EXHIBIT 4.8
===============================================================================
INDENTURE
between
TIME WARNER INC.
and
CHEMICAL BANK
Trustee
Dated as of [ ], 1995
Providing for Issuance of
Subordinated Securities in Series
===============================================================================
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Other Provisions of General Application
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SECTION 1.01. Definitions......................................... 1
SECTION 1.02. Compliance Certificates and
Opinions.......................................... 14
SECTION 1.03. Form of Documents Delivered to
Trustee............................................ 15
SECTION 1.04. Acts of Securityholders.............................. 16
SECTION 1.05. Notices, etc., to Trustee and
Company............................................ 18
SECTION 1.06. Notices to Securityholders;
Waiver............................................. 18
SECTION 1.07. Conflict with Trust Indenture Act.................... 19
SECTION 1.08. Effect of Headings and Table of
Contents........................................... 19
SECTION 1.09. Successors and Assigns............................... 19
SECTION 1.10. Separability Clause.................................. 19
SECTION 1.11. Benefits of Indenture................................ 20
SECTION 1.12. Governing Law........................................ 20
SECITON 1.13. Counterparts......................................... 20
SECTION 1.14. Judgment Currency.................................... 20
ARTICLE II
Security Forms
--------------
SECTION 2.01. Forms Generally...................................... 20
SECTION 2.02. Forms of Securities.................................. 21
SECTION 2.03. Form of Trustee's Certificate of
Authentication..................................... 21
SECTION 2.04. Securities Issuable in the Form of a
Global Security.................................... 22
ARTICLE III
The Securities
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SECTION 3.01. General Title; General Limitations;
Issuable in Series; Terms of
Paricular Series.................................. 25
Contents, p. 2
Page
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SECTION 3.02. Denominations........................................ 28
SECTION 3.03. Execution, Authentication and
Delivery and Dating................................ 29
SECTION 3.04. Temporary Securities................................. 31
SECTION 3.05. Registration, Transfer and Exchange.................. 31
SECTION 3.06. Mutilated, Destroyed, Lost and
Stolen Securities.................................. 33
SECTION 3.07. Payment of Interest; Interest Rights
Preserved.......................................... 34
SECTION 3.08. Persons Deemed Owners................................ 36
SECTION 3.09. Cancellation......................................... 36
SECITON 3.10. Computation of Interest.............................. 36
SECTION 3.11. Delayed Issuance of Securities....................... 37
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 4.01. Satisfaction and Discharge of
Indenture.......................................... 37
SECTION 4.02. Application of Trust Money........................... 39
SECTION 4.03. Defeasance upon Deposit of Funds or
Government Obligations............................. 40
SECTION 4.04. Reinstatement........................................ 42
SECTION 4.05. Subordination Provisions
Inapplicable....................................... 42
ARTICLE V
Remedies
--------
SECTION 5.01. Events of Default.................................... 43
SECTION 5.02. Acceleration of Maturity; Rescission
and Annulment...................................... 45
SECTION 5.03. Collection of Indebtedness and Suits 47
for Enforcement by Trustee.........................
SECTION 5.04. Trustee May File Proofs of Claim..................... 48
SECTION 5.05. Trustee May Enforce Claims Without
Possession of Securities........................... 49
SECTION 5.06. Application of Money Collected....................... 49
SECTION 5.07. Limitation on Suits.................................. 50
SECTION 5.08. Unconditional Right of Securityholders To Receive
Principal, Premium and Interest.................... 51
SECTION 5.09. Restoration of Rights and Remedies................... 51
SECTION 5.10. Rights and Remedies Cumulative....................... 51
Contents, p. 3
Page
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SECTION 5.11. Delay or Omission Not Waiver......................... 51
SECTION 5.12. Control by Securityholders........................... 52
SECTION 5.13. Waiver of Past Defaults.............................. 52
SECTION 5.14. Undertaking for Costs................................ 53
SECTION 5.15. Waiver of Stay or Extension Laws..................... 53
ARTICLE VI
The Trustee
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SECTION 6.01. Certain Duties and Responsibilities.................. 54
SECTION 6.02. Notice of Defaults................................... 55
SECTION 6.03. Certain Rights of Trustee............................ 56
SECTION 6.04. Not Responsible for Recitals or
Issuance of Securities............................. 57
SECTION 6.05. May Hold Securities.................................. 57
SECTION 6.06. Money Held in Trust.................................. 58
SECTION 6.07. Compensation and Reimbursement....................... 58
SECTION 6.08. Disqualification; Conflicting
Interests.......................................... 59
SECTION 6.09. Corporate Trustee Required;
Eligibility........................................ 59
SECTION 6.10. Resignation and Removal; Appointment
of Successor....................................... 60
SECTION 6.11. Acceptance of Appointment by
Successor.......................................... 62
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business............................. 63
SECTION 6.13. Preferential Collection of Claims
Against Company.................................... 64
SECTION 6.14. Appointment of Authenticating Agent.................. 69
ARTICLE VII
Securityholders' Lists and Reports by Trustee and Company
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SECTION 7.01. Company To Furnish Trustee Names and
Addresses of Securityholders....................... 72
SECTION 7.02. Preservation of Information;
Communications to Securityholders.................. 72
SECTION 7.03. Reports by Trustee................................... 74
SECTION 7.04. Reports by Company................................... 76
Contents, p. 4
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ARTICLE VIII
Consolidation, Merger, Conveyance or Transfer
---------------------------------------------
SECTION 8.01. Company May Consolidate, etc., only
on Certain Terms................................... 76
SECTION 8.02. Successor Person Substituted......................... 77
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Supplemental Indentures without
Consent of Securityholders......................... 77
SECTION 9.02. Supplemental Indentures with Consent
of Securityholders................................. 79
SECTION 9.03. Execution of Supplemental
Indentures......................................... 80
SECTION 9.04. Effect of Supplemental Indentures.................... 81
SECTION 9.05. Conformity with Trust Indenture Act.................. 81
SECTION 9.06. Reference in Securities to
Supplemental Indentures............................ 81
SECTION 9.07. Subordination Unimpaired............................. 81
ARTICLE X
Covenants
---------
SECTION 10.01. Payment of Principal, Premium and
Interest........................................... 82
SECTION 10.02. Maintenance of Office or Agency...................... 82
SECTION 10.03. Money for Security Payments To Be
Held in Trust...................................... 82
SECTION 10.04. Statement as to Compliance........................... 84
SECTION 10.05. Legal Existence...................................... 84
SECTION 10.06. Waiver of Certain Covenants.......................... 85
ARTICLE XI
Redemption of Securities
------------------------
SECTION 11.01. Applicability of Article............................. 85
SECTION 11.02. Election To Redeem; Notice to
Trustee............................................ 86
Contents, p. 5
Page
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SECTION 11.03. Selection by Trustee of Securities
To Be Redeemed..................................... 86
SECTION 11.04. Notice of Redemption................................. 87
SECTION 11.05. Deposit of Redemption Price.......................... 88
SECTION 11.06. Securities Payable on Redemption
Date............................................... 89
SECTION 11.07. Securities Redeemed in Part.......................... 89
SECTION 11.08. Provisions with Respect to Any
Sinking Funds...................................... 90
SECTION 11.09. Rescission of Redemption............................. 91
ARTICLE XII
Conversion
----------
SECTION 12.01. Conversion Privilege................................. 93
SECTION 12.02. Conversion Procedure; Rescission of
Conversion; Conversion Price;
Fractional Shares.................................. 93
SECTION 12.03. Adjustment of Conversion Price for 96
Common Stock or Other Marketable
Securities.........................................
SECTION 12.04. Consolidation or Merger of the 101
Company............................................
SECTION 12.05. Notice of Adjustment................................. 102
SECTION 12.06. Notice in Certain Events............................. 102
SECTION 12.07. Company To Reserve Stock or Other
Marketable Securities;
Registration; Listing.............................. 103
SECTION 12.08. Taxes on Conversion.................................. 104
SECTION 12.09. Conversion After Record Date......................... 105
SECTION 12.10. Corporate Action Regarding Par Value
of Common Stock.................................... 105
SECTION 12.11. Company Determination Final.......................... 105
SECTION 12.12. Trustee's Disclaimer................................. 105
ARTICLE XIII
Subordination
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SECTION 13.01. Agreement To Subordinate............................. 106
SECTION 13.02. Liquidation, Dissolution, Bankruptcy................. 106
SECTION 13.03. Default on Senior Indebtedness....................... 108
SECTION 13.04. Dispute with Holders of Certain
Senior Indebtedness................................ 109
SECTION 13.05. Acceleration of Notes................................ 110
Contents, p. 6
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SECTION 13.06. When Distribution Must be Paid Over.................. 110
SECTION 13.07. Relative Rights...................................... 110
SECTION 13.08. Subordination May Not Be Impaired
by Company......................................... 111
SECTION 13.09. Distribution or Notice to
Representative..................................... 111
SECTION 13.10. Rights of Trustee and Paying Agent................... 111
SECTION 13.11. Notice to Trustee.................................... 111
SECTION 13.12. Trustee Not a Fiduciary.............................. 112
SECTION 13.13. Effectuation of Subordination by
Trustee............................................ 112
SECTION 13.14. Article Applicable to Paying Agents.................. 112
SECTION 13.15. Trustee; Compensation Not Prejudiced................. 112
[Draft--7/29/95]
INDENTURE between TIME WARNER INC., a Delaware corporation
(hereinafter called the "Company") having its principal office at
75 Rockefeller Plaza, New York, New York 10019, and CHEMICAL
BANK, a New York banking corporation, trustee (hereinafter
called the "Trustee"), made and entered into as of the [ ]th day
of [ ] 1995.
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its subordinated debentures, notes,
bonds or other evidences of indebtedness, to be issued in one or more fully
registered series.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
To set forth or to provide for the establishment, of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE I
Definitions and Other Provisions
--------------------------------
of General Application
----------------------
SECTION 1.01. Definitions. For all purposes of this Indenture and of
------------
any indenture supplemental hereto, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act, either
directly or by
2
reference therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles and
any accounting rules or interpretations promulgated by the commission as
are generally in effect in the United States of America as of the date of
this Indenture; and
(d) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this instrument as originally executed. The
words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
Certain terms, used principally in Article VI, are defined in that
Article.
"Act", when used with respect to any Securityholder, has the meaning
specified in Section 1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
authenticate Securities under Section 614.
"Board of Directors" means (a) the board of directors of the Company,
(b) any duly authorized committee of such board, (c) any committee of officers
of the Company or (d) any officer of the Company acting, in the case of (c)
3
or (d), pursuant to authority granted by the board of directors of the Company
or any committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, with respect to any series of Securities, unless
otherwise specified in a Board Resolution or an Officer's Certificate with
respect to a particular series of Securities, any day other than a Saturday or
Sunday or any other day on which banking institutions in the pertinent Place or
Places of Payment or the city in which the Corporate Trust Office is located are
authorized or required by law or executive order to be closed.
"Closing Price" of the Common Stock or other Marketable Security, as
the case may be, shall mean the last reported sale price of such stock or other
Marketable Security (regular way) as shown on the Composite Tape of the NYSE
(or, if such stock or other Marketable Security is not listed or admitted to
trading on the NYSE, on the principal national securities exchange on which such
stock or other Marketable Security is listed or admitted to trading), or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices on the NYSE (or, if such stock or other Marketable Security is not
listed or admitted to trading on the NYSE, on the principal national securities
exchange on which such stock or other Marketable Security is listed or admitted
to trading), or, if it is not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as reported
by the National Association of Securities Dealers Automated Quotation System
(NASDAQ), or if such stock or other Marketable Security is not so reported, the
average of the closing bid and asked prices as furnished by any member of the
National Association of Securities Dealers, Inc., selected from time to time by
the Company for that purpose.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it
4
under the Trust Indenture Act, then the body performing such duties at such
time.
"Common Stock" shall mean the class of Common Stock, par value $1.00
per share, of the Company authorized at the date of this Indenture as originally
signed, or any other class of stock resulting from successive changes or
reclassifications of such Common Stock, and in any such case including any
shares thereof authorized after the date of this Indenture, and any other shares
of stock of the Company which do not have any priority in the payment of
dividends or upon liquidation over any other class of stock.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
"Company Request", "Company Order" and "Company Consent" mean a
written request, order or consent, respectively, signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company to
receive Securities to be converted into Common Stock or other Marketable
Securities on behalf of the Company. The Company initially authorizes the
Trustee to act as Conversion Agent for the Securities on its behalf. The
Company may at any time and from time to time authorize one or more Persons to
act as Conversion Agent in addition to or in place of the Trustee with respect
to any series of Securities issued under this Indenture.
"Conversion Price" means, with respect to any series of Securities
which are convertible into Common Stock or other Marketable Securities, the
price per share of Common Stock or the price per designated unit of other
Marketable Security at which the Securities of such series are so convertible as
set forth in the Board Resolution with respect to such series (or in any
supplemental indenture entered into pursuant to Section 9.01(ix) with respect to
such series), as the same may be adjusted from time to time in accordance with
Section 12.03 (or such supplemental indenture).
5
"Converting Holder" shall have the meaning specified in Section
12.02(c) of this Indenture.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 450 West 33rd
Street, 15th Floor, New York, New York 10001.
"Current Market Price" on any date shall mean the average of the daily
Closing Prices per share of Common Stock or of such other Marketable Securities
for any 30 consecutive Trading Days selected by the Company prior to the day in
question, which 30 consecutive Trading Day period shall not commence more than
45 Trading Days prior to the day in question; provided that, with respect to
Section 12.03(c), the "Current Market Price" of the Common Stock or of such
other Marketable Securities shall mean the average of the daily Closing Prices
per share of Common Stock or of such other Marketable Securities for the five
consecutive Trading Days ending on the date of the distribution referred to in
Section 12.03(c) (or if such date shall not be a Trading Day, on the Trading Day
immediately preceding such date).
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depository" means, unless otherwise specified by the Company pursuant
to either Section 2.04 or 3.01, with respect to Securities of any series
issuable or issued as a Global Security, The Depository Trust Company, New York,
New York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
"Event of Default" has the meaning specified in Article Five.
"GAAP" means generally accepted accounting principles as such
principles are in effect as of the date of this Indenture.
