the
Company or a Restricted Subsidiary or to secure any Debt incurred by
the Company or a Restricted Subsidiary prior to, at the time of, or
within 360 days after the later of the acquisition, the completion of
construction (including any improvements on an existing property) or
the commencement of commercial operation of such property, which Debt
is incurred for the purpose of financing all or any part of the
purchase price thereof or construction or improvements thereon;
provided, however, that in the case of any such acquisition,
construction or improvement, the mortgage shall not apply to any
property theretofore owned by the Company or a Restricted Subsidiary,
other than, in the case of any such construction or improvement, any
real property on which the property so constructed, or the improvement,
is located which in the opinion of the Board of Directors (or duly
authorized committee thereof) was prior to such construction or
improvement, substantially unimproved for the use intended by the
Company or such Restricted Subsidiary;
(iii) mortgages on property of a Restricted Subsidiary
securing Debt owing to the Company or to another Restricted Subsidiary;
(iv) mortgages on property of a corporation existing at the
time such corporation is merged into or consolidated with the Company
or a Restricted Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation or firm as an entirety
or substantially as an entirety to the Company or a Restricted
Subsidiary; provided, however, that any such mortgages do not attach to
or affect property theretofore owned by the Company or such Restricted
Subsidiary;
(v) mortgages on property owned or leased by the Company or a
Restricted Subsidiary in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any State
thereof, or in favor of any other country or any political subdivision
thereof, or in favor of holders of securities issued by any such
entity, pursuant to any contract or statute (including, without
limitation, mortgages to secure Debt of the pollution control or
industrial revenue bond type) or to secure any indebtedness incurred
for the purpose of financing all or any part of the purchase price or
the cost of construction of the property subject to such mortgages;
(vi) mortgages existing at the date of the Fiscal Agency
Agreement;
(vii) landlords' liens on fixtures located on premises leased
by the Company or a Restricted Subsidiary in the ordinary course of
business;
Exhibit C, Page 2
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(viii) mortgages on property of the Company or a Restricted
Subsidiary to secure partial, progress, advance or other payments or
any Debt incurred for the purpose of financing all or any part of the
purchase price or the cost of construction, development, or substantial
repair, alteration or improvement of the property subject to such
mortgages if the commitment for the financing is obtained not later
than one year after the later of the completion of or the placing into
operation (exclusive of test and start-up periods) of such constructed,
developed, repaired, altered or improved property;
(ix) mortgages arising in connection with contracts and
subcontracts with or made at the request of the United States of
America, or any state thereof, or any department, agency or
instrumentality of the United States of America or any state thereof;
(x) mechanics', materialmen's, carriers' or other like liens
arising in the ordinary course of business (including construction of
facilities) in respect of obligations which are not due or which are
being contested in good faith;
(xi) any mortgage arising by reason of deposits with, or the
giving of any form of security to, any governmental agency or any body
created or approved by law or governmental regulations, which is
required by law or governmental regulation as a condition to the
transaction of any business, or the exercise of any privilege,
franchise or license;
(xii) mortgages for taxes, assessments or governmental charges
or levies not yet delinquent, or mortgages for taxes, assessments or
governmental charges or levies already delinquent but the validity of
which is being contested in good faith;
(xiii) mortgages (including judgment liens) arising in
connection with legal proceedings so long as such proceedings are being
contested in good faith and, in the case of judgment liens, execution
thereon is stayed; or
(xiv) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any
mortgage referred to in the foregoing clauses (i) to (xiii), inclusive;
provided, however, that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at the time of
such extension, renewal or replacement mortgage, and that such
extension, renewal or replacement mortgage shall be limited to all or a
part of the property which secured the mortgage so extended, renewed or
replaced (plus improvements on such property).
(b) Notwithstanding the foregoing provisions of this Section 3, the
Company and any one or more Restricted Subsidiaries may issue, assume or
guarantee Debt secured by mortgages which would otherwise be subject to the
foregoing restrictions in an aggregate amount which, together with all other
Debt of the Company and its Restricted Subsidiaries which (if originally issued,
assumed or guaranteed at such time) would otherwise be subject to the foregoing
restrictions (not including Debt permitted to be secured under clauses (i)
through (xiv) above), does not at the time exceed 10% of Consolidated Net
Tangible Assets (as defined below), as shown on the latest quarterly
consolidated financial statements of the Company preceding the date of
determination.
(c) The Company will not, nor will it permit any Restricted Subsidiary
to, enter into any arrangement with any person providing for the leasing by the
Company or any Restricted Subsidiary of any Principal Property of the Company or
any Restricted Subsidiary (whether such Principal Property is owned at the date
of the Fiscal Agency Agreement or thereafter acquired) (except for temporary
leases for a term of not more than three years and except for leases between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries), which
Principal Property has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such person (herein referred to as a "Sale and
Lease-Back Transaction"), unless (a) the Company or such Restricted Subsidiary
would be entitled, pursuant to the provisions of Sections 3(a) or (b), to issue,
assume or guarantee Debt secured by a mortgage upon such Principal Property at
least equal in amount to the Attributable Debt in respect of such arrangement
without
Exhibit C, Page 3
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equally and ratably securing the Notes; provided, however, that from and after
the date on which such arrangement becomes effective, the Attributable Debt in
respect of such arrangement shall be deemed for all purposes under Section 3 to
be Debt subject to the provisions of Section 3; or (b) the Company shall apply
an amount in cash equal to the Attributable Debt in respect of such arrangement
to the retirement (other than any mandatory retirement or by way of payment at
maturity), within 120 days of the effective date of any such arrangement, of
Debt of the Company or any Restricted Subsidiary (other than Debt owned by the
Company or any Restricted Subsidiary and other than Debt of the Company which is
subordinated to the Notes) which by its terms matures at or is extendible or
renewable at the option of the obligor to a date more than twelve months after
the date of the creation of such Debt.