"Global Security", when used with respect to any series of Securities
issued hereunder, means a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depository or pursuant to the
Depository's instruction, all in accordance with this
6
Indenture and an indenture supplemental hereto, if any, or Board Resolution and
pursuant to a Company Request, which shall be registered in the name of the
Depository or its nominee and which shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, all of the Outstanding
Securities of such series or any portion thereof, in either case having the same
terms, including, without limitation, the same original issue date, date or
dates on which principal is due, and interest rate or method of determining
interest.
"Holder", when used with respect to any Security, means a
Securityholder.
"Indenture" or "this Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 3.01.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Marketable Security" means any common stock, debt security or other
security of a Person which is (or will, upon distribution thereof, be) listed on
the NYSE, the American Stock Exchange or any national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended,
or approved for quotation in the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System or any
similar system of automated dissemination of quotations of securities prices in
the United States or for which there is a recognized market maker or trading
market.
"Material U.S. Subsidiary" means any Person that is a Subsidiary if
(a) if such Person is organized under the laws of the United States of America
or any political subdivision thereof (including any state thereof or the
District of Columbia) and (b) at the end of the most recent fiscal quarter of
the Company, the aggregate amount,
7
determined in accordance with GAAP consistently applied, of securities of, loans
and advances to, and other investments in, such Person held by the Company and
its other Subsidiaries exceeded 10% of the Company's Consolidated Net Worth.
For purposes of the foregoing, "Consolidated Net Worth" means the consolidated
stockholders' or owners' equity of the holders of capital stock or partnership
interests of such Person and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP consistently applied; provided that to the extent
--------
the Company's 8-3/4% Convertible Subordinated Debentures due 2015 or 11%
Convertible Subordinated Debentures due 2015 have been issued in exchange for
the Company's outstanding Series C 8-3/4% Convertible Exchangeable Preferred
Stock or Series D 11% Convertible Exchangeable Preferred Stock, respectively,
such Debentures that are then outstanding shall be considered equity for the
purposes of the computation of the Company's Consolidated Net Worth.
"Maturity", when used with respect to any Securities, means the date
on which the principal of any such Security becomes due and payable as therein
or herein provided, whether on a Repayment Date, at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee. Wherever this
Indenture requires that an Officers' Certificate be signed also by an engineer
or an accountant or other expert, such engineer, accountant or other expert
(except as otherwise expressly provided in this Indenture) may be in the employ
of the Company, and shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
of counsel to the Company, which is delivered to the Trustee. Such counsel
shall be acceptable to the Trustee, whose acceptance shall not be unreasonably
withheld.
8
"Original Issue Discount Security" means (a) any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof, and (b) any
other Security which is issued with "original issue discount" within the meaning
of Section 1273(a) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Outstanding", when used with respect to Securities or Securities of
any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except:
(a) such Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(b) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made; and
(c) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of Section
306 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a
Person in whose hands such Security is a legal, valid and binding
obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
the taking of such action upon a declaration of acceleration of the Maturity
thereof and (ii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding. In determining whether
9
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer assigned to the Corporate Trust Department of the Trustee
knows to be owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to act as owner with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"pari passu", as applied to the ranking of any indebtedness or other
---- -----
obligation of a Person in relation to other indebtedness or other obligation of
such Person, means that each such indebtedness or other obligation either (a) is
not subordinated in right of payment to any indebtedness or other obligation or
(b) is subordinate in right of payment to the same indebtedness or other
obligation as is the other, and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any indebtedness or other
obligation as to which the other is not so subordinate.
"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. The Company initially authorizes the Trustee to act as Paying
Agent for the Securities on its behalf. The Company may at any time and from
time to time authorize one or more Persons to act as Paying Agent in addition to
or in place of the Trustee with respect to any series of Securities issued under
this Indenture.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means with respect to any series of Securities
issued hereunder the city or political subdivision so designated with respect to
the series of Securities in question in accordance with the provisions of
Section 3.01.
10
"Predecessor Securities" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
"Redemption Rescission Event" shall mean the occurrence of (a) any
general suspension of trading in, or limitation on prices for, securities on the
principal national securities exchange on which shares of Common Stock or
Marketable Securities are registered and listed for trading (or, if shares of
Common Stock or Marketable Securities are not registered and listed for trading
on any such exchange, in the over-the-counter market) for more than 6-1/2
consecutive trading hours, (b) any decline in either the Dow Jones Industrial
Average or the Standard & Poor's Index of 400 Industrial Companies (or any
successor index published by Dow Jones & Company, Inc., or Standard & Poor's
Corporation) by either (i) an amount in excess of 10%, measured from the close
of business on any Trading Day to the close of business on the next succeeding
Trading Day during the period commencing on the Trading Day preceding the day
notice of any redemption of Securities is given (or, if such notice is given
after the close of business on a Trading Day, commencing on such Trading Day)
and ending at the time and date fixed for redemption in such notice or (ii) an
amount in excess of 15% (or if the time and date fixed for redemption is more
than 15 days following the date on which such notice of redemption is given,
20%), measured from the close of business on the Trading Day preceding the day
notice of such redemption is given (or, if such notice is given after the close
of business on a Trading Day, from such Trading Day) to the close of business on
any Trading Day at or prior to the time and date fixed for redemption, (c) a
declaration of a banking moratorium or any suspension of payments in respect of
banks by Federal or state
11
authorities in the United States or (d) the commencement of a war or armed
hostilities or other national or international calamity directly or indirectly
involving the United States which in the reasonable judgment of the Company
could have a material adverse effect on the market for the Common Stock or
Marketable Securities.
"Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date specified in such Security as the Regular
Record Date.
"Repayment Date", when used with respect to any Security to be
repaid, means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to such Security.
"Representative" means any Person whom the Company has, by written
notice to the Trustee, identified as the indenture trustee or other trustee,
agent or representative for an issue of Senior Indebtedness.
"Required Currency", when used with respect to any Security, has the
meaning set forth in Section 1.14.
"Responsible Officer", when used with respect to the Trustee, means
any other officer of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, of any series authenticated and delivered from time to time under this
Indenture.
"Securityholder" means a Person in whose name a Security is registered
in the Security Register.
"Security Register" shall have the meaning specified in Section 3.05.
12
"Security Registrar" means the Person who keeps the Security Register
specified in Section 3.05. The Company initially appoints the Trustee to act as
Security Registrar for the Securities on its behalf. The Company may at any
time and from time to time authorize any Person to act as Security Registrar in
place of the Trustee with respect to any series of Securities issued under this
Indenture.
"Senior Indebtedness" means all indebtedness or obligations of the
Company, whether outstanding at the date of execution of this Indenture or
thereafter incurred, assumed, guaranteed or otherwise created, unless the terms
of the instrument or instruments by which the Company incurred, assumed,
guaranteed or otherwise created any such indebtedness or obligation expressly
provide that such obligation or obligations is subordinated to all other
indebtedness of the Company or that such indebtedness is not superior or is
subordinated in right of payment to the Securities, with respect to any of the
following (including, without limitation, interest accruing on or after a
bankruptcy or other similar event, whether or not an allowed claim therein):
(a) any indebtedness incurred by the Company or assumed or guaranteed, directly
or indirectly, by the Company (i) for money borrowed, including the Company's
outstanding 8-3/4% Convertible Subordinated Debentures due 2015, (ii) in
connection with the acquisition of any business, property or other assets (other
than trade payables incurred in the ordinary course of business) or (iii) for
advances or progress payments in connection with the construction or acquisition
of any building, motion picture, television production or other entertainment of
any kind; (b) any obligation of the Company (or of a Subsidiary which is
guaranteed by the Company) as lessee under a lease of real or personal property;
(c) any obligation of the Company to purchase property at a future date in
connection with a financing by the Company or a Subsidiary; (d) letters of
credit; (e) currency swaps and interest rate hedges; and (f) a deferral,
renewal, extension or refunding of any of the foregoing.
"Senior Subordinated Indenture" means the Indenture dated as of
October 15, 1992, between the Company and Chemical Bank, as trustee.
"Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 3.07) means a date fixed by the Trustee pursuant to Section
3.07.
13
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified in
such Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation more
than 50% of the voting stock of which is owned directly or indirectly by such
Person, and any partnership, association, joint venture or other entity in which
such Person owns more than 50% of the equity interests or has the power to elect
a majority of the board of directors or other governing body.
"Trading Day" shall mean with respect to the Common Stock or a
Marketable Security, so long as the Common Stock or such Marketable Security, as
the case may be, is listed or admitted to trading on the NYSE, a day on which
the NYSE is open for the transaction of business, or, if the Common Stock or
such Marketable Security, as the case may be, is not listed or admitted to
trading on the NYSE, a day on which the principal national securities exchange
on which the Common Stock or such Marketable Security, as the case may be, is
listed is open for the transaction of business, or, if the Common Stock or such
Marketable Security, as the case may be, is not so listed or admitted for
trading on any national securities exchange, a day on which NASDAQ is open for
the transaction of business.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed; provided,
--------
however, that, in the event the Trust Indenture Act of 1939 is amended after
- -------
such date, "Trust Indenture Act" or "TIA" means, to the extent required by any
such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the Trustee in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee", shall
mean and include each Person who is then a Trustee hereunder. If at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
14
"Vice President" when used with respect to the Company or the Trustee
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president", including, without
limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation, means
stock of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect a majority of the members of the board of
directors (or other governing body) of such corporation other than stock having
such power only by reason of the happening of a contingency.
"WCI" means Warner Communications Inc., a Delaware corporation.
"Yield to Maturity" means t he yield to maturity on a series of
Securities, calculated by the Company at the time of issuance of such series of
Securities, or, if applicable, at the most recent redetermination of interest on
such series, in accordance with accepted financial practice.
SECTION 1.02. Compliance Certificates and Opinions. Upon any
-------------------------------------
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any (including
any covenants compliance with which constitutes a condition precedent), provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such Counsel all such
conditions precedent, if any (including any covenants compliance with which
constitutes a condition precedent), have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than annual
statements of compliance provided pursuant to Section 10.04) shall include
15
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been compiled with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any case
---------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
may certify or give an opinion as to the other matters, and any such Person may
certify or give an opinion and to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such Counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
16
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Securityholders. (a) Any request, demand,
------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of
any series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Company. If any Securities are denominated in coin or currency other than that
of the United States, then for the purposes of determining whether the Holders
of the requisite principal amount of Securities have taken any action as herein
described, the principal amount of such Securities shall be deemed to be that
amount of United States dollars that could be obtained for such principal amount
on the basis of the spot rate of exchange into United States dollars for the
currency in which such Securities are denominated (as evidenced to the Trustee
by an Officers' Certificate) as of the date the taking of such action by the
Holders of such requisite principal amount is evidenced to the Trustee as
provided in the immediately preceding sentence. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Securityholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by an officer of a corporation or a member of a partnership,
on behalf of such corporation or partnership, such certificate
17
or affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority of
the person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. Such record date shall be the later
of 10 days prior to the first solicitation of such action or the date of the
most recent list of Holders furnished to the Trustee pursuant to Section 7.01.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other action may be given before or after the record
date, but only the Holders of record at the close of business on the record date
shall be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of Securities Outstanding have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Securities Outstanding shall be
computed as of the record date; provided that no such authorization, agreement
or consent by the Holders on the record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date, and that no such authorization, agreement
or consent may be amended, withdrawn or revoked once given by a Holder, unless
the Company shall provide for such amendment, withdrawal or revocation in
conjunction with such solicitation of authorizations, agreements or consents or
unless and to the extent required by applicable law.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind the Holder of
every Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done or suffered to be done
by the Trustee or the
18
Company in reliance thereon whether or not notation of such action is made upon
such Security.
SECTION 1.05. Notices, etc., to Trustee and Company. Any request,
--------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of
Securityholders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Securityholder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, Attention
of Corporate Trust Department; or
(b) the Company by the Trustee or by any securityholder shall be
sufficient for every purpose hereunder (except as provided in Section
5.01(d) or, in the case of a request for repayment, as specified in the
Security carrying the right to repayment) if in writing and mailed, first-
class postage prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument,
Attention of Treasurer, or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 1.06. Notices to Securityholders; Waiver. Where this
-----------------------------------
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Securityholders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Securityholders shall be
filed with the Trustee, but such filing shall not be a condition precedent
19
to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to any Securityholder when such notice is required to be
given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
SECTION 1.07. Conflict with Trust Indenture Act. If and to the
----------------------------------
extent that any provision hereof limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, any of Sections 3.10 to 3.18, inclusive, of the
Trust Indenture Act, such imposed duties or incorporated provision shall
control.
SECTION 1.08. Effect of Headings and Table of Contents. The Article
-----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements in
-----------------------
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this
--------------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or
----------------------
in any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar, the holders of Senior Indebtedness and the
Holders of Securities (or such of them as may be affected thereby), any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture shall be construed in
--------------
accordance with and governed by the laws of the State of New York.
20
SECTION 1.13. Counterparts. This instrument may be executed in any
-------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 1.14. Judgment Currency. The Company agrees, to the fullest
------------------
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of, or premium or interest, if any, on the
Securities of any series (the "Required Currency") into a currency in which a
judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in the City of New York the Required Currency with the
Judgment Currency on the New York Banking Day preceding that on which a final
unappealable judgment is given and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency,
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, "New York Banking
Day" means any day except a Saturday, Sunday or a legal holiday in the City of
New York or a day on which banking institutions in the City of New York are
authorized or required by law or executive order to close.
ARTICLE II
Security Forms
--------------
SECTION 2.01. Forms Generally. The Securities shall have such
----------------
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters,
21
numbers or other marks of identification and such legends or endorsements placed
thereon, as may be required to comply with the rules of any securities exchange,
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Any portion of
the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities, subject,
with respect to the Securities of any series, to the rules of any securities
exchange on which such Securities are listed.
SECTION 2.02. Forms of Securities. Each Security shall be in one of
--------------------
the forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the
delivery of a Security to the Trustee for authentication in any form approved by
or pursuant to a Board Resolution, the Company shall deliver to the Trustee the
Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.
SECTION 2.03. Form of Trustee's Certificate of Authentication. The
-------------------------------- ---------------
form of Trustee's Certificate of
22
Authentication for any Security issued pursuant to this Indenture shall be
substantially as follows:
"TRUSTEE'S CERTIFICATE OF AUTHENTICATION
"This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.
CHEMICAL BANK,
as Trustee,
by
------------------------
Authorized Officer"
SECTION 2.04. Securities Issuable in the Form of a Global Security.
-----------------------------------------------------
(a) If the Company shall establish pursuant to Sections 2.02 and 3.01 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall in accordance with Section 3.03 and the Company Order
delivered to the Trustee or its agent thereunder, authenticate and deliver, such
Global Security or Securities, which (i) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, the
Outstanding Securities of such series to be represented by such Global Security
or Securities, or such portion thereof as the Company shall specify in a Company
Order, (ii) shall be registered in the name of the Depository for such Global
Security or Securities or its nominee, (iii) shall be delivered by the Trustee
or its agent to the Depository or pursuant to the Depository's instruction and
(iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of
the Depository to Issuer or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name
of the nominee of the Depository or in such other name as is requested by
an authorized representative of the Depository (and any payment is made to
the nominee of the Depository or to such other entity as is requested
23
by an authorized representative of the Depository), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, the nominee of the Depository, has
an interest herein."
(b) Notwithstanding any other provision of this Section 2.04 or of
Section 3.05, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global Security may be
transferred, in whole but not in part and in the manner provided in Section 305,
only to a nominee of the Depository for such Global Security, or to the
Depository, or a successor Depository for such Global Security selected or
approved by the Company, or to a nominee of such successor Depository.
(c) (i) If at any time the Depository for a Global Security notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time the Depository for the Securities for such
series shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor Depository with respect to such Global
Security. If a successor Depository for such Global Security is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company will execute, and the Trustee or its
agent, upon receipt of a Company Request for the authentication and delivery of
individual Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion determine
that the Securities of any series or portion thereof issued or issuable in the
form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event the Company will execute, and the
Trustee, upon receipt of a Company Request for the authentication and delivery
of individual Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Securities of such
series of like tenor
24
and terms in definitive form in an aggregate principal amount equal to the
principal amount of such Global Security or Securities representing such series
or portion thereof in exchange for such Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 2.02 and 3.01
with respect to Securities issued or issuable in the form of a Global Security,
the Depository for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depository. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and deliver, without service charge, (A)
to each Person specified by such Depository a new Security or Securities of the
same series of like tenor and terms and of any authorized denomination as
requested by such Person in aggregate principal amount equal to and in exchange
for such Person's beneficial interest as specified by such Depository in the
Global Security; and (B) to such Depository a new Global Security of like tenor
and terms and in an authorized denomination equal to the difference, if any,
between the principal amount of the surrendered Global Security and the
aggregate principal amount of Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of a
Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depository for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver at its
Corporate Trust Office such Securities to the Persons in whose names such
Securities are so registered.
25
ARTICLE III
The Securities
--------------
SECTION 3.01. General Title; General Limitations; Issuable in Series;
-------------------------------------------------------
Terms of Particular Series. The aggregate principal amount of Securities which
- ---------------------------
may be authenticated and delivered and outstanding under this Indenture is not
limited.
The Securities may be issued in one or more series as from time to
time may be authorized by the Board of Directors. There shall be established in
or pursuant to a Board Resolution or in a supplemental indenture, subject to
Section 3.11, prior to the issuance of Securities of any such series:
(a) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of any other
series);
(b) the Person to whom any interest on a Security of such series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(c) the date or dates on which the principal of the Securities of such
series is payable;
(d) the rate or rates at which the Securities of such series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any interest payable on any
Interest Payment Date;
(e) the place or places where the principal of and any premium and
interest on Securities of such series shall be payable;
(f) the period or periods within which, the Redemption Price or Prices
or the Repayment Price or Prices, as the case may be, at which and the
terms and conditions upon which Securities of such series may be redeemed
or repaid (including the applicability of Section 11.09), as the case may
be, in whole or in part, at the option of the Company or the Holder;
26
(g) the obligation, if any, of the Company to purchase Securities of
such series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities
of such series shall be purchased, in whole or in part, pursuant to such
obligation;
(h) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of such series shall be
issuable;
(i) provisions, if any, with regard to the conversion or exchange of
the Securities of such series, at the option of the Holders thereof or the
Company, as the case may be, for or into new Securities of a different
series, Common Stock or other securities and, if the Securities of such
series are convertible into Common Stock or other Marketable Securities,
the Conversion Price therefor;
(j) if other than U.S. dollars, the currency or currencies or units
based on or related to currencies in which the Securities of such series
shall be denominated and in which payments of principal of, and any premium
and interest on, such Securities shall or may be payable;
(k) if the principal of (and premium, if any) or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency (including a composite
currency) other than that in which the Securities are stated to be payable,
the period or periods within which, and the terms and conditions upon
which, such election may be made;
(l) if the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of such series may be determined
with reference to an index based on a coin or currency (including a
composite currency) other than that in which the Securities are stated to
be payable, the manner in which such amounts shall be determined;
(m) any limit upon the aggregate principal amount of the Securities of
such series which may be
27
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to
Section 3.04, 3.05, 3.06, 9.06, 11.07, 12.02 and except for any Securities
which, pursuant to Section 3.03, are deemed never to have been
authenticated and delivered hereunder);
(n) provisions, if any, with regard to the exchange of Securities of
such series, at the option of the Holders thereof, for other Securities of
the same series of the same aggregate principal amount of a different
authorized kind or different authorized denomination or denominations, or
both;
(o) provisions, if any, with regard to the appointment by the Trustee
of an Authenticating Agent in one or more places other than the location of
the office of the Trustee with power to act on behalf of the Trustee and
subject to its direction in the authentication and delivery of the
Securities of any one or more series in connection with such transactions
as shall be specified in the provisions of this Indenture or in or pursuant
to such Board Resolution or supplemental indenture;
(p) the portion of the principal amount of Securities of the series,
if other than the principal amount thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
5.02 or provable in bankruptcy pursuant to Section 5.04;
(q) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other
changes to the Events of Default set forth herein that shall be applicable
to the Securities of such series;
(r) any covenant solely for the benefit of the Securities of such
series and any additions, deletions or other changes to Article X or
Section 1.01 or any definitions otherwise applicable to the Securities of
that series;
(s) if Section 4.03 of this Indenture shall not be applicable to the
Securities of such series and if
28
Section 4.03 shall be applicable to any covenant or Event of Default
established in or pursuant to a Board Resolution or in a supplemental
indenture as described above that has not already been established herein;
(t) if the Securities of such series shall be issued in whole or in
part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Securities; and the
Depository for such Global Security or Securities; and
(u) any other terms of such series, all upon such terms as may be
determined in or pursuant to such Board Resolution or supplemental
indenture with respect to such series.
The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in the supplemental indenture creating such series. The
Securities of each series shall be distinguished from the Securities of each
other series in such manner, reasonably satisfactory to the Trustee, as the
Board of Directors may determine.
Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.
Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing for the method by which such terms or provisions shall be determined.
SECTION 3.02. Denominations. The Securities of each series shall be
--------------
issuable in such denominations and currency as shall be provided the provisions
of this Indenture or in or pursuant to the Board Resolution or the supplemental
indenture creating such series. In the absence of any such provisions with
respect to the Securities of any series, the Securities of that series shall be
issuable only in fully registered form in denominations of $1,000 and any
integral multiple thereof.
29
SECTION 3.03. Execution, Authentication and Delivery and Dating. The
--------------------------------------------------
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer under its
corporate seal reproduced thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication; and the Trustee shall, upon Company Order,
authenticate and deliver such Securities as in this Indenture provided and not
otherwise.
Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 1.02, and
the Board Resolution and any certificate relating to the issuance of the series
of Securities required to be furnished pursuant to Section 2.02, an Opinion of
Counsel stating that:
(a) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority hereunder
for the Trustee to authenticate and deliver such Securities;
(b) the form and terms of such Securities have been established in
conformity with the provisions of this Indenture;
(c) all laws and requirements with respect to the execution and
delivery by the Company of such Securities have been complied with, the
Company has the corporate power to issue such Securities and such
Securities have been duly authorized and delivered by the Company and,
assuming due authentication and
30
delivery by the Trustee, constitute legal, valid and binding obligations of
the Company enforceable in accordance with their terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws and legal principles affecting
creditors' rights generally from time to time in effect and to general
equitable principles, whether applied in an action at law or in equity) and
entitled to the benefits of this Indenture, equally and ratably with all
other Securities, if any, of such series Outstanding;
(d) the Indenture is qualified under the Trust Indenture Act; and
(e) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered and
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws and
legal principles affecting creditors' rights generally from time to time in
effect and to general equitable principles, whether applied in an action at law
or in equity).
The Trustee shall not be required to authenticate such Securities if
the issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of
31
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.09, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 3.04. Temporary Securities. Pending the preparation of
---------------------
definitive Securities of any series, the Company may execute, and, upon receipt
of the documents required by Section 3.03, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment, without charge to the
Holder; and upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
such series of authorized denominations and of like tenor and terms. Until so
exchanged the temporary Securities of such series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
SECTION 3.05. Registration, Transfer and Exchange. The Company shall
------------------------------------
keep or cause to be kept a register or registers (herein sometimes referred to
as the "Security Register") in which, subject to such reasonable
32
regulations as it may prescribe, the Company shall provide for the registration
of Securities, or of Securities of a particular series, and of transfers of
Securities or of Securities of such series. Any such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. At all reasonable times the information contained in
such register or registers shall be available for inspection by the Trustee at
the office or agency to be maintained by the Company as provided in Section
10.02. There shall be only one Security Register per series of Securities.
Subject to Section 2.04, upon surrender for registration of transfer
of any Security of any series at the office or agency of the Company maintained
for such purpose in a Place of Payment, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms.
Subject to Section 2.04, at the option of the Holder, Securities of
any series may be exchanged for other Securities of such series of any
authorized denominations, of a like aggregate principal amount and Stated
Maturity and like tenor and terms, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Securityholder making the exchange is entitled
to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed, by the Holder thereof
or his attorney duly authorized in writing.
33
Unless otherwise provided in the Security to be registered for
transfer or exchanged, no service charge shall be made on any Securityholder for
any registration of transfer or exchange of Securities, but the Company may
(unless otherwise provided in such Security) require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer
of or exchange any Security of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption under Section
11.03 and ending at the close of business on the date of such mailing or (b) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part.
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If
-------------------------------------------------
(a) any mutilated Security is surrendered to the Trustee, or the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Security and(b) there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and upon
its written request the Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Security, a new
Security of like tenor, series, Stated Maturity and principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and
34
payable, the Company in its discretion may, instead of issuing a new Security,
pay such Security.
Upon the issuance of any new Security under this Section, 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) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved. Unless
-----------------------------------------------
otherwise provided with respect to such security pursuant to Section 3.01,
interest on any 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 Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any 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 registered
Holder on the relevant Regular Record Date by virtue of his having been such
Holder; and, except as hereinafter provided, such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in clause (a) or
clause (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names any such Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be
35
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 such 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 nor 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 the Holder of each such Security at his address as it
appears in the 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 mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered on such Special Record Date
and shall no longer be payable pursuant to the following clause (b).
(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 such 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.
If any installment of interest the Stated Maturity of which is on or
prior to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.
36
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners. The Company, the Trustee and
----------------------
any agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any), and (subject to Section
3.07) interest on, such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 3.09. Cancellation. All Securities surrendered for payment,
-------------
redemption, conversion, registration of transfer, or exchange or credit against
a sinking fund shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and, if not already cancelled, shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Security shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. The Trustee
shall dispose of all cancelled Securities in accordance with its standard
procedures and deliver a certificate of such disposition to the Company.
SECTION 3.10. Computation of Interest. Unless otherwise provided as
------------------------
contemplated in Section 3.01, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.
37
SECTION 3.11. Delayed Issuance of Securities. Notwithstanding any
-------------------------------
contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary for the Company to
deliver to the Trustee an Officers' Certificate, Board Resolution, supplemental
indenture, Opinion of Counsel or Company Order otherwise required pursuant to
Sections 1.02, 2.02, 3.01 and 3.03 at or prior to the time of authentication of
each Security of such series if such documents are delivered to the Trustee or
its agent at or prior to the authentication upon original issuance of the first
Security of such series to be issued; provided that any subsequent request by
the Company to the Trustee to authenticate Securities of such series upon
original issuance shall constitute a representation and warranty by the Company
that as of the date of such request, the statements made in the Officers'
Certificate or other certificates delivered pursuant to Sections 1.02 and 2.02
shall be true and correct as if made on such date.
A Company Order, Officers', Certificate or Board Resolution or
supplemental indenture delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph may provide that Securities
which are the subject thereof will be authenticated and delivered by the Trustee
or its agent on original issue from time to time in the aggregate principal
amount, if any, established for such series pursuant to such procedures
acceptable to the Trustee as may be specified from time to time by Company Order
upon the telephonic, electronic or written order of Persons designated in such
Company Order, Officers' Certificate, supplemental indenture or Board Resolution
(any such telephonic or electronic instructions to be promptly confirmed in
writing by such Persons) and that such Persons are authorized to determine,
consistent with such Company Order, Officers' Certificate, supplemental
indenture or Board Resolution, such terms and conditions of said Securities as
are specified in such Company Order, Officers' Certificate, supplemental
indenture or Board Resolution.
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 4.01. Satisfaction and Discharge of Indenture. This
----------------------------- ----------
Indenture shall cease to be of further effect with respect to any series of
Securities (except as
38
to any surviving rights of conversion or transfer or exchange of Securities of
such series expressly provided for herein or in the form of Security for such
series), and the Trustee, on receipt of a Company Request and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture as to such series, when:
(a) either:
(i) all Securities of that series theretofore authenticated and
delivered (other than (A) Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 3.06 and (B) Securities of such series for whose
payment money in the Required Currency has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee canceled or for
cancellation; or
(ii) all such Securities of that series not theretofore delivered
to the Trustee canceled or for cancellation:
(A) have become due and payable,
(B) will become due and payable at their Stated Maturity within
one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (a), (B) or (C) above, has irrevocably
deposited or caused to be deposited (which deposit is not prohibited
by Article XIII) with the Trustee as trust funds in trust for the
purpose an amount in the Required Currency sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee canceled or for cancellation, for principal
(and premium, if any) and interest to the date of such deposit (in
39
the case of Securities which have become due and payable), or to the
Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Securities of such series; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
with respect to the Securities of such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect to
any series of Securities, the obligations of the Company to the Trustee with
respect to that series under Section 6.07 shall survive and the obligations of
the Company and the Trustee under Sections 3.05, 3.06, 4.02, 10.02 and 10.03
shall survive.