(d) For purposes of this Section 3,
"Attributable Debt" means the present value (discounted at the actual
percentage rate inherent in a Sale and Lease-Back Transaction (as defined
below), as determined in good faith by the Company, compounded semi-annually) of
the obligation of a lessee for rental payments during the remaining term of any
lease (including any period for which such lease has been extended). Such rental
payments shall not include amounts payable by the lessee for maintenance and
repairs, insurance, taxes, assessments and similar charges and for contingent
rents (such as those based on sales). In case of any lease which is terminable
by the lessee upon the payment of a penalty, such rental payments shall also
include such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated. Any determination of any actual percentage rate inherent in any such
Sale and Lease-Back Transaction made in good faith by the Company shall be
binding and conclusive.
"Consolidated Net Tangible Assets" means, as of any particular time,
the total amount of assets (less applicable reserves) after deducting therefrom
(a) all current liabilities (excluding any thereof which are by their terms
extendible or renewable at the option of the obligor thereon to a time more than
12 months after the time as of which the amount thereof is being computed and
excluding current maturities of long-term indebtedness), and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangible assets, all as shown in the latest quarterly consolidated
balance sheet of the Company contained in the Company's then most recent annual
report to stockholders or quarterly report filed with the United States
Securities and Exchange Commission, as the case may be, except that assets shall
include an amount equal to the Attributable Debt in respect of any Sale and
Lease-Back Transaction not capitalized on such balance sheet.
"Principal Property" means any manufacturing plant or facility which is
located within the continental United States of America and is owned by the
Company or any Restricted Subsidiary, except any such plant or facility which
the Board of Directors (or a duly authorized committee thereof) of the Company
by resolution declares from time to time is not of material importance to the
total business conducted by the Company and its Restricted Subsidiaries as an
entirety and which, when taken together with all other plants and facilities as
to which such a declaration has been made, are so declared from time to time by
the Board of Directors (or duly authorized committee thereof) of the Company to
be not of material importance to the total business conducted by the Company and
its Restricted Subsidiaries as an entirety.
"Restricted Subsidiary" means any Subsidiary (a) substantially all of
the property of which is located within the continental United States, (b) which
owns a Principal Property, and (c) in which the Company's investment, direct or
indirect and whether in the form of equity, debt or advances, as shown on the
consolidating balance sheet used in the preparation of the latest quarterly
consolidated financial statements of the Company preceding the date of
determination, is in excess of 1% of the total consolidated assets of the
Company as shown on such quarterly consolidated financial statements; provided,
however, that the term "Restricted Subsidiary" shall not include any Subsidiary
which is principally engaged in leasing or in financing installment receivables
or which is principally engaged in financing the Company's operation outside the
continental United States of America.
"Subsidiary" means any corporation which is consolidated in the
Company's accounts and any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
Exhibit C, Page 4
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majority of the board of directors of such corporation (irrespective of whether
or not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by the Company, or by
one or more Subsidiaries, or by the Company and one or more Subsidiaries.
Section 4. Company May Consolidate, etc., Only on Certain Terms.
(a) The Company will not merge into or consolidate with, or sell or
convey all or substantially all of its assets to, any other corporation, unless
either (A) the Company shall be the surviving corporation in the case of a
merger or (B) (I) the surviving, resulting or transferee corporation shall
expressly assume the due and punctual payment (including Additional Amounts, if
any) of all the Notes according to their tenor, and the due and punctual
performance of all of the covenants and obligations of the Company under the
Notes, the Coupons and Fiscal Agency Agreement in respect of the Notes, by
supplemental agreement reasonably satisfactory to the Fiscal Agent, (II) such
successor corporation shall agree to indemnify and hold harmless the holder of
each Note or Coupon against (y) any tax, assessment or governmental charge
imposed on such holder by a jurisdiction other than the United States of America
or any political subdivision or taxing authority thereof or therein with respect
to, and withheld on the making of, any payment of principal of or interest on
such Note (including Additional Amounts, if any, in respect thereof) and which
would have been so imposed and withheld had such merger, consolidation, sale or
conveyance not been made and (z) any tax, assessment or governmental charge
imposed on or relating to such merger, consolidation, sale or conveyance, (III)
immediately after such merger, consolidation, sale or conveyance, the Notes will
not be subject to United States Federal estate tax as a result thereof, if held
by a person who at the time of death is not a citizen or resident of the United
States of America unless such successor corporation shall have agreed, by
supplemental agreement, to indemnify the persons liable therefor for the amount
of United States Federal estate tax attributable to and paid in respect of any
Notes includable in the gross estate of a person who at the time of death is not
a citizen or resident of the United States of America and (IV) the Fiscal Agent
shall have received the documentation required in the context by the Fiscal
Agency Agreement. In calculating the amount of tax attributable to any Notes for
purposes of sub-clause (III) above in accordance with the provisions of the
United States Internal Revenue Code of 1986, the gross estate of the decedent
shall be deemed to include only Notes issued under the Fiscal Agency Agreement.