SECTION 4.02. Application of Trust Money. Subject to the provisions
---------------------------
of the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Section 4.01 or Section 4.03 shall be held in trust and applied by
it, in accordance with the provisions of the series of Securities in respect of
which it was deposited and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or securities deposited with and held by it as provided in Section 4.03 and this
Section 4.02 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent satisfaction and discharge,
Discharge or covenant defeasance; provided that the Trustee shall not be
required
40
to liquidate any securities in order to comply with the provisions of this
paragraph.
SECTION 4.03. Defeasance upon Deposit of Funds or Government
----------------------------------------------
Obligations. Unless pursuant to Section 3.01 provision is made that this
- ------------
Section shall not be applicable to the Securities of any series, at the
Company's option, either (a) the Company shall be deemed to have been Discharged
(as defined below) from its obligations with respect to any series of Securities
after the applicable conditions set forth below have been satisfied or (b) the
Company shall cease to be under any obligation to comply with any term,
provision or condition set forth in Sections 10.05 and 10.07 and Article Eight
(and any other Sections or covenants applicable to such Securities that are
determined pursuant to Section 3.01 to be subject to this provision), and clause
(d) of Section 5.01 of this Indenture (and any other Events of Default
applicable to such Securities that are determined pursuant to Section 3.01 to be
subject to this provision) shall be deemed not to be an Event of Default, with
respect to any series of Securities at any time after the applicable conditions
set forth below have been satisfied:
(i) the Company shall have deposited or caused to be deposited (which
deposit is not prohibited by Article Thirteen) irrevocably with the Trustee
as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of such
series (A) money in an amount, (B) the equivalent in securities of the
government which issued the currency in which the Securities are
denominated or government agencies backed by the full faith and credit of
such government which through the payment of interest and principal in
respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an amount or (C) a
combination of (A) and (B), sufficient, in the opinion (with respect to (B)
and (C)) of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge each installment of principal (including mandatory
sinking fund payments) and any premium of, interest on and any repurchase
or redemption obligations with respect to the outstanding Securities of
such series on the dates such installments of interest or principal or
repurchase or redemption obligations are due (before
41
such a deposit, if the Securities of such series are then redeemable or may
be redeemed in the future pursuant to the terms thereof, in either case at
the option of the Company, the Company may give to the Trustee, in
accordance with Section 11.02, a notice of its election to redeem all of
the Securities of such series at a future date in accordance with Article
Eleven);
(ii) no Event of Default or event (including such deposit) which with
notice or lapse of time would become an Event of Default with respect to
the Securities of such series shall have occurred and be continuing on the
date of such deposit;
(iii) the Company shall have delivered to the Trustee (A) an Opinion
of Counsel to the effect that Holders of the Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a
result of the Company's exercise of its option under this Section 4.03 and
will be subject to Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such option had
not been exercised, and, in the case of Securities being Discharged,
accompanied by a ruling to that effect from the Internal Revenue Service,
unless, as set forth in such Opinion of Counsel, there has been a change in
the applicable federal income tax law since the date of this Indenture such
that a ruling from the Internal Revenue Service is no longer required and
(B) an Opinion of Counsel, subject to such qualifications, exceptions,
assumptions and limitations as are reasonably deemed necessary by such
counsel and are reasonably satisfactory to counsel for the Trustee, to the
effect that the trust resulting from the deposit referred to in paragraph
(i) above does not violate the Investment Company Act of 1940; and
(iv) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit referred to in paragraph (i) above was
not made by the Company with the intent of preferring the Holders over
other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others.
42
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities of such series and to have satisfied all the obligations under this
Indenture relating to the Securities of such series (and the Trustee, upon
receipt of a Company Request and at the expense of the Company, shall execute
proper instruments acknowledging the same), except (a) the rights of Holders of
Securities to receive, from the trust fund described in paragraph (i) above,
payment of the principal and any premium of and any interest on such Securities
when such payments are due; (B) the Company's obligations with respect to such
Securities under Sections 3.05, 3.06, 4.02, 6.07, 10.02 and 10.03; (c) the
Company's right of redemption, if any, with respect to any Securities of such
series pursuant to Article XI, in which case the Company may redeem the
Securities of such series in accordance with Article XI by complying with such
Article and depositing with the Trustee, in accordance with Section 11.05, an
amount of money sufficient, together with all amounts held in trust pursuant to
Section 4.02 with respect to Securities of such series, to pay the Redemption
Price of all the Securities of such series to be so redeemed; and (d) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.
SECTION 4.04. Reinstatement. If the Trustee or paying Agent is
--------------
unable to apply any money or securities in accordance with Section 4.02 of this
Indenture by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 4.01 or 4.03 of this Indenture, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money or securities in accordance with Section 4.02 of this
Indenture; provided that, if the Company has made any payment of principal of or
--------
interest on any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or securities held by the Trustee or paying
Agent.
SECTION 4.05. Subordination Provisions Inapplicable. Notwithstanding
--------------------------------------
anything contained herein to the contrary, any money that shall have been
deposited by the Company with the Trustee pursuant to Section 4.01 or
43
Section 4.03 shall not be subject to the provisions of Article Thirteen of this
Indenture respecting subordination of the Securities; provided, however, that
-------- -------
said provisions respecting subordination shall continue to apply to such money,
if any, that has been returned to the Company or its legal representative
pursuant to any legal proceeding or an order or judgment of a court or
governmental authority.
ARTICLE V
Remedies
--------
SECTION 5.01. Events of Default. "Event of Default", wherever used
------------------
herein, means with respect to any series of Securities any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in or pursuant
to the supplemental indenture or Board Resolution creating such series of
Securities or in the form of Security for such series:
(a) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(b) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(c) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
(d) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture in respect of the Securities of such
series (other than a covenant or warranty in respect of the Securities of
such series a default in the performance of which or the breach of which is
elsewhere in this Section specifically dealt with), all of such covenants
44
and warranties in the Indenture which are not expressly stated to be for
the benefit of a particular series of Securities being deemed in respect of
the Securities of all series for this purpose, and continuance of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of such series, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(e) the entry of an order for relief against the Company under Title
11, United States Code (the "Federal Bankruptcy Act") by a court having
jurisdiction in the premises or a decree or order by a court having
jurisdiction in the premises adjudging the Company or any Material U.S.
Subsidiary a bankrupt or insolvent under any other applicable Federal or
State law, or the entry of a decree or order approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or such Material U.S. Subsidiary under the
Federal Bankruptcy Act or any other applicable Federal or State law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or such Material U.S. Subsidiary or
of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 90 consecutive days; or
(f) the consent by the Company or any Material U.S. Subsidiary to the
institution of bankruptcy or insolvency proceedings against it, or-the
filing by it of a petition or answer or consent seeking reorganization or
relief under the Federal Bankruptcy Act or any other applicable Federal or
State law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or such Material U.S. Subsidiary
or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due, or the
taking of
45
corporate action by the Company or such Material U.S. Subsidiary in
furtherance of any such action; or
(g) any other Event of Default provided in the supplemental indenture
or Board Resolution under which such series of Securities is issued or in
the form of Security for such series.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
---------------------------------------------------
an Event of Default described in paragraph (a), (b), (c), (d) or (g) (if the
Event of Default under paragraph (d) or (g) is with respect to less than all
series of Securities then Outstanding) of Section 5.01 occurs and is continuing
with respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding hereunder
(each such series acting as a separate class), by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the principal
amount (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of such series and all accrued
interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of such series contained to the
contrary notwithstanding. If an Event of Default described in paragraph (d) or
(g) (if the Event of Default under paragraph (d) or (g) is with respect to all
series of Securities then Outstanding), of Section 5.01 occurs and is
continuing, then and in each and every such case; unless the principal of all
the Securities shall have already become due and payable, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of all the
Securities then outstanding hereunder (treated as one class), by notice in
writing to the Company (and to the Trustee if given by Holders), may declare the
principal amount (or, if any Securities are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof)
of all the Securities then Outstanding and all accrued interest thereon to be
due and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Indenture or in the
Securities contained to the contrary notwithstanding.
46
If an Event of Default of the type set forth in clause (e) or clause (f) of
Section 5.01 occurs and is continuing, the principal of and any interest on the
Securities then Outstanding shall become immediately due and payable.
At any time after such a declaration of acceleration has been made
with respect to the Securities of any or all series, as the case may be, and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities of such series, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue installments of interest on the Securities of
such series;
(ii) the principal of (and premium, if any, on) any Securities of
such series which have become due otherwise than by such declaration
of acceleration, and interest thereon at the rate or rates prescribed
therefor by the terms of the Securities of such series, to the extent
that payment of such interest is lawful;
(iii) interest upon overdue installments of interest at the rate
or rates prescribed therefor by the terms of the Securities of such
series to the extent that payment of such interest is lawful, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee
under Section 6.07; and
(b) all Events of Default with respect to such series of Securities,
other than the nonpayment of the principal of the Securities of such series
which have become due solely by such acceleration, have been cured or
waived as provided in Section 5.13.
47
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if
- --------
(a) default is made in the payment of any installment of interest on
any Security of any series when such interest becomes due and payable;
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof; or
(c) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series;
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee, pay
to it, for the benefit of the Holder of any such Security (or the Holders of any
such series in the case of Clause (c) above), the whole amount then due and
payable on any such Security (or on the Securities of any such series in the
case of Clause (c) above) for principal (and premium, if any) and interest, with
interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor by
the terms of any such Security (or of securities of any such series in the case
of Clause (c) above); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee under Section 6.07.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect
48
the money adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to any series of securities occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the
---------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceedings or otherwise,
(a) to file and prove a claim for the whole amount of principal (or
portion thereof determined pursuant to Section 3.01(16) to be provable in
bankruptcy) (and premium, if any) and interest owing and unpaid in respect
of the Securities and to file such other papers or documents as may be
necessary and advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all
other amounts due the Trustee under Section 6.07) and of the
Securityholders allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
49
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities. All rights of action and claims under this Indenture or the
- -----------
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel and any other amounts due the Trustee under Section 6.07, be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by
-------------------------------
the Trustee with respect to a series of Securities pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
(a) to the payment of all amounts due the Trustee under Section 6.07;
(b) subject to Article XIII, to the payment of the amounts then due
and unpaid upon the Securities of that series for principal (and premium, if
any) and interest, in respect of which or for the benefit of which such money
has
50
been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively.
SECTION 5.07. Limitation on Suits. No Holder of any Security of any
--------------------
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to Securities of such series;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of such series; it being
understood and intended that no one or more Holders of Securities of such
series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Securities of such series, or
to obtain or to seek to obtain priority or preference over any other such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and proportionate benefit of all the
Holders of all Securities of such series.
51
SECTION 5.08. Unconditional Right of Securityholders To Receive
-------------------------------------------------
Principal, Premium and Interest. Notwithstanding any other provisions in this
- --------------------------------
Indenture except for the provisions of Article XIII, the Holder of any Security
shall have the right, which is absolute and unconditional, to receive payment of
the principal of (and premium, if any) and (subject to Section 3.07) interest on
such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption or repayment, on the Redemption Date or Repayment
Date, as the case may be) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or
-----------------------------------
any Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee and the
Securityholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securityholders shall
continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy
-------------------------------
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy give hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of
-----------------------------
the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
52
SECTION 5.12. Control by Securityholders. The Holders of a majority
---------------------------
in principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series, provided that:
(a) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or would conflict with this
Indenture or if the Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in such
direction; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than
------------------------
a majority in principal amount of the Outstanding Securities of any series may
on behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured:
(a) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any sinking
or purchase fund or analogous obligation with respect to the Securities of
such series; or
(b) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
53
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
----------------------
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series to which the suit relates, or
to any suit instituted by and Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date, as
the case may be).
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
---------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
54
ARTICLE IV
The Trustee
-----------
SECTION 6.01. Certain Duties and Responsibilities. (a) Except during
------------------------------------
the continuance of an Event of Default with respect to any series of Securities:
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture with respect to the
Securities of such series, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that:
(i) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
55
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02. Notice of Defaults. Within 90 days after the
-------------------
occurrence of any default hereunder with respect to Securities of any series,
the Trustee shall transmit by mail to all Securityholders of such series, as
their names and addresses appear in the Security Register, notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
-------- -------
payment of the principal of (or premium, if any) or interest on any Security of
such series or in the payment of any sinking or purchase fund installment or
analogous obligation with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Securityholders of such series; and
provided further that in the case of any default of the character specified in
- -------- -------
Section 5.01(4) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities
56
of any series, means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
SECTION 6.03. Certain Rights of Trustee. Except as otherwise
--------------------------
provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument,
57
opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be charged with knowledge of any default (as
defined in Section 6.02) or Event of Default with respect to the Securities
of any series for which it is acting as Trustee unless either (1) a
Responsible Officer of the Trustee assigned to the Corporation Trust
Department of the Trustee (or any successor division or department of the
Trustee) shall have actual knowledge of such default or Event of Default or
(2) written notice of such default or Event of Default shall have been
given to the Trustee by the Company or any other obligor on such Securities
or by any Holder of such Securities; and
(i) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.
-------------------------------------------------------
The recitals contained herein and in the Securities, except the certificates of
authentication, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Authenticating
--------------------
Agent, any Paying Agent, the Security
58
Registrar, any Conversion Agent or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar, Conversion Agent or such other agent.
SECTION 6.06. Money Held in Trust. Subject to the provisions of
--------------------
Section 10.03 hereof, all moneys in any currency or currency received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company agrees:
-------------------------------
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a
59
lien prior to the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the payment of principal of
(and premium, if any) or interest on particular Securities.
When the Trustee incur expenses or renders services in connection with
an Event of Default specified in Section 5.01(e) or (f), the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy law.
The Company's obligations under this Section 6.07 and any lien arising
hereunder shall survive the resignation or removal of any Trustee, the discharge
of the Company's obligations pursuant to Article IV of this Indenture and/or the
termination of this Indenture.
SECTION 6.08. Disqualification; Conflicting Interests. The Trustee
----------------------------------------
for the Securities of any series issued hereunder shall be subject to the
provisions of Section 3.10(b) of the Trust Indenture Act during the period of
time provided for therein. In determining whether the Trustee has a conflicting
interest as defined in Section 3.10(b) of the Trust Indenture Act with respect
to the Securities of any series, there shall be excluded this Indenture with
respect to Securities of any particular series of Securities other than that
series. Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the second to last paragraph of
Section 3.10(b) of the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall
----------------------------------------
at all times be a Trustee hereunder with respect to each series of Securities,
which shall be either:
(a) a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination
by Federal or State authority; or
(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized under
such laws to exercise corporate trust powers, and subject to supervision or
examination by authority of
60
such foreign government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $50 million.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company shall serve as trustee
for the Securities of any series issued hereunder. If at any time the Trustee
with respect to any series of Securities shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a)
--------------------------------------------------
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign with respect to any series of Securities
at any time by giving written notice thereof to the Company. If an instrument
of acceptance by a successor Trustee shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of that series, delivered to the Trustee and to
the Company.
61
(d) If at any time:
(i) the Trustee shall fail to comply with Section 3.10(b) of the Trust
Indenture Act pursuant to Section 6.08 with respect to any series of
Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that series
for at least six months, unless the Trustee's duty to resign is stayed in
accordance with the provisions of Section 3.10(b) of the Trust Indenture
Act; or
(ii) the Trustee shall cease to be eligible under Section 6.09 with
respect to any series of Securities and shall fail to resign after written
request therefor by the Company or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any
series of Securities; or
(iv) the Trustee shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (iv), with respect
to all series, or (B) subject to Section 5.14, any Securityholder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (iv),
with respect to all series.
(e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee for that series of Securities. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities shall be
62
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to such series
and supersede the successor Trustee appointed by the Company with respect to
such series. If no successor Trustee with respect to such series shall have
been so appointed by the Company or the Securityholders of such series and
accepted appointment in the manner hereinafter provided, subject to Section
5.14, any Securityholder who has been a bona fide Holder of a Security of that
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of Securities of that
series as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
principal Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every
---------------------------------------
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the predecessor Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the predecessor Trustee
shall become effective with respect to any series as to which it is resigning or
being removed as Trustee, and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the predecessor Trustee with respect to any such series; but, on
request of the Company or the successor Trustee, such predecessor Trustee shall,
upon payment of its reasonable charges, if any, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the predecessor Trustee, and shall duly assign, transfer and deliver
to such successor Trustee all property and money held by such predecessor
Trustee hereunder with respect to all or any such series, subject nevertheless
to its lien, if any, provided for in Section 6.07. Upon request of any such
successor Trustee, the Company shall execute any and all
63
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
predecessor Trustee and each successor Trustee with respect to the Securities of
any applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the predecessor
Trustee is not being succeeded shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.
No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series under this
Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- ---------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
64
SECTION 6.13. Preferential Collection of Claims Against Company. (a)
--------------------------------------------------
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within three months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):
(i) an amount equal to any and all reduction in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three-month period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (ii) of this Subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(ii) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (I) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (II) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (III) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law;
65
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default as defined in
Subsection (c) of this Section would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C) or against the release of any property held as security for such claim
as provided in paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three-month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special
66
account and before crediting to the respective claims of the Trustee and the
Securityholders and the holders of other indenture securities dividends on
claims filed against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act or applicable State
law, but after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other than from such
dividends and from the funds and property so held in such special account. As
used in this paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, whether such distribution is made in
cash, securities, or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceedings for reorganization is pending shall
have jurisdiction (i) to apportion between the Trustee and the Securityholders
and the holders of other indenture securities, in accordance with the provisions
of this paragraph, the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to
give to the provisions of this paragraph due consideration in determining the
fairness of the distributions to be made to the Trustee and the Securityholders
and the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise the
value of any securities or other property held in such special account or as
security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three-month period, it
shall be subject to the provisions of
67
this Subsection if and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from
(i) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(ii) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon), if notice of such advances and of the circumstances surrounding
the making thereof is given to the Securityholders at the time and in the
manner provided in this Indenture;
(iii) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depository, or other similar
capacity;
(iv) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of this
Section;
(v) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
68
(vi) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in Subsection (c) of
this Section.
(c) For the purposes of this Section only:
(i) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable.
(ii) The term "other indenture securities" means securities upon
which the Company is an obligor outstanding under any other indenture (A)
under which the Trustee is also trustee, (B) which contains provisions
substantially similar to the provisions of this Section, and (C) under
which a default exists at the time of the apportionment of the funds and
property held in such special account.
(iii) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(iv) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(v) The term "Company" means any obligor upon the securities.
69
SECTION 6.14. Appointment of Authenticating Agent. At any time when
------------------------------------
any of the Securities remain Outstanding the Trustee, with the approval of the
Company, may appoint an authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original issuance,
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.06, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as an
Authenticating Agent, having a combined capital and surplus of not less than
$50 Million and, if other than the Company itself, subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any
70
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and, if other than the Company, to the Company.
The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and, if other than
the Company, to the company. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee, with the approval of the Company, may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.07.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the
71
Trustee's certificate of authentication, an alternate certificate of
authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned indenture.
CHEMICAL BANK,
as Trustee
by________________________
As Authenticating Agent
by________________________
Authorized Agent
72
ARTICLE VII
Securityholders' Lists and Reports by
-------------------------------------
Trustee and Company
-------------------
SECTION 7.01. Company To Furnish Trustee Names and Addresses of
------------------------------------ ------------
Securityholders. The Company will furnish or cause to be furnished to the
- ----------------
Trustee:
(a) semi-annually, not more than 15 days after December 15 and June 15
in each year in such form as the Trustee may reasonably require, a list of
the names and addresses of the Holders of Securities of each series as of
such December 15 and June 15, as applicable, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
- -------- -------
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.
SECTION 7.02. Preservation of Information; Communications to
----------------------------------------------
Securityholders. (a) The Trustee shall preserve, in as current a term as is
- ----------------
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Security Registrar, it so acting. The Trustee
may destroy any list furnished to it as provided in Section 701 upon receipt of
a new list so furnished.
(b) If three or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all
73
Securities with respect to their rights under this Indenture or under such
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 7.02(a), or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 7.02(a), and as to the approximate cost
of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
7.02(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless, within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Securities of such series or all Securityholders, as
the case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring, the
Trustee shall mail copies of such material to
74
all Securityholders of such series or all Securityholders, as the case may be,
with reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders of Securities in accordance with
Section 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 7.02(b).
SECTION 7.03. Reports by Trustee. (a) The term to "reporting date"
-------------------
as used in this Section means May 15. Within 60 days after the reporting date
in each year, beginning in 1993, the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the Security Register, a
brief report dated as of such reporting date with respect to any of the
following events which may have occurred during the 12 months preceding the date
of such report (but if no such event has occurred within such period, no report
need be transmitted):
(i) any change to its eligibility under Section 6.09 and its
qualifications under Section 6.08;
(ii) the creation of or any material change to a relationship
specified in Section 3.10(b)(1) through Section 3.10(b)(10) of the Trust
Indenture Act;
(iii) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of Securities of any series, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances so remaining
unpaid aggregate not more than one-half of 1% of the principal amount of
the Securities of such series Outstanding on the date of such report;
75
(iv) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor relation-
ship arising in any manner described in Section 613(b)(ii), (iii), (iv),
or (vi);
(v) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(vi) any additional issue of Securities for which the Trustee so acts
and which the Trustee has not previously reported; and
(vii) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 6.02.
(b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Securities of any series, on property or funds held or collected by it as
Trustee, and which it has not previously reported pursuant to this Subsection,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate 10% or less of
the principal amount of the Securities outstanding of such series at such time,
such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Company and be filed by the
Trustee with each stock exchange
76
upon which the Securities are listed, and also with the Commission. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 7.04. Reports by Company. The Company shall file with the
-------------------
Trustee, and transmit to Holders, such information, documents and other reports,
and such summaries thereof, as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant to such Act; provided that
--------
any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission. The Company also shall comply with
the other provisions of Trust Indenture Act Section 3.14(a).
ARTICLE VIII
Consolidation, Merger, Conveyance or Transfer
---------------------------------------------
SECTION 8.01. Company May Consolidate, etc., only on Certain Terms.
----------------------------------- -----------------
The Company shall not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to any
Person, unless:
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Company substantially as an entirety shall
be organized and existing under the laws of the United States of America or
any political subdivision thereof, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing; and
77
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 8.02. Successor Person Substituted. Upon any consolidation
-----------------------------
or merger, or any conveyance or transfer of the properties and assets of the
Company substantially as an entirety in accordance with Section 8.01, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein. In the event of any such conveyance or transfer, the Company as
the predecessor shall be discharged from all obligations and covenants under
this Indenture and the Securities and may be dissolved, wound up or liquidated
at any time thereafter.
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Supplemental Indentures Without Consent of
------------------------------- ----------
Securityholders. Without the consent of the Holders of any Securities, the
- ----------------
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another corporation or Person to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Securities contained;
(b) to add to the covenants of the Company, or to surrender any right
or power herein conferred upon the Company, for the benefit of the Holders
of the Securities of any or all series (and if such covenants or the
surrender of such right or power are to be for the benefit of less than all
series of Securities, stating that such covenants are expressly being
78
included or such surrenders are expressly being made solely for the benefit
of one or more specified series);
(c) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture;
(d) to add to this Indenture such provisions as may be expressly
permitted by the TIA, excluding, however, the provisions referred to in
Section 3.16(a)(2) of the TIA as in effect at the date as of which this
instrument was executed or any corresponding provision in any similar
Federal statute hereafter enacted;
(e) to establish any form of Security, as provided in Article II, and
to provide for the issuance of any series of Securities as provided in
Article III and to set forth the terms thereof, and/or to add to the rights
of the Holders of the Securities of any series;
(f) to evidence and provide for the acceptance of appointment by
another corporation as a successor Trustee hereunder with respect to one or
more series of Securities and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to Section 6.11;
(g) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of Default
are to be in respect of less than all series of Securities, stating that
such Events of Default are expressly being included solely for the benefit
of one or more specified series);
(h) to provide for the issuance of Securities in coupon as well as
fully registered form;
(i) to provide for the terms and conditions of conversion into Common
Stock or other Marketable Securities of the Securities of any series which
are convertible into Common Stock or other Marketable
79
Securities, if different from those set forth in Article XII; or
(j) to secure the Securities of any series pursuant to Section 10.06
or otherwise.
No supplemental indenture for the purposes identified in Clauses (b),
(c), (e) or (g) above may be entered into if to do so would adversely affect the
interest of the Holders of Securities of any series in any material respect.
SECTION 9.02. Supplemental Indentures with Consent of
---------------------------------------
Securityholders. With the consent of the Holders of not less than a majority in
- ----------------
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture or indentures, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of the Securities of each such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
- -------- -------
consent of the Holder of each Outstanding Security affected thereby:
(a) change the Maturity of the principal of, or the Stated Maturity of
any premium on, or any installment of interest on, any Security, or reduce
the principal amount thereof or the interest or any premium thereon, or
change the method of computing the amount of principal thereof or interest
thereon on any date or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Maturity or the Stated Maturity, as the case
may be, thereof (or, in the case of redemption or repayment, on or after
the Redemption Date or the Repayment Date, as the case may be), or alter
the provisions of this Indenture so as to affect adversely the terms, if
any, of conversion of any Securities into Common Stock or other securities,
or alter the provisions of Article XIII or the definition of Senior
Indebtedness so as to affect adversely the rights of any Holder of
Securities;
80
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences, provided for in this
Indenture;
(c) modify any of the provisions of this Section, Section 5.13 or
Section 10.06, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; or
(d) impair or adversely affect the right of any Holder to institute
suit for the enforcement of any payment on, or with respect to, the
Securities of any series on or after the Stated Maturity of such Securities
(or in the case of redemption, on or after the Redemption Date).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Securityholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
-------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own
81
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution
----------------------------------
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby to the extent provided therein.
SECTION 9.05. Conformity with Trust Indenture Act. Every
------------------------------------
supplemental indenture executed pursuant to this Article shall conform to the
requirements of TIA as then in effect.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
---------------------------------------------------
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 9.07. Subordination Unimpaired. No supplemental indenture
-------------------------
entered into under this Article shall modify, directly or indirectly, the
provisions of Article XIII or the definition of Senior Indebtedness in Section
1.01 in any manner that adversely affects the rights of the holders of Senior
Indebtedness then outstanding under Article XIII unless written consents are
obtained from holders of such Senior Indebtedness; provided, however, that in
-------- -------
any case where the instrument or agreement governing Senior Indebtedness
contains express provisions pertaining to the giving of consent in such
circumstances, such consents shall only be required to the extent they are
required under the terms of such instrument or agreement.
82
ARTICLE X
Covenants
---------
SECTION 10.01. Payment of Principal, Premium and Interest. With
-------------------------------------------
respect to each series of Securities, the Company will duly and punctually pay
the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will duly comply with all
the other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.
SECTION 10.02. Maintenance of Office or Agency. The Company will
--------------------------------
maintain an office or agency in each Place of Payment where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served and where
any Securities with conversion privileges may be presented and surrendered for
conversion. The Company will give prompt written notice to the Trustee of the
location, and of any change in the location, of such office or agency. If at
any time the Company shall fail to maintain such office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Unless otherwise set forth in, or pursuant to, a Board Resolution or
Indenture supplemental hereto with respect to a series of Securities, the
Company hereby initially designates as the Place of Payment for each series of
Securities, the Borough of Manhattan, the City and State of New York, and
initially appoints the Trustee at its Corporate Trust office as the Company's
office or agency for each such purpose in such city.
SECTION 10.03. Money for Security Payments To Be Held in Trust. If
------------------------------------------------
the Companies shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on, any of the Securities of such series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the
83
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any) or interest on, any Securities of such series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal (and premium, if any) or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee for
any series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities of such series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any such
payment of principal (and premium, if any) or interest on the Securities of
such series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent in respect of each and every series of Securities as to which it
seeks to discharge this Indenture
84
or, if for any other purpose, all sums so held in trust by the Company in
respect of all Securities, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease. The Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company mail to
the Holders of the Securities as to which the money to be repaid was held in
trust, as their names and addresses appear in the Security Register, a notice
that such moneys remain unclaimed and that, after a date specified in the
notice, which shall not be less than 30 days from the date on which the notice
was first mailed to the Holders of the Securities as to which the money to be
repaid was held in trust, any unclaimed balance of such moneys then remaining
will be paid to the Company free of the trust formerly impressed upon it.