(b) Upon any merger, consolidation, sale or conveyance as provided in
Section 4(a), the successor corporation shall succeed to and be substituted for,
and may exercise every right and power of and be subject to all the obligations
of, the Company under the Notes, the Coupons and the Fiscal Agency Agreement in
respect of the Notes, with the same effect as if such successor corporation had
been named as the Company therein and herein and the Company shall be released
from its liability as obligor under the Notes, the Coupons and the Fiscal Agency
Agreement in respect of the Notes.
Section 5. Interest.
(a) Period of Accrual of Interest. The Notes will bear interest from
January 29, 1997 (the "Issue Date"). Interest on each Note will cease to accrue
from the due date for the principal thereof unless (i) the maturity of Notes has
been accelerated pursuant to Section 9 of the Conditions and/or (ii) upon due
presentation of the Note, the payment of principal is improperly withheld or
refused. In either such event, the affected Notes will continue to bear interest
at the rate of 6-5/8% per annum, after as well as before judgment, until such
Notes shall be paid in full or until the seventh day following the date on which
notice is given to the affected Noteholders to the effect that funds for the
payment of principal in respect of all outstanding Notes have been received by
the Fiscal Agent and are available for collection (provided that sufficient
funds have actually been received and are available for such purpose), whichever
is the earlier.
(b) Interest Payment Dates and Interest Periods. Interest on the Notes
is payable in arrears on January 29 of each year (commencing with January 29,
1998) or, if any such day is not a Business Day (as defined below), the
immediately following day which is a Business Day. Every day on which interest
on the Notes is payable is herein called an "Interest Payment Date." If any
Interest Payment Date would otherwise be a day which is not a
Exhibit C, Page 5
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Business Day, the Interest Payment Date shall be postponed to the next day which
is a Business Day and no additional interest shall be payable on account of such
delayed payment. As used in this Condition, "Business Day" means a day (other
than a Saturday or Sunday) on which banks are open for business in New York City
and the relevant place of payment.
(c) Coupons. Interest due on each Interest Payment Date will be paid
against presentation and surrender of the appropriate Coupons attached to the
Notes on issue as they severally mature, in accordance with Section 7 of the
Conditions.
(d) Rate of Interest. The rate at which interest shall accrue from time
to time in respect of the Notes will be 6-5/8% per annum. In the event that
interest is required to be calculated for a period of less than one year, it
will be calculated on the basis of a 360-day year consisting of 12 months of 30
days each and in the case of an incomplete month the actual number of days
elapsed.
Section 6. Redemption.
(a) Final Redemption. Except as provided below, the Notes may not be
redeemed prior to maturity. Unless previously redeemed or repurchased and
cancelled, the Notes will be payable at par on January 29, 2004 or such earlier
date on which the same shall be due and payable in accordance with the terms and
conditions of the Notes; provided that if the maturity date of the Notes is not
a Business Day, the Notes will be payable at their principal amount on the next
succeeding Business Day (and no interest shall accrue for the period from
January 29, 2004 to such payment date).
(b) Redemption for Taxation Reasons. The Company may, at its option,
redeem the Notes, as a whole but not in part, upon not more than 60 nor less
than 30 days' notice at 100% of their principal amount, together with interest
accrued to the date fixed for redemption, if (i) at any time the Company becomes
or would become obligated to pay to the holder of any Note or Coupon Additional
Amounts under Section 8 of the Conditions or (ii) on or after January 24, 1997
any action or further action shall have been taken by any taxing authority, or
any action shall have been brought in a court of competent jurisdiction, of the
United States of America or any political subdivision or taxing authority
thereof or therein, whether or not such action was taken or brought with respect
to the Company or any affiliate thereof, or any change, amendment, application,
interpretation or execution shall have been officially proposed which, in any
such case in the written opinion of independent counsel reasonably acceptable to
the Company, will result in the Company becoming obligated to pay Additional
Amounts and such obligation cannot be avoided by the Company taking reasonable
measures available to it, then the Company may, at its option, redeem the Notes,
as a whole but not in part, upon not more than 60 nor less than 30 days' notice
of 100% of their principal amount, together with interest accrued thereon to the
date fixed for redemption; provided that no such notice of redemption shall be
given earlier than 90 days prior to the earliest date on which the Company would
be obligated to pay such additional amounts were a payment in respect of the
Notes then due. Prior to the giving of notice of redemption of the Notes
pursuant to this paragraph, the Company will deliver to the Fiscal Agent (i) a
certificate setting forth a statement of facts showing that the conditions
precedent to the right to effect such redemption have occurred and (ii) a copy
of such opinion of independent counsel.
Except as set forth in the immediately succeeding paragraph, the
Company shall redeem the Notes, as a whole but not in part, upon not more than
60 nor less than 30 days' notice, at 100% of their principal amount, together
with interest accrued to the date fixed for redemption, after determining, based
on a written opinion of independent counsel reasonably acceptable to the
Company, that any certification, identification or information reporting
requirements of United States law or regulation with regard to the nationality,
residence or identity (as distinguished from status as a United States Alien (as
defined below)) of a beneficial owner who is a United States Alien of a Note or
a Coupon thereto would be applicable to a payment of principal of or interest on
a Note or a Coupon appertaining thereto made outside the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction (the "United
States") by the Company or a Paying Agent as agent for the Company and not as
agent for the beneficial owner (other than a
Exhibit C, Page 6
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requirement (i) that would not be applicable to a payment made directly to the
beneficial owner, (ii) that would not be applicable to a payment made to a
custodian, nominee or other agent of the beneficial owner or (iii) that could be
satisfied by a holder who is not the beneficial owner thereof or any custodian,
nominee or other agent certifying that the beneficial owner is a United States
Alien; provided, however, in each case referred to in clause (ii) and (iii)
above, that payment by a custodian, nominee or agent (who is not under present
law subject to information reporting requirements) to the beneficial owner is
not otherwise subject to any requirement referred to in this sentence). The
Company shall notify the Fiscal Agent of such determination as soon as
practicable, stating in the notice the effective date of such certification,
identification or information reporting requirements and the dates within which
the redemption by the Company shall occur, and the Fiscal Agent shall give
prompt notice thereof in accordance with Section 11 of the Conditions. Such
redemption of the Notes must take place on a date specified by the Company, such
date to be not later than one year after the publication of the initial notice
of the Company's determination of such certification, identification or
information reporting requirements. The Company shall not so redeem the Notes,
however, if the Company, based on a written opinion of independent counsel
reasonably acceptable to the Company, shall determine, not less than 30 days
prior to the date fixed for redemption or purchase, as the case may be, that no
payment in respect of the Notes would be subject to any requirement described
above, in which case the Company shall notify the Fiscal Agent, which shall give
prompt notice of that determination in accordance with Section 11 of the
Conditions, and any earlier redemption notice under this paragraph shall be
revoked and of no further effect.
Notwithstanding the immediately preceding paragraph, if and so long as
the certification, identification or information reporting requirements referred
to therein would be fully satisfied with respect to the Notes by payment of
United States withholding, backup withholding or a similar tax, the Company may
elect, prior to the giving of notice of redemption, to have the provisions of
this paragraph apply in lieu of the provisions of the immediately preceding
paragraph. In that event, the Company will pay such Additional Amounts as are
necessary in order that, following the effect the date of such requirements,
every net payment made outside the United States by the Company or a Paying
Agent of the principal of and interest on a Note or a Coupon appertaining
thereto to a holder who is a United States Alien (but without any requirement
that the nationality, residence or identity (as distinguished from status as a
United States Alien) of the beneficial owner be disclosed to the Company, any
Paying Agent or any United States governmental authority), after deduction for
United States withholding, backup withholding or similar tax (other than a
withholding, backup withholding or similar tax which would not be applicable in
the circumstances referred to in the fourth parenthetical clause of the first
sentence of such immediately preceding paragraph) but before deduction or
withholding on account of tax, assessment or other governmental charge described
in (a), (b), (c), (d), (e), (f), (g) or (h) of Section 8 of the Conditions, will
not be less than the amount provided in the Note or the Coupon to be then due
and payable. If the Company elects to pay such Additional Amounts and as long as
it is obligated to pay such Additional Amounts, the Company may subsequently
redeem the Notes, at any time, as a whole but not in part, upon not more than 60
nor less than 30 days' notice, at 100% of their principal amount, plus accrued
interest to the date fixed for redemption (without reduction for applicable
withholding taxes).
Notice of its election or obligation to redeem Notes pursuant to this
clause (b) shall be given to holders of Notes by the Company by publication at
least twice in the manner required by Section 11 of the Conditions, the first
such publication and such mailing to be not more than 60 days nor less than 30
days prior to the date fixed for redemption.
(c) Requirements as to Notices of Redemption by Company. Neither the
failure to give notice nor any defect in any notice given to any particular
holder of a Note shall affect the sufficiency of any notice with respect to
other Notes. Notices to redeem Notes shall specify the date fixed for
redemption, the redemption price, the place or places of payment, that payment
will be made upon presentation and surrender of the Notes to be redeemed,
together with all appurtenant Coupons, if any, maturing subsequent to the date
fixed for redemption, that interest accrued to the date fixed for redemption
(unless the redemption date is an Interest Payment Date) will be paid as
specified in said notice, and that on and after said date interest on the Notes
so to be redeemed will cease to accrue. Such notice shall also state that the
conditions precedent to such redemption have occurred and state the amount of
Notes to be redeemed or purchased.
Exhibit C, Page 7
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(d) Cancellation. All Notes redeemed pursuant to this Section 6 of the
Conditions will be forthwith cancelled (together with all unmatured Coupons
appertaining thereto) and may not be reissued or resold.
Section 7. Payments.
Payments of principal and interest will be, made against surrender of
the Notes or Coupons, as the case may be, at the offices of any of the Paying
Agents specified in the preamble to these Conditions, subject in each case to
any applicable laws or regulations. Such payments will be made, at the option of
the holder, by a United States dollar check, or by a transfer to a United States
dollar account maintained by the payee with a bank outside the United States. No
payment on any Note or Coupon will be made at any office of the Fiscal Agent or
any other Paying Agents maintained by the Company in 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.
The Company has initially appointed the Paying Agents specified on
Schedule I hereto. The Company agrees that, so long as any of the Notes are
outstanding, it will maintain a paying agent outside the United States, and so
long as the Notes are listed on the Luxembourg Stock Exchange and the Luxembourg
Stock Exchange shall so require, it will maintain a paying agent in Luxembourg,
for payments with respect to definitive Notes and the Coupons appertaining
thereto and where the definitive Notes may be presented or surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Notes, the Coupons and the Fiscal Agency Agreement may be served. The Company
may with the approval of the Fiscal Agent change any of Paying Agents or their
specified offices. Notice of any change in the Paying Agents or in their
specified offices will be given to the Noteholders in accordance with the
provisions of Section 11 of the Conditions.