SECTION 10.04. Statement as to Compliance. The Company will deliver
---------------------------
to the Trustee, within 120 days after the end of each fiscal year, a written
statement signed by the principal executive officer, principal financial officer
or principal accounting officer of the Company stating that:
(a) a review of the activities of the Company during such year and of
performance under this Indenture and under the terms of the Securities has
been made under his supervision; and
(b) to the best of his knowledge, based on such review, the Company
has fulfilled all its obligations under this Indenture and has complied
with all conditions and covenants on its part contained in this
85
Indenture through such year, or, if there has been a default in the
fulfillment of any such obligation, covenant or condition, specifying each
such default known to him and the nature and status thereof.
For the purpose of this Section 10.04, default and compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.
SECTION 10.05. Legal Existence. Subject to Article VIII the Company
----------------
will do or cause to be done all things necessary to preserve and keep in full
force and effect its legal existence.
SECTION 10.06. Waiver of Certain Covenants. The Company may omit in
----------------------------
respect of any series of Securities, in any particular instance, to comply with
any covenant or condition set forth in a Board Resolution or supplemental
indenture with respect to the Securities of such series, unless otherwise
specified in such Board Resolution or supplemental indenture, if before or after
the time for such compliance the Holders of at least a majority in principal
amount of the Securities at the time Outstanding of such series shall, by Act of
such Securityholders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect. Nothing in this Section 10.06
shall permit the waiver of compliance with any covenant or condition set forth
in such Board Resolution or supplemental indenture which, if in the form of an
indenture supplemental hereto, would not be permitted by Section 9.02 without
the consent of the Holder of each outstanding Security affected thereby.
ARTICLE XI
Redemption of Securities
------------------------
SECTION 11.01. Applicability of Article. The Company may reserve the
-------------------------
right to redeem and pay before Stated Maturity all or any part of the Securities
of any series, either by optional redemption, sinking or purchase
86
fund or analogous obligation or otherwise, by provision therefor in the form of
Security for such series established and approved pursuant to Section 2.02 and
on such terms as are specified in such form or in the indenture supplemental
hereto with respect to Securities of such series as provided in Section 3.01.
Redemption of Securities of any series shall be made, subject to the provisions
of Section 13.03 hereof, in accordance with the terms of such Securities and, to
the extent that this Article does not conflict with such terms, the succeeding
Sections of this Article. Notwith-standing anything to the contrary in this
Indenture, except in the case of redemption pursuant to a sinking fund, the
Trustee shall not make any payment in connection with the redemption of
Securities until the close of business on the Redemption Date.
SECTION 11.02. Election To Redeem; Notice to Trustee. The election
--------------------------------------
of the Company to redeem any Securities redeemable at the election of the
Company shall be evidenced by, or pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series and the Tranche (as defined
in Section 11.03) to be redeemed.
In the case of any redemption of Securities (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
SECTION 11.03. Selection by Trustee of Securities To Be Redeemed. If
--------------------------------------------------
less than all the Securities of like tenor and terms of any series (a "Tranche")
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such Tranche not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may include
provision for the selection for redemption of portions of the principal of
Securities of such Tranche of a
87
denomination larger than the minimum authorized denomination for Securities of
that series. Unless otherwise provided in the terms of a particular series of
Securities, the portions of the principal of Securities so selected for partial
redemption shall be equal to the minimum authorized denomination of the
Securities of such series, or an integral multiple thereof, and the principal
amount which remains outstanding shall not be less than the minimum authorized
denomination for Securities of such series. If less than all the Securities of
unlike tenor and terms of series are to be redeemed, the particular Tranche of
Securities to be redeemed shall be selected by the Company.
If any convertible Security selected for partial redemption is
converted in part before the termination of the conversion right with respect to
the portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Upon any redemption of fewer than all the Securities of a Series or
Tranche, the Company and the Trustee may treat as Outstanding any Securities
surrendered for conversion during the period of 15 days next preceding the
mailing of a notice of redemption, and need not treat as Outstanding any
Security authenticated and delivered during such period in exchange for the
unconverted portion of any Security converted in part during such period.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal of such Security which has been or is to be redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be
---------------------
given by first-class mail, postage prepaid, mailed not less than 20 (or 15, if
so provided in the Board Resolution establishing the relevant series) nor more
than 45 days prior to the Redemption Date, to each holder of Securities to be
redeemed, at his address appearing in the Security Register.
88
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the Securities to be redeemed, from the
Holder to whom the notice is given;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security, and that interest, if any, thereon
shall cease to accrue from and after said date;
(e) the place where such Securities are to be surrendered for payment
of the Redemption Price, which shall be the office or agency of the Company
in the Place of Payment;
(f) that the redemption is on account of a sinking or purchase fund,
or other analogous obligation, if that be the case;
(g) if such Securities are convertible into Common Stock or other
securities, the Conversion Price or other conversion price and the date on
which the right to convert such Securities into Common Stock or other
securities will terminate; and
(h) that the redemption may be rescinded by the Company, at its sole
option, pursuant to Section 11.09 of this Indenture upon the occurrence of
a Redemption Rescission Event, except in the case of any redemption on
account of a sinking fund.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.05. Deposit of Redemption Price. On or prior to any
----------------------------
Redemption Date and subject to Section 11.09, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in
89
Section 10.03) an amount of money sufficient to pay the Redemption Price of all
the Securities which are to be redeemed on that date. If any Security to be
redeemed is converted into Common Stock or other securities, any money so
deposited with the Trustee or a Paying Agent shall be paid to the Company upon
Company Request or, if then so segregated and held in trust by the Company,
shall be discharged from such trust.
SECTION 11.06. Securities Payable on Redemption Date. Notice of
--------------------------------------
Redemption having been given as aforesaid, the Securities so to be redeemed
shall, subject to Section 11.09, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date (unless
the Company shall default in the payment of the Redemption Price) such
Securities shall cease to bear interest and any rights to convert such
Securities shall terminate. Upon surrender of such Securities for redemption in
accordance with the notice and subject to Section 11.09, such Securities shall
be paid by the Company at the Redemption Price. Unless otherwise provided with
respect to such Securities pursuant to Section 3.01, installments of interest
the Stated Maturity of which is on or prior to the Redemption Date shall be
payable to the Holders of such Securities registered as such on the relevant
Regular Record Dates according to their terms and the provisions of Section
3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security, or as otherwise
provided in such Security.
SECTION 11.07. Securities Redeemed in Part. Any Security which is to
----------------------------
be redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and Stated Maturity and of like tenor and terms, of any
authorized denomination as requested by such Holder in aggregate principal
90
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
SECTION 11.08. Provisions with Respect to Any Sinking Funds. Unless
---------------------------------------------
the form or terms of any series of Securities shall provide otherwise, in lieu
of making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (a) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company or converted by the Holder thereof into Common Stock or other
securities, or (b) receive credit for any Securities of such series (not
previously so credited) acquired by the Company (including by way of optional
redemption (pursuant to the sinking fund or otherwise but not by way of
mandatory sinking fund redemption) or converted by the Holder thereof into
Common Stock or other securities and theretofore delivered to the Trustee for
cancellation, and if it does so (i) Securities so delivered or credited shall be
credited at the applicable sinking fund Redemption Price with respect to
Securities of such series and (ii) on or before the 60th day next preceding each
sinking fund Redemption Date with respect to such series of Securities, the
Company will deliver to the Trustee (A) an Officers' Certificate specifying the
portions of such sinking fund payment to be satisfied by payment of cash and by
delivery or credit of Securities of such series acquired by the Company or
converted by the Holder thereof and (B) such Securities, to the extent not
previously surrendered. Such Officers' Certificate shall also state the basis
for such credit and that the Securities for which the Company elects to receive
credit have not been previously so credited and were not acquired by the Company
through operation of the mandatory sinking fund, if any, provided with respect
to such Securities and shall also state that no Event of Default with respect to
Securities of such series has occurred and is continuing. All Securities so
delivered to the Trustee shall be canceled by the Trustee and no Securities
shall be authenticated in lieu thereof.
If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser, sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date
91
with respect to Securities of such series next following the date of such
payment to the redemption of Securities of such series at the applicable sinking
fund Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 11.06. The Trustee shall select, in the manner provided in
Section 11.03, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 11.04 (and with the
effect provided in Section 11.06) for the redemption of Securities in part at
the option of the Company. Any sinking fund moneys not so applied or allocated
by the Trustee to the redemption of Securities of such series shall be added to
the next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 11.08. Any and all sinking fund
moneys with respect to Securities of any series held by the Trustee at the
Maturity of Securities of such series, and not held for the payment or
redemption of particular Securities of such series, shall be applied by the
Trustee, together with other moneys, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of the Securities of such
series at Maturity.
On or before each sinking fund Redemption Date provided with respect
to Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 11.08.
SECTION 11.09. Rescission of Redemption. In the event that this
-------------------------
Section 11.09 is specified to be applicable to a series of Securities pursuant
to Section 3.01 and a Redemption Rescission Event shall occur following any day
on which a notice of redemption shall have been given pursuant to Section 11.04
hereof but at or prior to the time and date fixed for redemption as set forth in
such notice of redemption, the Company may, at its sole option, at any time
prior to the earlier of (a) the close of business on that day which is two
Trading Days following such Redemption Rescission Event and (b) the time and
date fixed for redemption as set forth in such notice, rescind the redemption to
which such notice of redemption shall have
92
related by making a public announcement of such rescission (the date on which
such public announcement shall have been made being hereinafter referred to as
the "Rescission Date"). The Company shall be deemed to have made such
announcement if it shall issue a release to the Dow Jones News Service, Reuters
Information Services or any successor news wire service. From and after the
making of such announcement, the Company shall have no obligation to redeem
Securities called for redemption pursuant to such notice of redemption or to pay
the Redemption Price therefor and all rights of Holders of Securities shall be
restored as if such notice of redemption had not been given. As promptly as
practicable following the making of such announcement, the company shall
telephonically notify the Trustee and the paying Agent of such rescission. The
Company shall give notice of any such rescission by first-class mail, postage
prepaid, mailed as promptly as practicable but in no event later than the close
of business on that day which is five Trading Days following the Rescission Date
to each Holder of Securities at the close of business on the Rescission Date, to
any other Person that was a Holder of Securities and that shall have surrendered
Securities for conversion following the giving of notice of the subsequently
rescinded redemption and to the Trustee and the Paying Agent. Each notice of
rescission shall (i) state that the redemption described in the notice of
redemption has been rescinded, (ii) state that any Converting Holder shall be
entitled to rescind the conversion of Securities surrendered for conversion
following the day on which notice of redemption was given but on or prior to the
date of the mailing of the Company's notice of rescission, (iii) be accompanied
by a form prescribed by the Company to be used by any Converting Holder
rescinding the conversion of Securities so surrendered for conversion (and
instructions for the completion and delivery of such form, including
instructions with respect to any payment that may be required to accompany such
delivery) and (iv) state that such form must be properly completed and received
by the Company no later than the close of business on a date that shall be 15
Trading Days following the date of the mailing of such notice of rescission.
93
ARTICLE XII
Conversion
----------
SECTION 12.01. Conversion Privilege. If so provided in a Board
---------------------
Resolution with respect to the Securities of any series, the Holder of a
Security of such series shall have the right, at such Holder's option, to
convert, in accordance with the terms of such series of Securities and this
Article XII, all or any part (in a denomination of, unless otherwise specified
in a Board Resolution or supplemental indenture with respect to Securities of
such series, $1,000 in principal amount or any integral multiple thereof) of
such Security into shares of Common Stock or other Marketable Securities
specified in such Board Resolution at any time or, as to any Securities called
for redemption, at any time prior to the time and date fixed for such redemption
(unless the Company shall default in the payment of the Redemption Price, in
which case such right shall not terminate at such time and date). The
provisions of this Article XII shall not be applicable to the Securities of a
series unless otherwise specified in a Board Resolution with respect to the
Securities of such series.
SECTION 12.02. Conversion Procedure; Rescission of Conversion;
-----------------------------------------------
Conversion Price; Fractional Shares. (a) Each Security to which this Article
- ------------------------------------
is applicable shall be convertible at the office of the Conversion Agent, and at
such other place or places, if any, specified in a Board Resolution with respect
to the Securities of such series, into fully paid and nonassessable shares
(calculated to the nearest one-hundredth of a share) of Common Stock or other
Marketable Securities. The Securities will be converted into shares of Common
Stock or such other Marketable Securities at the Conversion Price therefor. No
payment or adjustment shall be made in respect of dividends on the Common Stock
or such other Marketable Securities or accrued interest on a converted Security
except as described in Section 12.09. The Company may, but shall not be
required to, in connection with any conversion of Securities, issue a fraction
of a share of Common Stock or of such other Marketable Security, and, if the
Company shall determine not to issue any such fraction, the Company shall,
subject to Section 12.03(d), make a cash payment (calculated to the nearest
cent) equal to such fraction multiplied by the Closing Price of the Common Stock
or such other Marketable Security on the last Trading Day prior to the date of
conversion.
94
(b) Before any Holder of a Security shall be entitled to convert the
same into Common Stock or other Marketable Securities, such Holder shall
surrender such Security duly endorsed to the Company or in blank, at the office
of the Conversion Agent or at such other place or places, if any, specified in a
Board Resolution with respect to the Securities of such series, and shall give
written notice to the Company at said office or place that he elects to convert
the same and shall state in writing therein the principal amount of Securities
to be converted and the name or names (with addresses) in which he wishes the
certificate or certificates for Common Stock or for such other marketable
Securities to be issued; provided, however, that no Security or portion thereof
-------- -------
shall be accepted for conversion unless the principal amount of such Security or
such portion, when added to the principal amount of all other Securities or
portions thereof then being surrendered by the Holder thereof for conversion,
exceeds the then effective Conversion Price with respect thereto. If more than
one Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares of Common Stock or such other Marketable Securities
which shall be deliverable upon conversion shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof to
the extent permitted thereby) so surrendered. Subject to the next succeeding
sentence, the Company will, as soon as practicable thereafter, issue and deliver
at said office or place to such Holder of a Security, or to his nominee or
nominees, certificates for the number of full shares of Common Stock or other
Marketable Securities to which he shall be entitled as aforesaid, together,
subject to the last sentence of paragraph (a) above, with cash in lieu of any
fraction of a share to which he would otherwise be entitled. The Company shall
not be required to deliver certificates for shares of Common Stock or other
Marketable Securities while the stock transfer books for such stock or the
transfer books for such Marketable Securities, as the case may be, or the
Security Register are duly closed for any purpose, but certificates for shares
of Common Stock or other Marketable Securities shall be issued and delivered as
soon as practicable after the opening of such books or Security Register. A
Security shall be deemed to have been converted as of the close of business on
the date of the surrender of such Security for conversion as provided above, and
the person or persons entitled to receive the Common Stock or other Marketable
Securities issuable upon such conversion shall be treated for all purposes as
the record Holder or Holders of such
95
Common Stock or other Marketable Securities as of the close of business on such
date. In case any Security shall be surrendered for partial conversion, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Securities so surrendered, without charge
to such Holder (subject to the provisions of Section 12.08), a new Security or
Securities in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Security.