Except as ordered by a court of competent jurisdiction or as required
by law, the Paying Agents, the Fiscal Agent and the Company shall be entitled,
notwithstanding any notice to the contrary, to treat the bearer of any Note or
Coupon as the absolute owner thereof (whether or not such Note or Coupon shall
be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment when due in full or in part and
for all other purposes and shall not be required to obtain any proof thereof or
as to the identity of the bearer.
In the case of the redemption of any Note prior to maturity, the Note
shall be presented for payment together with all unmatured Coupons appertaining
to that Note; failing presentation of all such Coupons, the payment of principal
will only be made against the Noteholder giving such indemnity and providing
such other documents in respect of the missing unmatured Coupons as the Company
may require. In the case of any such redemption, the unmatured Coupons (if any)
appertaining thereto shall become void and no payment shall be due in respect
thereof.
If the due date for redemption of any Note is not an Interest Payment
Date, the interest accrued from the preceding Interest Payment Date (or from the
Issue Date, as the case may be) shall be payable only against surrender of the
relevant Note.
All monies paid by the Company to the Fiscal Agent for payment of the
principal of or interest on any Note and remaining unclaimed for two years after
such payment has been made shall be repaid to the Company, and to the extent
permitted by law, the holder of such Note thereafter may look only to the
Company for payment as a general unsecured creditor thereof. Subject to
applicable laws and regulations, any payment that will be made by the Company
under this paragraph with respect to Notes will be made outside the United
States.
Section 8. Payment of Additional Amounts.
The Company will pay as additional interest on the Notes or Coupons to
the holder of any Note or Coupon who is a United States Alien (as defined below)
such Additional Amounts as may be necessary in order that every net payment by
the Company or any Paying Agent of the principal of or interest on such Note or
Coupons (including upon redemption), after deduction or withholding for or on
account of any present or future tax, assessment or other governmental charge
imposed upon or as a result of such payment by the United States or any
political subdivision or
Exhibit C, Page 8
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taxing authority thereof or therein, will not be less than the amount provided
for in such Note or in such Coupon to be then due and payable before any such
tax, assessment or other governmental charge; provided, however, that the
foregoing obligation to pay Additional Amounts shall not apply to:
(a) any tax, assessment or other governmental charge which
would not have been so imposed but for (i) the existence of any present
or former connection between such holder (or between a fiduciary,
settlor, beneficiary, member or shareholder of, or a person having a
power over, such holder, if such holder is an estate, a trust, a
partnership or a corporation) and the United States, including, without
limitation, such holder (or such fiduciary, settlor, beneficiary,
member, shareholder or person having such a power) being or having been
a citizen or resident or treated as a resident thereof or being or
having been engaged in a trade or business therein or being or having
been present therein or having or having had a permanent establishment
therein, (ii) the failure of such holder to comply with any requirement
under United States income tax laws or regulations to establish
entitlement to exemption from such tax, assessment or other
governmental charge, (iii) such holder's present or former status as a
personal holding company or a foreign personal holding company with
respect to the United States, as a controlled foreign corporation with
respect to the United States, as a passive foreign investment company
with respect to the United States, as a foreign tax exempt organization
with respect to the United States or as a corporation which accumulates
earnings to avoid United States Federal income tax, or (iv) payment
being made in the United States;
(b) any tax, assessment or other governmental charge imposed
by reason of the holder (i) owning or having owned, directly or
indirectly, actually or constructively, 10% or more of the total
combined voting power of all classes of stock of the Company, (ii)
being a bank receiving interest described in Section 881(c)(3)(A) of
the United States Internal Revenue Code of 1986, as amended, or (iii)
being a controlled foreign corporation with respect to the United
States that is related to the Company by stock ownership;
(c) any tax, assessment or other governmental charge which
would not have been so imposed but for the presentation by the holder
of such Note or Coupon for payment on a date more than 10 days after
the date on which such payment became due and payable or the date on
which payment thereof is duly provided for and notice is given to
holders, whichever occurs later;
(d) any estate, inheritance, gift, sales, transfer, personal
property, wealth, interest equalization or any similar tax, assessment
or governmental charge;
(e) any tax, assessment, or other governmental charge which is
payable otherwise than by withholding from payment of principal of or
interest on such Note or Coupon;
(f) any tax, assessment or other governmental charge which is
payable by a holder that is not the beneficial owner of such Note or
Coupon, or a portion of either, or that is a foreign partnership, but
only to the extent that a beneficial owner or member of the partnership
would not have been entitled to the payment of an Additional Amount had
the beneficial owner or member received directly its beneficial or
distributive share of the payment;
(g) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of principal of or
interest on any Note or Coupon, if such payment can be made without
such withholding by any other Paying Agent; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and
(g).
For purposes of the foregoing, the holding of or the receipt of any
payment with respect to a Note shall not constitute a connection between the
holder (or between a fiduciary, settlor, beneficiary, member or shareholder of,
or
Exhibit C, Page 9
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a person having a power over, such holder if such holder is an estate, a trust,
a partnership or a corporation) and the United States.
The term "United States Alien," as used herein, means any corporation,
partnership, individual or fiduciary that, as to the United States, is (i) a
foreign corporation, (ii) a nonresident alien individual, (iii) a nonresident
alien fiduciary of a foreign estate or trust, (iv) a foreign partnership one or
more of the members of which is, as to the United States, a foreign corporation,
a nonresident alien individual or a nonresident alien fiduciary of a foreign
estate or trust.
Section 9. Events of Default.
The happening of one or more of the following events shall
constitute an Event of Default:
(a) default in any payment of the principal of any Note as and
when the same shall become due and payable (whether at maturity, upon
redemption, or otherwise); or
(b) default in any payment of any installment of interest or
any required payment of any Additional Amount pursuant to Section 8
hereof on any of the Notes as and when the same shall become due and
payable and continuance of such default for a period of 30 days; or
(c) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on its part in the
Notes or in the Fiscal Agency Agreement in respect of the Notes for a
period of 90 days after the date on which written notice of such
failure requiring the Company to remedy the same shall have been given
to the Company by the holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding; or
(d) the Company shall make an assignment for the benefit of
creditors, or shall file a petition in bankruptcy; or the Company shall
be adjudicated insolvent or bankrupt, or shall petition or shall apply
to any court having jurisdiction in the premises for the appointment of
a receiver, trustee, liquidator or sequestrator of, or for, the Company
or any substantial portion of the property of the Company; or the
Company shall commence any proceeding relating to the Company or any
substantial portion of the property of the Company under any
insolvency, reorganization, arrangement, or readjustment of debt,
dissolution, winding-up, adjustment, composition or liquidation law or
statute of any jurisdiction, whether in effect at the date of the
Fiscal Agency Agreement or thereafter created (hereinafter in this
subsection (d) called "Proceeding"); or if there shall be commenced
against the Company any Proceeding and an order approving the petition
shall be entered, or such Proceeding shall remain undischarged for a
period of 60 days; or receiver, trustee, liquidator or sequestrator of,
or for, the Company or any substantial portion of the property of the
Company shall be appointed and shall not be discharged within a period
of 60 days; or the Company by any act shall indicate consent to or
approval of or acquiescence in any Proceeding or the appointment of a
receiver, trustee, liquidator or sequestrator of, or for, the Company
or any substantial portion of the property of the Company; provided
that a resolution or order for winding-up the Company with a view to
its merger or consolidation with another company or the sale or
conveyance of all or substantially all of its assets to such other
company as provided in Section 6 shall not make the rights and remedies
herein enforceable under this clause (d) if such last-mentioned company
shall, as a part of such merger, consolidation, sale or conveyance, and
within 60 days from the passing of the resolution or the date of the
order, comply with the conditions to that end stated in Section 4.
If an Event of Default described in clauses (a), (b) or (d) shall occur
and be continuing, any holder of a Note may declare the principal of such Note
and the interest accrued thereon to be due and payable immediately by written
notice to the Company and the Fiscal Agent at its principal corporate trust
office in New York City, and unless such default shall have been cured by the
Company prior to receipt of such written notice, the principal of such Note and
the interest thereon shall become and be immediately due and payable. In an
Event of Default described in clauses
Exhibit C, Page 10
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(a), (b), (c) or (d) shall occur and be continuing, the holders of not less than
25% in principal amount of the Notes may declare the principal of the Notes and
the interest accrued thereon to be due and payable immediately by written notice
to the Company and the Fiscal Agent at its principal corporate trust office in
London, and unless all such defaults shall have been cured by the Company prior
to receipt of such written notice, the principal of the Notes and the interest
accrued thereon shall become and be immediately due and payable. Any Event of
Default may be waived by the holders of a majority in aggregate principal amount
of the Notes except a default in payment declared by a particular holder
pursuant to clause (a) or (b).
Section 10. Replacement of Notes and Coupons.
If any Note (including the Coupons appertaining to any Notes) is
mutilated, defaced, apparently destroyed, lost or stolen, the Company in its
discretion may execute and, upon the written request of the Company, the Fiscal
Agent will replace such Note (in such capacity, the "Replacement Agent") by
issuing a new Note upon the surrender of such mutilated or defaced Note or
delivery of satisfactory evidence of the destruction, loss or theft thereof to
the Replacement Agent. In the case of any such Note, indemnity and other
documents satisfactory to the Fiscal Agent and the Company may be required of
the holders of such Note before a replacement Note will be issued. All expenses
associated with obtaining such indemnity and in issuing the new Note shall be
borne by the holder of the mutilated, defaced, apparently destroyed, lost or
stolen Note. No such replacement Note or Coupon shall be delivered in the United
States.
Section 11. Notices.
All notices to the holders of interests in the Notes will be given by
publication at least once in a newspaper in the English language of general
circulation in London (which is expected to be the Financial Times) and, so long
as the Notes are listed on the Luxembourg Stock Exchange and the Luxembourg
Stock Exchange so requires, in a newspaper of general circulation in Luxembourg
(which is expected to be the Luxemburger Wort) or, if publication in London or
Luxembourg is not practicable, publication may be made in another principal city
in Europe in a newspaper of general circulation. Such notices will be deemed to
have been given on the date of such publication, or if published on different
dates, on the first date on which publication is made in any publication in
which it is required. Couponholders will be deemed for all purposes to have
notice of the contents of any notices given to the Noteholders in accordance
with this paragraph.