(c) Notwithstanding anything to the contrary contained herein, in the
event the Company shall have rescinded a redemption of Securities Pursuant to
Section 11.09 hereof, any Holder of Securities that shall have surrendered
Securities for conversion following the day on which notice of the subsequently
rescinded redemption shall have been given but prior to the later of (i) the
close of business on the Trading Day next succeeding the date on which public
announcement of the rescission of such redemption shall have been made and (ii)
the date of the mailing of the notice of rescission required by Section 11.09
hereof (a "Converting Holder") may rescind the conversion of such Securities
surrendered for conversion by (A) properly completing a form prescribed by the
Company and mailed to Holders of Securities (including Converting Holders) with
the Company's notice of rescission, which form shall provide for the
certification by any Converting Holder rescinding a conversion on behalf of any
beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934) of Securities that the beneficial ownership (within the meaning of
such Rule) of such Securities shall not have changed from the date on which such
Securities were surrendered for conversion to the date of such certification,
and (B) delivering such form to the Company no later than the close of business
on the date which is 15 Trading Days following the date of the mailing of the
Company's notice of rescission. The delivery of such form by a Converting
Holder shall be accompanied by (I) any certificates representing shares Of
Common Stock or other securities issued to such Converting Holder upon a
conversion of Securities that shall be rescinded by the proper delivery of such
form (the "Surrendered Securities"),(II) any securities, evidences of
indebtedness or assets (other than cash) distributed by the Company to such
Converting Holder by reason of such Converting Holder being a record holder of
Surrendered Securities and (III) payment in New York Clearing House funds or
other
96
funds acceptable to the Company of an amount equal to the sum of (1) any cash
such Converting Holder may have received in lieu of the issuance of fractional
Surrendered Securities and (2) any cash paid or payable by the Company to such
Converting Holder by reason of such Converting Holder being a record holder of
Surrendered Securities. Upon receipt by the Company of any such form properly
completed by a Converting Holder and any certificates, securities, evidences of
indebtedness, assets or cash payments required to be returned by such Converting
Holder to the Company as set forth above, the Company shall instruct the
transfer agent or agents for shares of Common Stock or other securities to
cancel any certificates representing Surrendered Securities (which Surrendered
Securities shall be deposited in the treasury of the Company) and shall instruct
the Registrar to reissue certificates representing Securities to such Converting
Holder (which Securities shall be deemed to have been Outstanding at all times
during the period following their surrender for conversion). The Company shall,
as promptly as practicable, and in no event more than five Trading Days
following the receipt of any such properly completed form and any such
certificates, securities, evidences of indebtedness, assets or cash payments
required to be so returned, pay to the Holder of Securities surrendered to the
Company pursuant to a rescinded conversion or as otherwise directed by such
Holder any interest paid or other payment made to Holders of Securities during
the period from the time such Securities shall have been surrendered for
conversion to the rescission of such conversion. All questions as to the
validity, form, eligibility (including time of receipt) and acceptance of any
form submitted to the Company to rescind the conversion of Securities, including
questions as to the proper completion or execution of any such form or any
certification contained therein, shall be resolved by the Company, whose
determination shall be final and binding.
SECTION 12.03. Adjustment of Conversion Price for Common Stock or
---------------------------------- ---------------
Other Marketable Securities. The Conversion Price with respect to any Security
- ----------------------------
which is convertible into Common Stock or other Marketable Securities shall be
adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, (i) pay a dividend in shares of its
Common Stock or other Marketable Securities, (ii) combine its outstanding
shares of Common Stock or other Marketable
97
Securities into a smaller number of shares or securities, (iii) subdivide
its outstanding shares of Common Stock or other Marketable Securities or
(iv) issue by reclassification of its shares of Common stock or other
Marketable Securities any shares of stock or other Marketable Securities of
the Company, the Conversion Price in effect immediately before such action
shall be adjusted so that the Holders of such Securities, upon conversion
thereof into Common Stock or other Marketable Securities immediately
following such event, shall be entitled to receive the kind and amount of
shares of capital stock of the Company or other Marketable Securities which
they would have owned or been entitled to receive upon or by reason of such
event if such Securities had been converted immediately before the record
date (or, if no record date, the effective date) for such event. An
adjustment made pursuant to this Section 12.03(a) shall become effective
retroactively immediately after the record date in the case of a dividend
or distribution and shall become effective retroactively immediately after
the effective date in the case of a subdivision, combination or
reclassification. For the purposes of this Section 12.03(a), each Holder
of Securities shall be deemed to have failed to exercise any right to elect
the kind or amount of securities receivable upon the payment of any such
dividend, subdivision, combination or reclassification (provided that, if
the kind or amount of securities receivable upon such dividend,
subdivision, combination or reclassification is not the same for each
nonelecting share, the kind and amount of securities or other property
receivable upon such dividend, subdivision, combination or reclassification
for each nonelecting share shall be deemed to be the kind and amount so
receivable per share by a plurality of the nonelecting shares).
(b) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, issue rights or warrants to all
holders of shares of its Common Stock or other Marketable Securities
entitling them (for a period expiring within 45 days after the record date
for such issuance) to subscribe for or purchase shares of Common Stock or
other Marketable Securities (or securities convertible into shares of
Common Stock or other Marketable Securities) at a price per share less than
the Current Market Price of the Common Stock or other Marketable
98
Securities at such record date (treating the price per share of the
securities convertible into Common Stock or other Marketable Securities as
equal to (i) the sum of (A) the price for a unit of the security
convertible into Common Stock or other Marketable Securities plus (B) any
additional consideration initially payable upon the conversion of such
security into Common Stock or other Marketable Securities divided by (ii)
the number of shares of Common Stock or other Marketable Securities
initially underlying such convertible security), the Conversion Price with
respect to such Securities shall be adjusted so that it shall equal the
price determined by dividing the Conversion Price in effect immediately
prior to the date of issuance of such rights or warrants by a fraction, the
numerator of which shall be the number of shares of Common Stock or other
Marketable Securities outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock or other
Marketable securities offered for subscription or purchase (or into which
the convertible securities so offered are initially convertible) and the
denominator of which shall be the number of shares of Common Stock or other
Marketable Securities outstanding on the date of issuance of such rights or
warrants plus the number of shares or securities which the aggregate
offering price of the total number of shares or securities so offered for
subscription or purchase (or the aggregate purchase price of the
convertible securities so offered plus the aggregate amount of any
additional consideration initially payable upon conversion of such
Securities into Common Stock or other Marketable Securities) would purchase
at such Current Market Price of the Common Stock or other Marketable
Securities. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants.
(c) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, distribute to all holders of shares
of its Common Stock or other Marketable Securities (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock or other
Marketable Securities are not changed or exchanged) cash, evidences of its
indebtedness, securities or assets (excluding (i) regular periodic cash
dividends
99
in amounts, if any, determined from time to time by the Board of Directors,
(ii) dividends payable in shares of Common Stock or other Marketable
Securities for which adjustment is made under Section 12.03(a) or (iii)
rights or warrants to subscribe for or purchase securities of the Company
(excluding those referred to in Section 12.03(b)), the Conversion Price
with respect to such Securities shall be adjusted so that it shall equal
the price determined by dividing the Conversion Price in effect immediately
prior to the date of such distribution by a fraction, the numerator of
which shall be the Current Market Price of the Common Stock or other
Marketable securities on the record date referred to below and the
denominator of which shall be such Current Market Price of the Common Stock
or other Marketable Securities less the then fair market value (as
determined by the Board of Directors of the Company, whose determination
shall be conclusive) of the portion of the cash or assets or evidences of
indebtedness or securities so distributed or of such subscription rights or
warrants applicable to one share of Common Stock or one other Marketable
Security (provided that such denominator shall never be less than one);
provided, however, that no adjustment shall be made with respect to any
-------- -------
distribution of rights to purchase securities of the Company if a Holder of
Securities would otherwise be entitled to receive such rights upon
conversion at any time of such Securities into Common Stock or other
Marketable Securities unless such rights are subsequently redeemed by the
Company, in which case such redemption shall be treated for purposes of
this Section as a dividend on the Common Stock or other Marketable
Securities. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders or
holders of Marketable Securities entitled to receive such distribution;
and, in the event that such distribution is not so made, the Conversion
Price shall again be adjusted to the Conversion Price which would then be
in effect if such record date had not been fixed.
(d) The Company shall be entitled to make such additional adjustments
in the Conversion Price, in addition to those required by Sections
12.03(a), 12.03(b) and 12.03(c), as shall be necessary in order that any
dividend or distribution of Common Stock or other Marketable Securities,
any subdivision, reclassi-
100
fication or combination of shares of Common Stock or other Marketable
Securities or any issuance of rights or warrants referred to above shall
not be taxable to the holders of Common Stock or other Marketable
Securities for United States Federal income tax purposes.
(e) In any case in which this Section 12.03 shall require that any
adjustment be made effective as of or retroactively immediately following a
record date, the Company may elect to defer (but only for five Trading Days
following the filing of the statement referred to in Section 12.05) issuing
to the Holder of any Securities converted after such record date the shares
of Common Stock or other Marketable Securities and other capital stock of
the Company issuable upon such conversion over and above the shares of
Common Stock or other Marketable Securities and other capital stock of the
Company issuable upon such conversion on the basis of the Conversion Price
prior to adjustment; provided, however, that the Company shall deliver to
-------- -------
such Holder a due bill or other appropriate instrument evidencing such
Holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(f) All calculations under this Section 12.03 shall be made to the
nearest cent or one-hundredth of a share or security, with one-half cent
and .005 of a share, respectively, being rounded upward. Notwithstanding
any other provision of this Section 12.03, the Company shall not be
required to make any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least 1% of such
price. Any lesser adjustment shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% in such price. Any
adjustments under this Section 12.03 shall be made successively whenever an
event requiring such an adjustment occurs.
(g) In the event that at any time, as a result of an adjustment made
pursuant to this Section 12.03, the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
stock of or other Marketable Securities of the Company other than shares of
Common Stock or Marketable
101
Securities into which the Securities originally were convertible, the
Conversion Price of such other shares or Marketable Securities so
receivable upon conversion of any such Security shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to Common Stock and
Marketable Securities contained in subparagraphs (a) through (f) of this
Section 12.03, and the provisions of Sections 12.01, 12.02 and 12.04
through 12.09 with respect to the Common Stock or other Marketable
Securities shall apply on like or similar terms to any such other shares or
Marketable Securities and the determination of the Board of Directors as to
any such adjustment shall be conclusive.
(h) No adjustment shall be made pursuant to this Section (i) if the
effect thereof would be to reduce the Conversion Price below the par value
(if any) of the Common Stock or other Marketable Security, if any, or (ii)
subject to Section 12.03(e) hereof, with respect to any Security that is
converted prior to the time such adjustment otherwise would be made.
SECTION 12.04. Consolidation or Merger of the Company. In case of
---------------------------------------
either (a) any consolidation or merger to which the Company is a party, other
than a merger or consolidation in which the Company is the surviving or
continuing corporation and which does not result in a reclassification of, or
change (other than a change in par value or from par value to no par value or
from no par value to par value, as a result of a subdivision or combination) in,
outstanding shares of Common Stock or other Marketable Securities or (b) any
sale or conveyance of all or substantially all the property and assets of the
Company to another Person, each Security then Outstanding shall be convertible
from and after such merger, consolidation, sale or conveyance of property and
assets into the kind and amount of shares of stock or other securities and
property (including cash) receivable upon such consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock or other
Marketable Securities into which such Securities would have been converted
immediately prior to such consolidation, merger, sale or conveyance, subject to
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article XII (and assuming such holder of Common
Stock or other Marketable Securities failed to exercise his rights of
102
election, if any, as to the kind or amount of securities, cash or other property
(including cash) receivable upon such consolidation, merger, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
(including cash) receivable upon such consolidation, merger, sale or conveyance
is not the same for each nonelecting share, the kind and amount of securities,
cash or other property (including cash) receivable upon such consolidation,
merger, sale or conveyance for each nonelecting share shall be deemed to be the
kind and amount so receivable per share by a plurality of the nonelecting shares
or securities)). The Company shall not enter into any of the transactions
referred to in clause (a) or (b) of the preceding sentence unless effective
provision shall be made so as to give effect to the provisions set forth in this
Section 12.04. The provisions of this Section 12.04 shall apply similarly to
successive consolidations, mergers, sales or conveyances.
SECTION 12.05. Notice of Adjustment. Whenever an adjustment in the
---------------------
Conversion Price with respect to a series of Securities is required:
(a) the Company shall forthwith place on file with the Trustee and any
Conversion Agent for such Securities a certificate of the Treasurer of the
Company, stating the adjusted Conversion Price determined as provided
herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment, such certificate to be conclusive evidence that the adjustment
is correct; and
(b) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be mailed,
first-class postage prepaid, by the Company to the Holders of record of
such Outstanding Securities.
SECTION 12.06. Notice in Certain Events. In case:
-------------------------
(a) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required or of the
sale or conveyance to another person or entity or group of persons or
entities acting in concert as a partnership, limited partnership, syndicate
or other group (within
103
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of all
or substantially all the property and assets of the Company;
(b) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(c) of any action triggering an adjustment of the Conversion Price
pursuant to this Article XII;
the Company shall cause to be filed with the Trustee and the Conversion Agent
for the applicable securities, and shall cause to be mailed, first-class postage
prepaid, to the Holders of record of applicable Securities, at least 15 days
prior to the applicable date hereinafter specified, a notice stating (i) the
date on which a record is to be taken for the purpose of any distribution or
grant of rights or warrants triggering an adjustment to the Conversion Price
pursuant to this Article XII or, if a record is not to be taken, the date as of
which the holders of record of Common Stock or other Marketable Securities
entitled to such distribution, rights or warrants are to be determined or (ii)
the date on which any reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding up triggering an adjustment to the
Conversion Price pursuant to this Article XII is expected to become effective,
and the date as of which it is expected that holders of Common Stock or other
Marketable Securities of record shall be entitled to exchange their Common Stock
or other Marketable Securities for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (a), (b) or (c) of
this Section.