Until such time as any definitive Notes are issued, there may, so long
as the Temporary Global Note is held in its entirety on behalf of Euroclear and
Cedel Bank, be substituted for such publication in London, the delivery of the
relevant notice to Euroclear and Cedel Bank for communication by them to the
persons shown in their records as having interest in the Temporary Global Note
credited to them and any such notices will be deemed to have been given on the
seventh day after delivery to Euroclear and Cedel Bank; provided, that the
foregoing shall not relieve the Company of its obligation to publish any notices
in a newspaper of general circulation in Luxembourg so long as the Notes are
listed on the Luxembourg Stock Exchange and the Luxembourg Stock Exchange so
requires such publication.
Section 12. Meetings of the Noteholders, Modification and Waiver.
(a) Modifications and amendments to the Fiscal Agency Agreement with
respect to the Notes or to these Conditions, insofar as such modifications or
amendments affect the rights, powers, duties or obligations of the holders of
Notes, may be made, and future compliance with or past default by the Company
under any of the provisions hereof or thereof may be waived, by the holders of
the Notes, with the consent of the holders of at least a majority in aggregate
principal amount of the Notes at the time outstanding, or of such lesser
percentage as may act at a meeting of holders of Notes held in accordance with
the provisions set forth herein, to be held at such time and at such place as
the Company shall determine; provided that no such modification, amendment or
waiver may, without the consent of the holder of each such Note affected
thereby, (i) waive a default in the payment of the principal of or interest on
any such Note, or change the stated maturity of the principal of or any
instalment of interest on any such Note; (ii)
Exhibit C, Page 11
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reduce the principal amount of or the rate of interest on any such Note or
change the obligation of the Company to pay any Additional Amounts pursuant to
Section 8 hereof; (iii) change the currency of payment of principal of or
interest on any such Note; (iv) impair the right to institute suit for the
enforcement of any such payment on or with respect to any such Note; (v) reduce
the percentage of aggregate principal amount of Notes outstanding necessary to
modify or amend the Fiscal Agency Agreement or these Conditions or reduce the
percentage of votes required for the adoption of any action at a meeting of the
holders of Note; or (vi) modify the obligation of the Company to maintain an
office or agency outside the United States for the purposes specified in the
Fiscal Agency Agreement. Any modifications, amendments or waivers to the Fiscal
Agency Agreement or to these Conditions will be conclusive and binding on all
holders of the Notes, whether or not they have given such consent or were
present at such meeting, and on all holders of coupons, whether or not notation
of such modifications, amendments or waivers is made upon the Notes or Coupons,
and on all future holders of Notes and Coupons. Any instrument given by or on
behalf of any holder of a Note in connection with any consent to any such
modification, amendment or waiver will be irrevocable once given and will be
conclusive and binding on all subsequent holders of such Note.
(b) Notice of any meeting of holders of Notes, setting forth the time
and place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be given in accordance with Section 11 of these
Conditions at least twice, the first publication to be not less than 20 nor more
than 180 days prior to the date fixed for the meeting. To be entitled to vote at
any meeting of holders of Notes, a person shall be (i) a holder of one or more
Notes, including a beneficial owner of an interest in the Temporary Global Note
with respect to the Notes, or (ii) a person appointed by an instrument in
writing as proxy by the holder of one or more Notes. The only persons who shall
be entitled to be present or to speak at any meeting of holders of Notes shall
be the persons entitled to vote at such meeting and their counsel and any
representatives of the Company and its counsel.
(c) The persons entitled to vote a majority in principal amount of
Notes at the time outstanding shall constitute a quorum at a meeting convened
for the purpose referred to above except as hereinafter provided. No business
shall be transacted in the absence of a quorum, unless a quorum is present when
the meeting is called to order. In the absence of a quorum, the meeting shall be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting shall be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting. Notice of the reconvening of
any adjourned meeting shall be given as provided above except that such notice
need be given only once but must be given not less than five days prior to the
date on which the meeting is scheduled to be reconvened. Subject to the
foregoing, at the reconvening of any meeting further adjourned for lack of a
quorum, the persons entitled to vote 25% in principal amount of the Notes at the
time outstanding shall constitute a quorum for the taking of any action set
forth in the notice of the original meeting. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the aggregate
principal amount of the outstanding Notes which shall constitute a quorum.
(d) At a meeting or an adjourned meeting duly convened and at which a
quorum is present as aforesaid, any resolution to amend, or to waive compliance
with, any of the covenants or conditions referred to above shall be effectively
passed and decided if passed and/or decided by the persons entitled to vote the
lesser of (i) a majority in principal amount of the Notes then outstanding and
(ii) 75% in principal amount of the Notes represented and voting at the meeting.
Any holder of Notes who has executed an instrument in writing appointing a
person as proxy shall be deemed to be present for the purposes of determining a
quorum and be deemed to have voted if such person duly appointed as proxy is
present and has voted; provided that such holder of Notes shall be considered as
present for the purposes of determining a quorum or voting only with respect to
the matters covered by such instrument in writing. Any resolution passed or
decision taken at any meeting of holders of Notes duly held in accordance with
this Section shall be binding on all the holders of Notes whether or not present
or represented at the meeting.
(e) The holding of Notes shall be proved by the production of such
Notes or by a certificate, satisfactory to the Company, executed by any bank,
banker, trust company or recognized securities dealer, wherever situated,
satisfactory to the Company. Each such certificate shall be dated and shall
state that on the date thereof a Note bearing a specified serial number was
deposited with or exhibited to such bank, banker, trust company or recognized
Exhibit C, Page 12
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securities dealer by the person named in such certificate. Any such certificate
may be issued in respect of one or more Notes specified therein. The holding by
the person named in any such certificate of any Note specified therein shall be
presumed to continue for a period of one year from the date of such certificate
unless at the time of any determination of such holding (i) another certificate
bearing a later date issued in respect of the same Note shall be produced, (ii)
the Note specified in such certificate shall be produced by some other person or
(iii) the Note specified in such certificate shall have ceased to be
outstanding. The appointment of any proxy shall be proved by having the
signature of the person executing the proxy guaranteed by any bank, banker,
trust company or London or New York Stock Exchange member firm satisfactory to
the Company.
(f) The Company shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the holders of a majority in principal amount of the Notes represented
at the meeting. At any meeting, each holder of Notes or proxy shall be entitled
to one vote for each U.S. $1,000 principal amount of Notes held or represented
by him; provided that no vote shall be cast or counted at any meeting in respect
of any Note challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall have no right
to vote except as a holder of Notes or proxy. Any meeting of holders of Notes
duly called at which a quorum is present may be adjourned from time to time, and
the meeting may be held as so adjourned without further notice.
(g) The vote upon any resolution submitted to any meeting of holder of
Notes shall be by written ballot on which shall be subscribed the signatures of
the holders of Notes or proxies and on which shall be inscribed the serial
number or numbers of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make a
file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of holders of Notes shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the fact setting forth a
copy of the notice of the meeting and showing that said notice was published as
provided above. The record shall be signed and verified by the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other duplicate to the Fiscal Agent to be
preserved by the Fiscal Agent, the latter to have attached thereto the ballots
voted at the meeting. Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
(h) Notwithstanding anything to the contrary contained in Section 12(a)
above, the Notes (including the Conditions) and the Fiscal Agency Agreement may
be amended by the Company and the Fiscal Agent without the consent of any
Noteholders or Couponholders, for the purpose of (i) adding to the covenants of
the Company for the benefit of the holders of Notes or Coupons, (ii)
surrendering any right or power conferred upon the Company, (iii) permitting
payment of principal and interest on Notes or Coupons in the United States to
the extent then permitted under applicable regulations of the United States
Treasury Department and provided no adverse tax consequences would result to the
Noteholders or Couponholders, as the case may be, (iv) evidencing the succession
of a corporation or other person to the Company and the assumption by such
successor of the covenants and obligations of the Company in the Notes
(including the Conditions) and the Fiscal Agency Agreement or (v) correcting or
supplementing any provision contained herein or therein.
Section 13. No Waiver; Remedies Cumulative.
No failure to exercise, and no delay in exercising, on the part of the
holder of any Note, any right with respect thereto shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right. Rights pursuant to
the terms of the Notes shall be in addition to all other rights provided by law.
No notice or demand given in any case shall constitute a waiver of rights to
take other action in the same, similar or other instances without such notice or
demand.
Exhibit C, Page 13
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Section 14. Governing Law.
(a) This Note shall be governed by and construed in accordance with the
laws of the State of New York, United States of America.
(b) The Company hereby irrevocably submits to the non-exclusive
jurisdiction of the New York State or United States Federal court sitting in the
City and County of New York over any suit, action or proceeding arising out of
or relating to the Fiscal Agency Agreement or any Note. The Company irrevocably
waives, to the fullest extent permitted by law, any objection which it may have
to the laying of the venue of any such suit, action or proceeding brought in
such a court and any claim that any such suit, action or proceeding brought in
such a court has been brought in an inconvenient forum. The Company agrees that
final judgment in any such suit, action or proceeding brought in such a court
shall be conclusive and binding upon the Company and may be enforced in any
court the jurisdiction of which the Company is subject to by a suit upon such
judgment; provided that service of process is effected upon the Company in the
manner specified in the following paragraph or as otherwise permitted by law.
(c) As long as any of the Notes remain outstanding, the Company will at
all times have an authorized agent in The City of New York, upon whom process
may be served in any legal action or proceeding arising out of or relating to
the Fiscal Agency Agreement or any Note. Service of process upon such agent and
written notice of such service mailed or delivered to the Company shall to the
extent permitted by law be deemed in every respect effective service of process
upon the Company in any such legal action or proceeding. The Company has
appointed CT Corporation System as its agent for such purpose, and covenants and
agrees that service of process in any legal action or proceeding may be made
upon it at the office of such agent at 1633 Broadway, New York, New York 10019
(or at such other address or, at the office of such other authorized agent, as
the Company may designate by written notice to the Fiscal Agent), with a copy to
the Company at the address for notices set forth on the signature page of the
Fiscal Agency Agreement; provided that failure to deliver any such copy to the
Company shall not affect the validity or effectiveness of any such service of
process.
Section 15. Warranties of the Company.
Subject to authentication of the Note to which these Conditions are
attached by the Fiscal Agent, the Company hereby represents and warrants that
all acts, conditions and things required to be done and performed and to have
happened prior to the creation and issuance of such Note and the Coupons (if
any) appertaining thereto and to constitute the same legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms, have been done and performed and have happened in accordance with all
applicable laws.
Exhibit C, Page 14