SECTION 12.07. Company To Reserve Stock or Other Marketable
--------------------------------------------
Securities; Registration; Listing. (a) The Company shall at all times reserve
- ----------------------------------
and keep available, free from preemptive rights, out of its authorized but
unissued shares of Common Stock or other Marketable Securities, for the purpose
of effecting the conversion of the Securities, such number of its duly
authorized shares of Common Stock or number or principal amount of other
Marketable Securities as shall from time to time be sufficient to effect the
conversion of all applicable outstanding Securities into such
104
Common Stock or other Marketable Securities at any time (assuming that, at the
time of the computation of such number of shares or securities, all such
Securities would be held by a single Holder); provided, however, that nothing
-------- -------
contained herein shall preclude the Company from satisfying its obligations in
respect of the conversion of the Securities by delivery of purchased shares of
Common Stock or other Marketable Securities which are held in the treasury of
the Company. The Company shall from time to time, in accordance with the laws
of the State of Delaware, use its best efforts to cause the authorized amount of
the Common Stock or other Marketable Securities to be increased if the aggregate
of the authorized amount of the Common Stock or other Marketable Securities
remaining unissued and the issued shares of such Common Stock or other
Marketable Securities in its treasury (other than any such shares reserved for
issuance in any other connection) shall not be sufficient to permit the
conversion of all Securities.
(b) If any shares of Common Stock or other Marketable Securities
which would be issuable upon conversion of Securities hereunder require
registration with or approval of any governmental authority before such shares
or securities may be issued upon such conversion, the Company will in good faith
and as expeditiously as possible endeavor to cause such shares or securities to
be duly registered or approved, as the case may be. The Company will endeavor
to list the shares of Common Stock or other Marketable Securities required to be
delivered upon conversion of the Securities prior to such delivery upon the
principal national securities exchange upon which the outstanding Common Stock
or other Marketable Securities are listed at the time of such delivery.
SECTION 12.08. Taxes on Conversion. The Company shall pay any and
--------------------
all documentary, stamp or similar issue or transfer taxes that may be payable in
respect of the issue or delivery of shares of Common Stock or other Marketable
Securities on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
Marketable Securities or the portion, if any, of the Securities which is not so
converted in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Company the
105
amount of such tax or has established to the satisfaction of the Company that
such tax has been paid.
SECTION 12.09. Conversion After Record Date. If any Securities are
-----------------------------
surrendered for conversion subsequent to the record date preceding an Interest
Payment Date but on or prior to such Interest Payment Date (except Securities
called for redemption on a Redemption Date between such record date and Interest
Payment Date), the Holder of such Securities at the close of business on such
record date shall be entitled to receive the interest payable on such Securities
on such Interest Payment Date notwithstanding the conversion thereof.
Securities surrendered for conversion during the period from the close of
business on any record date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date shall (except in the case of
Securities 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 Securities being surrendered for conversion.
Except as provided in this Section 12.09, no adjustments in respect of payments
of interest on Securities surrendered for conversion or any dividends or
distributions or interest on the Common Stock or other Marketable Securities
issued upon conversion shall be made upon the conversion of any Securities.
SECTION 12.10. Corporate Action Regarding Par Value of Common Stock.
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Before taking any action which would cause an adjustment reducing the applicable
Conversion Price below the then par value (if any) of the shares of Common Stock
or other Marketable Securities deliverable upon conversion of the Securities,
the Company will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock or other Marketable
Securities at such adjusted Conversion Price.
SECTION 12.11. Company Determination Final. Any determination that
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the Company or the Board of Directors must make pursuant to this Article is
conclusive.
SECTION 12.12. Trustee's Disclaimer. The Trustee has no duty to
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determine when an adjustment under this Article should be made, how it should be
made or what it should be. The Trustee makes no representation as to the
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validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure to
comply with this Article. Each Conversion Agent other than the Company shall
have the same protection under this Section as the Trustee.
ARTICLE XIII
Subordination
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SECTION 13.01. Agreement To Subordinate. The Company agrees, and
-------------------------
each Securityholder by accepting a Security agrees, that the indebtedness
evidenced by the Securities and the payment of the principal of (and premium, if
any) and interest on each and all of the Securities is hereby expressly
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full in cash or cash equivalents of all
Senior Indebtedness and that such subordination is for the benefit of the
holders of Senior Indebtedness.
SECTION 13.02. Liquidation, Dissolution, Bankruptcy. Upon any
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payment or distribution of all or substantially all the assets of the Company,
whether voluntary or involuntary, or upon any reorganization, readjustment,
arrangement or similar proceeding relating to the Company or its property,
whether or not the Company is a party thereto and whether in bankruptcy,
insolvency, receivership or similar proceedings, or upon any assignment by the
Company for the benefit of creditors or upon any other marshaling of the assets
and liabilities of the Company:
(a) all Senior Indebtedness shall first be paid in full in cash or
cash equivalents, or provisions made for such payment by deposit thereof in
trust with a bank or banks (either theretofore acting as trustees under
indentures pursuant to which Senior Indebtedness shall have been issued or
duly appointed paying agents for the purpose), before any payment or
distribution, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinate, at
least to the extent provided in this Article with respect to the
Securities, to the payment of all indebtedness of the
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nature of Senior Indebtedness, so long as the rights of the holders of the
Senior Indebtedness are not altered adversely by such reorganization or
readjustment ("Equivalent Securities")), is made on account of the
principal of or interest on the indebtedness evidenced by the Securities;
(b) any payment or distribution of any kind or character in respect of
the principal of or interest on the Securities, whether in cash, property
or securities (other than Equivalent Securities), to which the Holders of
the Securities would be entitled except for the provisions of this Article
shall be paid or delivered by the Company or the liquidating trustee or
agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or other trustee
or agent, directly and ratably to the holders of Senior Indebtedness or
their Representatives (subject to any subordination of any class of Senior
Indebtedness, by the provisions thereof, to any other class or classes of
Senior Indebtedness), ratably according to the aggregate amounts remaining
unpaid on account of the principal of, and the premium, if any, and
interest on, the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of such Senior
Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of any kind or character in respect of the principal of or
interest on the Securities, whether in cash, property or securities (other
than Equivalent Securities), shall be received by the Trustee or the
holders of the Securities before all Senior Indebtedness is paid in full,
or provision made as aforesaid for its payment, such payment or
distribution shall be held in trust for the ratable benefit of and shall be
ratably paid over or delivered to the holders of Senior Indebtedness
remaining unpaid or unprovided for or their Representatives, as provided in
the foregoing subparagraph (b), for application to the payment of all
principal of, and premium, if any, and interest on, such Senior
Indebtedness remaining unpaid until all such Senior Indebtedness shall have
been paid in full, after giving effect to any concur-
108
rent payment or distribution, or provision therefor, to the holders of such
Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness or
provisions being made as aforesaid for its payment, the Holders of the
Securities shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company payable or distributable to the holders of the Senior
Indebtedness, until the principal of and interest on the Securities shall be
paid in full. No payment or distribution to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities would be entitled except for the provisions of this Article, and no
payment over or delivery pursuant to the provisions of this Article to the
holders of the Senior Indebtedness or their Representatives by the Trustee or
the Holders of the Securities, shall, as between the Company, its creditors
other than the holders of Senior Indebtedness and the Holders of the Securities,
be deemed to be a payment by the Company to or on account of the Senior
Indebtedness. Upon any distribution of assets or securities of the Company
referred to in this Article, the Trustee, subject to the provisions of Article
VI, and the Holders of the Securities shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending or a
certificate of the liquidating trustee or agent or other person making any
payment or distribution to the Trustee or to the Holders of the Securities for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 13.03. Default on Senior Indebtedness. Subject to the
-------------------------------
provisions of Section 13.04 hereof, in the event and during the continuation of
any default in the payment of principal of, or premium, if any, or interest on,
or other monetary obligation with respect to, any Senior indebtedness beyond any
applicable period of grace, or in the event that any event of default with
respect to any Senior Indebtedness shall have occurred and be continuing, unless
and until such default or event of default shall have been cured or waived or
shall have ceased to exist, no payment of principal or interest shall be made by
the
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Company on the Securities. Nothing contained in this Article or elsewhere in
this Indenture, or in any of the Securities, shall, however, (a) prevent the
Company from setting aside in trust as provided in Section 10.03 or depositing
with the Trustee, at any time, except during the pendency of any of the
proceedings or upon the happening of any of the events referred to in the first
paragraph of Section 13.02 or during the continuation of any such default or
event of default (not cured or waived), moneys for the payment of principal of
or interest on the Securities or (b) prevent the application by the Trustee of
any moneys deposited with it hereunder by the Company to the payment of or on
account of the principal of or interest on the Securities, if, at the time of
such deposit, the Trustee did not have written notice of any event prohibiting
the making of such deposit by the Company.
The Company shall give prompt written notice to the Trustee of any
facts which would prohibit the making of any payment of moneys to or by the
Trustee, including any dissolution, winding up, liquidation or reorganization of
the Company within the meaning of this Article. Anything in this Article or
elsewhere in this Indenture contained to the contrary notwithstanding, the
Trustee shall not be charged with knowledge of the existence of any Senior
Indebtedness or of any default or event of default with respect to any Senior
Indebtedness or of any other facts which would prohibit the making of any
payment of moneys to or by the Trustee, unless and until the Trustee shall have
received notice in writing to that effect signed by an officer of the Company or
by a holder of Senior Indebtedness who shall have been certified by the Company
or otherwise established to the reasonable satisfaction of the Trustee to be
such holder or by a Representative of Senior Indebtedness.
SECTION 13.04. Disputes with Holders of Certain Senior Indebtedness.
-----------------------------------------------------
Any failure by the Company to make any payment on or perform any other
obligation under Senior Indebtedness, other than any indebtedness incurred by
the Company or assumed or guaranteed, directly or indirectly, by the Company for
money borrowed (or any deferral, renewal, extension or refunding thereof) or any
indebtedness or obligation in which the provisions of this Section shall have
been waived by the Company in the instrument or instruments by which the Company
incurred, assumed, guaranteed or otherwise created such indebtedness or
obligation, shall not be deemed a default or event of default under Section
13.03 hereof for so long as (a) the
110
Company shall be disputing its obligation to make such payment or perform such
obligation and (b) either (i) such dispute shall not have resulted in a judgment
against the Company or the applicable Subsidiary that shall have remained
undischarged or unbonded and have remained in force for more than the applicable
appeal period or (ii) in the event of such a judgment, the Company or the
applicable Subsidiary shall in good faith be prosecuting an appeal or other
proceeding for review and which a stay of execution shall have been obtained
pending such appeal or review.
SECTION 13.05. Acceleration of Notes. If an Event of Default, other
----------------------
than an Event of Default under paragraph (e) or (f) of Section 5.01, shall have
occurred and be continuing, the Trustee or the Holder of Securities electing to
accelerate the Securities pursuant to Section 5.02 shall give the
Representatives of the Senior Indebtedness five days' prior written notice
before accelerating the Securities, which notice shall state that it is a
"Notice of Intent to Accelerate"; provided, however, that the Trustee or such
-------- -------
Holders may so accelerate the Securities immediately without such notice if at
such time payment of any Senior Indebtedness shall have been accelerated. If
payment of the Securities is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Indebtedness (or their
Representatives) of the acceleration.
SECTION 13.06. When Distribution Must Be Paid Over. If a
------------------------------------
distribution is made to Securityholders that because of this Article should not
have been made to them, the Securityholders who receive the distribution shall
hold it in trust for holders of Senior Indebtedness and pay it over to them as
their interests may appear.
SECTION 13.07. Relative Rights. This Article defines the relative
----------------
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(a) impair, as between the Company and Securityholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and interest on the Securities in accordance with their terms;
(b) affect the relative rights of Securityholders and creditors of the
Company other than holders of Senior Indebtedness; or
111
(c) prevent the Trustee or any Securityholder from exercising its available
remedies upon an Event of Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still an Event of
Default.
SECTION 13.08. Subordination May Not Be Impaired by Company. No
---------------------------------------------
right of any holder of Senior Indebtedness to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 13.09. Distribution or Notice to Representative. Whenever a
-----------------------------------------
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative.
SECTION 13.10. Rights of Trustee and Paying Agent. The Trustee or
-----------------------------------
Paying Agent may continue to make payments on the Securities until it receives
notice satisfactory to it that payments may not be made under this Article. The
Company, a Representative or a holder of Senior Indebtedness who shall have been
certified by the Company or otherwise established to the reasonable satisfaction
of the Trustee to be such holder may give the notice; provided, however, that if
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an issue of Senior Indebtedness has a Representative, only the Representative
may give the notice on behalf of the holders of Senior Indebtedness.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Security Registrar, the Paying Agent and the Conversion Agent may do the same
with like rights.
SECTION 13.11. Notice to Trustee. The Company shall give prompt
------------------
written notice to a Trust Officer at the address of the Trustee determined
pursuant to Section 1.05 of any fact known to the Company which would prohibit
the making of any payment to or by the Trustee in respect of the Securities.
112
SECTION 13.12. Trustee Not a Fiduciary. The Trustee shall not be
------------------------
deemed to owe any fiduciary duty to the holders of Senior Indebtedness, but
shall have only such obligations to such holders as are expressly set forth in
this Article XIII.
SECTION 13.13. Effectuation of Subordination by Trustee. Each holder
-----------------------------------------
of Securities, by his acceptance hereof, authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 13.14. Article Applicable to Paying Agents. In case at any
------------------------------------
time any Paying Agent other than the Trustee and the Company shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context shall require
otherwise) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.
SECTION 13.15. Trustee; Compensation Not Prejudiced. Nothing in this
-------------------------------------
Article shall apply to claims of, or payments to, the Trustee pursuant to
Section 6.07.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
TIME WARNER INC.,
by _________________________
Name:
Title:
Attest:
_______________________
Name:
Title:
113
CHEMICAL BANK,
as Trustee,
by _________________________
Name:
Title:
Attest:
_______________________
Name:
Title: