<PAGE> 1
As filed with the Securities and Exchange Commission on July 19, 1996
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WELLPOINT HEALTH NETWORKS INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-3760-980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21555 OXNARD STREET
WOODLAND HILLS, CALIFORNIA 91367
(818) 703-4000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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THOMAS C. GEISER, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
WELLPOINT HEALTH NETWORKS INC.
21555 OXNARD STREET
WOODLAND HILLS, CALIFORNIA 91367
(818) 703-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
WILLIAM L. HUDSON, ESQ. WINTHROP B. CONRAD, JR., ESQ.
DOUGLAS D. SMITH, ESQ. JOHN J. MCCARTHY, JR., ESQ.
BROBECK, PHLEGER & HARRISON LLP DAVIS POLK & WARDWELL
ONE MARKET 450 LEXINGTON AVENUE
SAN FRANCISCO, CALIFORNIA 94105 NEW YORK, NEW YORK 10017
(415) 442-0900 (212) 450-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. /X/
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AGGREGATE AMOUNT OF REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) AGGREGATE PRICE PER UNIT OFFERING PRICE(2)(3) FEE(4)
<S> <C> <C> <C> <C>
Debt Securities and Warrants to
Purchase Debt Securities $1,000,000,000 100% $1,000,000,000 $344,828
===================================================================================================================================
</TABLE>
(1) In United States dollars or the equivalent thereof in foreign currency or
currency units.
(2) Estimated in accordance with Rule 457 solely for the purpose of computing
the registration fee.
(3) Such amount represents the principal amount of any Debt Securities issued
at their principal amount, the issue price rather than the principal
amount of any Debt Securities issued as an original issue discount, the
issue price of any Debt Warrants, and the exercise price of any Debt
Securities issuable upon the exercise of Debt Warrants. Debt Warrants may
be sold separately or with Debt Securities or other Debt Warrants. It is
not practicable to determine the number of Debt Warrants and the proposed
maximum offering price thereof at this time.
(4) Pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act"), which permits the registration fee to be calculated on
the basis of the maximum offering price of all the securities listed, the
table does not specify by each class information as to the amount to be
registered, proposed maximum offering price per unit or proposed maximum
aggregate offering price.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 19, 1996
PROSPECTUS
$1,000,000,000
WELLPOINT HEALTH NETWORKS INC.
WellPoint Health Networks Inc., a California corporation (the "Company"
or "WellPoint"), may from time to time offer in one or more series (i) unsecured
debt securities ("Debt Securities"), which may be senior debt securities
("Senior Debt Securities") or subordinated debt securities ("Subordinated Debt
Securities"), and (ii) warrants to purchase Debt Securities ("Debt Warrants"),
with an aggregate public offering price of up to $1,000,000,000, on terms to be
determined at the time or times of offering. The Debt Securities and Debt
Warrants (collectively referred to herein as the "Offered Securities") may be
offered, separately or together, in separate classes or series, in amounts, at
prices and on terms to be set forth in one or more supplements to this
Prospectus (each, a "Prospectus Supplement").
All specific terms of the offering and sale of the Offered Securities
in respect of which this Prospectus is being delivered will be set forth in the
applicable Prospectus Supplement and will include, when applicable: (i) in the
case of Debt Securities, the specific title, aggregate principal amount, ranking
as Senior Debt Securities or as Subordinated Debt Securities, currency, form
(which may be registered or bearer or certificated or global), authorized
denominations, maturity, rate (or manner of calculation thereof) and time of
payment of interest, if any, terms for redemption at the option of the Company
or repayment at the option of the holder thereof, terms for sinking fund
payments, and any public offering price and (ii) in the case of Debt Warrants, a
description of the Debt Securities for which each warrant will be exercisable
and the duration, offering price, exercise price and detachability features.
The applicable Prospectus Supplement will also contain information,
when applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by that Prospectus Supplement.
The Offered Securities may be offered directly, through agents
designated from time to time by the Company, or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Offered Securities, their names and any applicable purchase price, fee,
commission or discount arrangement between or among them will be set forth in or
will be calculable from the information set forth in the applicable Prospectus
Supplement. No Offered Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of those
Offered Securities. See "Plan of Distribution" for possible indemnification
arrangements with underwriters, dealers and agents.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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This Prospectus may not be used to consummate sales of the Offered Securities
unless accompanied by a Prospectus Supplement.
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July , 1996
<PAGE> 3
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR AN
APPLICABLE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS AND ANY APPLICABLE
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THEREOF.
IN CONNECTION WITH THIS OFFERING, UNDERWRITERS, IF ANY, MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE
OFFERED SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZATION, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at Seven World Trade Center, 13th Floor, New York, New York 10048 and Citicorp
Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of
such material can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, reports, proxy statements and other information concerning
the Company may be inspected and copied at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, the Chicago Stock
Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, and the Pacific
Stock Exchange, Inc., 301 Pine Street, San Francisco, California 94104 or 618
South Spring Street, Los Angeles, California 90014.
The Company has filed with the Commission a registration statement
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), which relates to the Offered Securities (the
"Registration Statement"). This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto as permitted by the rules and regulations of the Commission.
For information with respect to the Company and the Offered Securities,
reference is hereby made to such Registration Statement, exhibits and schedules.
The Registration Statement may be inspected without charge by anyone at the
office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of all or any part thereof may be obtained from the Commission upon
payment of the prescribed fees. Statements contained in this Prospectus as to
the contents of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in all respects by such reference.
<PAGE> 4
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of WellPoint Health Networks Inc., a Delaware
corporation ("Old WellPoint"), filed with the Commission are incorporated herein
by reference:
(i) Annual Report of Old WellPoint on Form 10-K (File No.
1-11628) for the year ended December 31, 1995;
(ii) Old WellPoint's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996;
(iii) Old WellPoint's Current Reports on Form 8-K filed April
12, 1996, March 8, 1996, February 26, 1996 and January 9, 1996.
The following documents of the Company filed with the Commission (File
No. 1-14340) are incorporated herein by reference: the Company's Current Report
on Form 8-K filed June 3, 1996 and Amendment No. 1 on Form 8-K/A filed June 24,
1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Offered Securities shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein (or in the applicable Prospectus
Supplement) or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge to any person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any document incorporated by reference herein other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such document. Requests should be directed to 21555 Oxnard Street,
Woodland Hills, California 91367 (telephone number: (818) 703-4000) Attention:
Secretary.
3.
<PAGE> 5
THE COMPANY
GENERAL
WellPoint Health Networks Inc. is one of the nation's largest publicly
traded managed health care companies with approximately 4.0 million medical
members, 12.0 million pharmacy members, 1.5 million dental members and 1.2
million life insurance members. The Company offers a comprehensive array of
managed care health plans through a health maintenance organization ("HMO"), a
preferred provider organization ("PPO") and specialty managed care networks.
WellPoint also provides claims processing, administrative and cost containment
services to self-funded employers. The Company also offers workers' compensation
and life insurance products. The Company's primary market for all of the
products it offers, excluding pharmacy managed care services, is the state of
California.
The Company is actively pursuing expansion into new markets outside of
California. With the acquisitions of AHI Healthcare Corporation "AHI") and
UniCARE Life and Health Insurance Co. ("UL&H"), formally the Life and Health
Benefits Management Division of Massachusetts Mutual Life Insurance Company,
WellPoint serves medical members in 50 states. Due in part to these
acquisitions, the Company's internal business units are now organized on a
geographic basis, California and National. These business units target both
individual and small business purchasers with up to 50 employees and large
employers with 51 or more employees. The Company's networks and broad range of
specialty managed care products allow it to pursue growth with each of
individual, small business and large business purchasers.
The Company is a corporation organized under the laws of the State of
California. As used in this Prospectus, "Wellpoint" or the "Company" refers to
Wellpoint Health Networks, Inc. and its predecessors, unless otherwise indicated
by the context. The Company's principal executive offices are located at 21555
Oxnard Street, Woodland Hills, California 91367 (telephone number: (818)
703-4000).
RECENT DEVELOPMENTS -- COMPLETION OF RECAPITALIZATION TRANSACTIONS
On May 20, 1996, the Company concluded a series of transactions to
recapitalize its publicly traded majority-owned subsidiary, WellPoint Health
Networks, Inc., a Delaware corporation ("Old WellPoint"), pursuant to the
Amended and Restated Recapitalization Agreement dated as of March 31, 1995 (the
"Amended Recapitalization Agreement"), by and among the Company, Old WellPoint
and two newly formed California nonprofit foundations, Western Health
Partnerships (the "Health Foundation") and Western Foundation for Health
Improvement (the "Western Foundation"). Pursuant to the Amended Recapitalization
Agreement, (a) Old WellPoint distributed an aggregate of $995.0 million by means
of a special dividend of $10.00 per share to the holders of its common stock,
and the Company, as a California nonprofit public benefit corporation, thereupon
immediately donated its portion thereof ($800.0 million) to the Western
Foundation; (b) the Company then donated its assets, other than the Company's
Old WellPoint Class B Common Stock and the Company's commercial operations (the
"Commercial Operations"), to the Health Foundation; (c) the Company then changed
its status to a California for-profit business corporation by means of filing
Amended and Restated Articles of Incorporation with the California Secretary of
State and issued to the Health Foundation 53,360,000 shares of Common Stock; and
(d) Old Wellpoint then merged with and into the Company (the "Merger"), and the
Company changed its name to WellPoint Health Networks Inc. (collectively, the
"Recapitalization"). In the Merger, (i) each outstanding share of Old WellPoint
Class A Common Stock was converted into 0.667 shares of the Company's Common
Stock, and (ii) the outstanding shares of the Company's Common Stock held by the
Health Foundation prior to the merger were converted into 53,360,000 shares of
the post-Merger Company's Common Stock and a cash payment of $235 million to
reflect the value of the Commercial Operations. The Company's Common Stock is
entitled to one vote per share, and as a result of the Recapitalization, the 10
to 1 voting rights of Old WellPoint's Class B Common Stock have been eliminated.
4.
<PAGE> 6
In connection with the Recapitalization, the Blue Cross/Blue Shield
Association has entered into a new license agreement with the Company, which
makes the Company the exclusive licensee of the right to use the Blue Cross name
and related service marks in California. Unless the context otherwise requires,
all information herein gives effect to the Merger or Recapitalization.
USE OF PROCEEDS
On May 16, 1996, the Company paid a cash dividend totaling $995,000,000
to the holders of Old WellPoint's Class A and Class B Common Stock, which was
funded by the incurrence of debt under a new unsecured credit facility. The
Company intends to repay a portion of this indebtedness through the issuance of
the Offered Securities. Unless otherwise disclosed in the accompanying
Prospectus Supplement, the Company intends to use any remaining net proceeds
from the sale of the Offered Securities for general corporate purposes, which
may include the repayment of existing indebtedness, the financing of capital
expenditures and acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
of the Company for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
- ------------------------------------------------------------------------------------ ----------------------------------------
1995 1994 1993 1992 1991 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
49.8 61.7 68.9 71.5 62.2 92.8 63.4
</TABLE>
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For purposes of computing the ratios of earnings to fixed charges for
the Company and its subsidiaries, earnings have been calculated by adding fixed
charges to income before income taxes. Fixed charges consist of gross interest
expense and that portion of rent expense (one-third) deemed representative of
the interest factor in such rent expense.
5.
<PAGE> 7
DESCRIPTION OF THE DEBT SECURITIES
The Senior Debt Securities will be issued under a proposed Indenture as
amended or supplemented from time to time (the "Senior Indenture"), between the
Company and The Bank of New York, as trustee (the "Trustee"). The Subordinated
Debt Securities will be issued under a proposed Indenture as amended or
supplemented from time to time (the "Subordinated Indenture"), between the
Company and a trustee to be named in any Prospectus Supplement relating to
Subordinated Debt Securities. The Senior Indenture and the Subordinated
Indenture are sometimes referred to herein collectively as the "Indentures" and
each individually as an "Indenture."
The forms of the Indentures have been filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the Senior
Indenture is available for inspection at the principal corporate trust office of
the Trustee at 101 Barclay Street, 21 West, New York, New York 10286. The
Indentures are subject to, and are governed by, the Trust Indenture Act of 1939,
as amended. The statements made hereunder relating to the Indentures and the
Debt Securities to be issued hereunder are summaries of certain provisions
thereof and do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all provisions of the Indentures and such
Debt Securities. All section references appearing in this section "Description
of the Debt Securities" are to sections of the applicable Indenture, and
capitalized terms used but not defined herein shall have the respective meanings
set forth in the applicable Indenture.
GENERAL
The Indentures do not limit the amount of Debt Securities that can be
issued thereunder and provide that Debt Securities of any series may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The Indentures do not limit the amount of other
indebtedness or securities that may be issued by the Company or its
subsidiaries.
The Debt Securities will be direct, unsecured obligations of the
Company and will constitute Senior Debt Securities or Subordinated Debt
Securities. Creditors of the Company's subsidiaries are entitled to a claim on
the assets of such subsidiaries. Consequently, in the event of a liquidation or
reorganization of any subsidiary, creditors of the subsidiary are likely to be
paid in full before any distribution is made to the Company and holders of Debt
Securities, except to the extent that the Company is itself recognized as a
creditor of such subsidiary, in which case the claims of the Company would still
be subordinate to any security interests in the assets of such subsidiary and
any indebtedness of such subsidiary senior to that held by the Company.
Reference is made to the Prospectus Supplement for the following and
other possible terms of each series of the Debt Securities in respect of which
this Prospectus is being delivered: (i) the title of the Debt Securities; (ii)
any limit upon the aggregate principal amount of the Debt Securities; (iii) if
other than 100% of the principal amount, the percentage of their principal
amount at which the Debt Securities will be offered; (iv) the date or dates on
which the principal of the Debt Securities will be payable (or method of
determination thereof); (v) the rate or rates (or method of determination
thereof) at which the Debt Securities will bear interest, if any, the date or
dates from which any such interest will accrue and on which such interest will
be payable, and the record dates for the determination of the holders to whom
interest is payable; (vi) if other than as set forth herein, the place or places
where the principal of and interest, if any, on the Debt Securities will be
payable; (vii) the price or prices at which, the period or periods within which
and the terms and conditions upon which Debt Securities may be redeemed, in
whole or in part, at the option of the Company; (viii) if other than the
principal amount thereof, the portion of the principal amount of the Debt
Securities payable upon declaration of acceleration of the maturity thereof;
(ix) the obligation, if any, of the Company to redeem, repurchase or repay Debt
Securities, whether pursuant to any sinking fund or analogous provisions or
pursuant to other provisions set forth therein or at the option of a Holder
thereof; (x) whether the Debt Securities will be represented in whole or in part
by one or more global notes registered in the names of a depository or its
nominee; (xi) the ranking of such Debt Securities as Senior Debt Securities or
6.
<PAGE> 8
Subordinated Debt Securities; and (xii) any other terms or conditions not
inconsistent with the provisions of the Indenture under which the Debt
Securities will be issued. (Section 2.3) "Principal" when used herein includes,
when appropriate, the premium, if any, on the Debt Securities.
Unless otherwise provided in the Prospectus Supplement relating to any
Debt Securities, principal and interest, if any, will be payable, and the Debt
Securities will be transferable, at the office or offices or agency maintained
by the Company for such purposes, provided that payment of interest on the Debt
Securities will be paid at such place of payment by check mailed to the persons
entitled thereto at the addresses of such persons appearing on the security
register. Interest on the Debt Securities will be payable on any interest
payment date to the persons in whose name the Debt Securities are registered at
the close of business on the record date with respect to such interest payment
date.
The Debt Securities may be issued only in fully registered form in
minimum denominations of $1,000 and any integral multiple thereof. Additionally,
the Debt Securities may be represented in whole or in part by one or more global
notes registered in the name of a depository or its nominee and, if so
represented, interests in such global note will be shown on, and transfers
thereof will be effected only through, records maintained by the designated
depository and its participants.
The Debt Securities may be exchanged for an equal aggregate principal
amount of Debt Securities of the same series and date of maturity in such
authorized denominations as may be requested upon surrender of the Debt
Securities at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of such agent. No service charge will be
made for any transfer or exchange of the Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 2.8)
The Indentures require the annual filing by the Company with the
Trustee of a certificate as to compliance with certain covenants contained in
the Indentures. (Section 3.4)
The Company will comply with Section 14(e) under the Exchange Act, to
the extent applicable, and any other tender offer rules under the Exchange Act
which may then be applicable, in connection with any obligation of the Company
to purchase Debt Securities at the option of the holders thereof. Any such
obligation applicable to a series of Debt Securities will be described in the
Prospectus Supplement relating thereto.
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets. These risks will vary
depending upon the currency or currencies involved and will be more fully
described in the Prospectus Supplement relating thereto.
Unless otherwise described in a Prospectus Supplement relating to any
Debt Securities, there are no covenants or provisions contained in the
Indentures which may afford the holders of Debt Securities protection in the
event of a highly leveraged transaction involving the Company.
LIMITATION ON LIENS
The Senior Indenture provides that the Company will not, and will not
permit any Subsidiary to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any Property of the Company or
such Subsidiary or any interest therein or any income or profits therefrom,
unless the Notes are secured equally and ratably with (or prior to) any and all
other indebtedness secured by such Lien, except for (i) any Lien arising in the
ordinary course of business, other than in connection with indebtedness for
borrowed money; (ii) any Lien on Property acquired by the Company or any
Subsidiary after the date of issuance of the Notes, provided that such
7.
<PAGE> 9
Lien existed on the date such Property was acquired; (iii) any Lien existing on
the date of the Indenture; (iv) any Lien securing indebtedness incurred to
finance the purchase price or cost of construction of Property (or additions,
substantial repairs, alterations or substantial improvements thereto), provided
that such Lien and the indebtedness secured thereby are incurred within one year
of the later of acquisition or completion of construction (or addition, repair,
alteration or improvement) and full operation thereof; (v) any Liens arising out
of judgments or awards against the Company or any Subsidiary having an
outstanding principal amount which do not exceed $20 million in the aggregate or
with respect to which the Company or such Subsidiary shall in good faith be
prosecuting an appeal or proceedings for review, Liens which are discharged
within 60 days of entry of judgment or Liens incurred by the Company or a
Subsidiary for the purpose of obtaining a stay or discharge in the course of any
legal proceeding to which the Company or such subsidiary is a party; (vi) any
Lien for taxes not yet due and payable by the Company or any Subsidiary or which
the Company or such Subsidiary is contesting in good faith; (vii) any Lien on or
with respect to Property of a Subsidiary in favor of the Company or another
Subsidiary; (viii) short term repurchase agreements covering portfolio
securities; (ix) any Lien securing indebtedness in respect of Capital Leases on
the Property subject to such Capital Leases; (x) deposit reserves or contingent
payment arrangements required under or pursuant to any applicable provisions of
federal, state or local rules, regulations or ordinances regarding health
maintenance organizations, providers of life, health care or disability
insurance or the provision of health care services or such insurance or the
management of health services or securing regulatory capital or other financial
responsibility requirements; (xi) any Lien (other than a Lien permitted under
any of clauses (i) through (x) of this paragraph) securing indebtedness of the
Company or of any Subsidiary provided that the aggregate principal amount of all
Secured Debt together with all Attributable Debt of the Company and its
Subsidiaries in respect of Sale and Lease-Back Transactions may not exceed 15%
of Consolidated Net Tangible Assets of the Company and its Subsidiaries; (xii)
any Lien extending, renewing or replacing any Lien permitted by clauses (i)
through (xi) above; and (xiii) any Lien securing indebtedness the proceeds of
which are deposited, promptly upon receipt, with the Trustee solely for the
purpose of effecting a legal defeasance or covenant defeasance as set forth
under "Satisfaction and Discharge of Indenture" and "Defeasance."
In the case of Liens permitted under clauses (ii) and (iv) above, such
Liens may not relate to any Property of the Company or a Subsidiary other than
the Property so acquired, constructed, added, repaired, altered or improved, as
the case may be. In the case of Liens permitted under clause (xii), unless such
Liens are otherwise permitted under clause (xi), such Liens (A) may not relate
to any Property of the Company or a Subsidiary other than the Property to which
the Lien being extended, renewed or replaced relates to, and (B) may not secure
indebtedness in excess of that secured by the Lien being extended, renewed or
replaced.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
The Senior Indenture provides that, as of the date of the Indenture,
the Company will not, nor will it permit any Subsidiary to, directly or
indirectly, enter into, assume, guarantee, or otherwise become liable with
respect to any Sale and Lease-Back Transaction; provided, however, that the
Company or any Subsidiary may enter into (i) a Sale and Lease-Back Transaction
that, had such Sale and Lease-Back Transaction been structured as a mortgage
rather than as a Sale and Lease-Back Transaction, the Company or such Subsidiary
would have been permitted to enter into such transaction pursuant to the terms
of the Indenture described under "Limitation on Liens," (ii) a Sale and
Lease-Back Transaction between or among the Company and any of its Subsidiaries
or between or among Subsidiaries, (iii) a Sale and Lease-Back Transaction
entered into prior to the date of issuance of the Notes, (iv) a Sale and
Lease-Back Transaction, provided that within 180 days of the effective date of
any such Sale and Lease-Back Transaction, the Company or such Subsidiary shall
apply an amount equal to the Value of such Sale and Lease-Back Transaction to
the (A) retirement (other than any mandatory retirement and other than any
prohibited retirement of securities) of indebtedness for borrowed money incurred
or assumed by the Company or any Subsidiary (other than indebtedness for
borrowed money owed to the Company or any Subsidiary) which by its terms matures
on, or is extendable or renewable at the option of the obligor to, a date more
than 12 months after the date of the creation of such indebtedness and, in the
case of such indebtedness of the Company which ranks on a parity with, or senior
in right of payment to, the Notes or (B) the purchase or construction of other
Property,
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provided that such Property is owned by the Company or a Subsidiary free and
clear of all Liens, (v) a Sale and Lease-Back Transaction involving the taking
back of a lease for a period of three years or less, or (vi) a Sale and
Lease-Back Transaction, provided that after giving effect to the Sale and
Lease-Back Transaction, the aggregate principal amount of all Secured Debt plus
Attributable Debt of the Company and its Subsidiaries in respect of Sale and
Leaseback Transactions would not exceed 15% of the Consolidated Net Tangible
Assets of the Company and its Subsidiaries.
CERTAIN DEFINITIONS
The term "Attributable Debt" means the total net amount of rent
required to be paid during the remaining term of any lease, discounted at the
weighted average rate per annum then borne by the outstanding Debt Securities.
The term "Consolidated Net Tangible Assets" means the aggregate amount
of assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any thereof
constituting Funded Debt by reason of being extendible or renewable), and (b)
all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the books and records of
the Company and its consolidated subsidiaries and computed in accordance with
generally accepted accounting principles.
The term "Property," in respect to any person, means any interest of
such person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including, without limitation, Capital Stock in any
other person.
The term "Sale and Lease-Back Transaction," means with respect to any
person, any direct or indirect arrangement pursuant to which Property is sold or
transferred by such person or a subsidiary of such person and is thereafter
leased back from the purchaser or transferee thereof by such person or one of
its subsidiaries.
The term "Subsidiary" means (i) a corporation, a majority of whose
capital stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly owned by the
Company, by one or more Subsidiaries of the Company or by the Company and one or
more Subsidiaries of the Company, (ii) a partnership, joint venture or similar
entity in which the Company, a Subsidiary of the Company or the Company and one
or more Subsidiaries of the Company, directly or indirectly, holds a majority
interest in the equity capital or profits or other similar interests of such
entity, or (iii) any other person (other than a corporation) in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such person.
The term "Value" means, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater of (i)
the net proceeds of the sale or transfer of the property leased pursuant to such
Sale and Lease-Back Transaction or (ii) the fair value in the opinion of the
Board of Directors (as evidenced by a Board Resolution) of such property at the
time of entering into such Sale and Lease-Back Transaction, in either case
divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination, without regard to any renewal or extension options contained in
the lease.
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series
is defined in the Indentures as: (i) default in the payment of any installment
of interest upon any of the Debt Securities of such series as and when the same
shall become due and payable, and continuance of such default for a period of 30
days; (ii) default in the payment of all or any part of the principal of any of
the Debt Securities of such series as and when the same shall
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become due and payable either at maturity, upon any redemption, by declaration
or otherwise; (iii) default in the performance, or breach, of any other covenant
or warranty of the Company contained in the Debt Securities of such series or
set forth in the applicable Indenture (other than a covenant or warranty
included in the applicable Indenture solely for the benefit of a series of Debt
Securities other than such series) and continuance of such default or breach for
a period of 90 days after due notice by the Trustee or by the holders of at
least 25% in principal amount of the outstanding securities of that series; (iv)
a default under any bond, debenture, note or other evidence of indebtedness of
the Company or any Subsidiary, or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness of the Company or any Subsidiary, whether such indebtedness now
exists or is hereafter created, which default involves the failure to pay
principal on indebtedness at the final maturity thereof or which has resulted in
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable in an aggregate amount in excess
of $30,000,000; or (v) certain events of bankruptcy, insolvency or
reorganization of the Company. (Section 5.1) Additional Events of Default may be
added for the benefit of holders of certain series of Debt Securities which, if
added, will be described in the Prospectus Supplement relating to such Debt
Securities. The Indentures provide that the Trustee shall notify the holders of
Debt Securities of each series of any continuing default known to the Trustee
which has occurred with respect to that series within 90 days after the
occurrence thereof. The Indentures provide that notwithstanding the foregoing,
except in the case of default in the payment of the principal of, or interest,
if any, on any of the Debt Securities of such series, the Trustee may withhold
such notice if the Trustee in good faith determines that the withholding of such
notice is in the interests of the holders of Debt Securities of such series.
(Section 6.5)
The Indentures provide that if an Event of Default with respect to any
series of Debt Securities shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in aggregate principal amount of
Debt Securities of that series then outstanding may declare the principal amount
of all Debt Securities of that series to be due and payable immediately, but
upon certain conditions such declaration may be annulled. (Section 5.1) Any past
defaults and the consequences thereof (except a default in the payment of
principal of or interest, if any, on Debt Securities of that series) may be
waived by the holders of a majority in principal amount of the Debt Securities
of that series then outstanding. (Section 5.9) The Senior Indenture also permits
the Company to omit compliance with certain covenants in such Indentures with
respect to Senior Debt Securities of any series upon waiver by the holders of a
majority in principal amount of the Senior Debt Securities of such series then
outstanding. (Section 3.5)
Subject to the provisions of the Indentures relating to the duties of
the Trustee, in case an Event of Default with respect to any series of Debt
Securities shall occur and be continuing, the Trustee shall not be under any
obligation to exercise any of the trusts or powers vested in it by the
Indentures at the request or direction of any of the holders of that series,
unless such holders shall have offered to such Trustee reasonable security or
indemnity. (Sections 6.1 and 6.2) The holders of a majority in aggregate
principal amount of the Debt Securities of each series affected and then
outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee under the
applicable Indenture or exercising any trust or power conferred on the Trustee
with respect to the Debt Securities of that series; provided that the Trustee
may refuse to follow any direction which is in conflict with any law or such
Indenture and subject to certain other limitations. (Section 5.8)
No holder of any Debt Security of any series will have any right by
virtue or by availing of any provision of the Indentures to institute any
proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to the Indentures or for any remedy thereunder, unless such holder
shall have previously given the Trustee written notice of an Event of Default
with respect to Debt Securities of that series and unless the holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
that series shall also have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee and the
Trustee shall have failed to institute such proceeding within 60 days after its
receipt of such request, and the Trustee shall not have received from the
holders of a majority in aggregate principal amount of the outstanding Debt
Securities of that series a direction inconsistent with such request. (Section
5.5) However, the right of a holder of any Debt
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Security to receive payment of the principal of and interest, if any, on such
Debt Security on or after the due dates expressed in such Debt Security, or to
institute suit for the enforcement of any such payment on or after such dates,
shall not be impaired or affected without the consent of such holder. (Section
5.6)
MERGER
Each Indenture provides that the Company may consolidate with, or sell,
convey or lease all or substantially all of its assets to, or merge with or
into, any other corporation, if (i) either the Company is the continuing
corporation or the successor corporation is a domestic corporation and expressly
assumes the due and punctual payment of the principal of and interest on all the
Debt Securities outstanding under such Indenture according to their tenor and
the due and punctual performance and observance of all of the covenants and
conditions of such Indenture to be performed or observed by the Company; and
(ii) the Company or such successor corporation, as the case may be, is not,
immediately after such merger or consolidation, or such sale, conveyance or
lease, in material default in the performance or observance of any such covenant
or condition. (Section 9.1)
SATISFACTION AND DISCHARGE OF INDENTURES
The Indenture with respect to any series of Debt Securities (except for
certain specified surviving obligations including, among other things, the
Company's obligation to pay the principal of and interest on the Debt Securities
of such series) will be discharged and cancelled upon the satisfaction of
certain conditions, including the payment of all the Debt Securities of such
series or the deposit with the Trustee under such Indenture of cash or
appropriate Government Obligations or a combination thereof sufficient for such
payment or redemption in accordance with the applicable Indenture and the terms
of the Debt Securities of such series. (Section 10.1)
MODIFICATION OF THE INDENTURES
The Indentures contain provisions permitting the Company and the
Trustee thereunder, with the consent of the holders of not less than a majority
in aggregate principal amount of the Debt Securities of each series at the time
outstanding under the applicable Indenture, to execute supplemental indentures
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, the applicable Indenture or any supplemental indenture with
respect to the Debt Securities of such series or modifying in any manner the
rights of the holders of the Debt Securities of such series; provided that no
such supplemental indenture may (i) extend the final maturity of any Debt
Security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of any interest thereon, or reduce any amount payable on
redemption thereof, or impair or affect the right of any holder of Debt
Securities to institute suit for payment thereof or, if the Debt Securities
provide therefor, any right of repayment at the option of the holders of the
Debt Securities, without the consent of the holder of each Debt Security so
affected or (ii) reduce the aforesaid percentage of Debt Securities of such
series, the consent of the holders of which is required for any such
supplemental indenture, without the consent of the holders of all Debt
Securities of such series so affected or (iii) reduce the amount of principal
payable upon acceleration of the maturity of any Original Issue Discount
Security. (Section 8.2) Additionally, in certain prescribed instances, the
Company and the Trustee may execute supplemental indentures without the consent
of the holders of Debt Securities.
(Section 8.1)
DEFEASANCE
Defeasance and Discharge. The Indentures provide, if such provision is
made applicable to the Debt Securities of any series, that the Company may elect
to terminate (and be deemed to have satisfied) all its obligations with respect
to such Debt Securities (except for the obligations to register the transfer or
exchange of such Debt Securities, to replace mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities, to compensate and indemnify the Trustee and to punctually pay or
cause to be paid the principal of, and interest, if any, on all Debt Securities
of such series when due) ("defeasance") upon the deposit
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with the Trustee, in trust for such purpose, of money and/or Government
Obligations which through the payment of principal and interest in accordance
with their terms will provide money in an amount sufficient (in the opinion of a
nationally recognized firm of independent public accountants) to pay the
principal of and premium and interest, if any, on the outstanding Debt
Securities of such series, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor. Such a trust may be established
only if, among other things, (a) the Company has delivered to the Trustee an
opinion of counsel (as specified in the applicable Indenture) with regard to
certain matters, including an opinion to the effect that the Holders of such
Debt Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject to
federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit and defeasance or covenant
defeasance, as the case may be, had not occurred, and which opinion of counsel
must be based upon (x) a ruling of the U.S. Internal Revenue Service to the same
effect or (y) a change in applicable U.S. federal income tax law after the date
of the Indenture such that a ruling is no longer required, (b) no Default or
Event of Default shall have occurred or be continuing, and (c) such deposit
shall not result in a breach or violation of, or constitute a default under, any
other material agreement or instrument to which the Company is a party or by
which the Company is bound. The Prospectus Supplement may further describe these
or other provisions, if any, permitting defeasance with respect to the Debt
Securities of any series. (Section 10.1)
Defeasance of Certain Covenants. In the case of the Senior Indentures,
unless the Prospectus Supplement relating to the Debt Securities of a series
provides otherwise, the Company at its option need not comply with certain
restrictive covenants of the Senior Indenture ("covenant defeasance") upon,
among other things, the deposit with the Trustee, in trust, of money and/or
Government Obligations that through the payment of interest and principal in
respect thereof in accordance with their terms will provide money or a
combination of money and Government Obligations in an amount sufficient to pay
in the currency in which such Debt Securities are payable all the principal of,
and interest on, such Debt Securities on the dates such payments are due in
accordance with the terms of such Debt Securities, the delivery by the Company
to the Trustee of an Opinion of Counsel to the effect that, among other things,
the holders of such Debt Securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such deposit and defeasance of
certain covenants and will be subject to U.S. federal income tax on the same
amounts and in the same manner and at the same times as would have been the case
if such deposit and defeasance had not occurred and provided no Default or Event
of Default shall have occurred or be continuing, and such deposit shall not
result in a breach or violation of, or constitute a default under, any other
material agreement or instrument to which the Company is a party or by which the
Company is bound. The Prospectus Supplement may further describe these or other
provisions, if any, permitting defeasance with respect to the Debt Securities of
any series. (Section 10.1)
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The Senior Debt Securities will constitute part of the Senior
Indebtedness (as defined below) of the Company and will rank pari passu with all
outstanding senior debt. Except as set forth in the related Prospectus
Supplement, the Subordinated Debt Securities will be subordinated, in right of
payment, to the prior payment in full of the Senior Indebtedness (as defined
below), including the Senior Debt Securities, whether outstanding at the date of
the Subordinated Indenture or thereafter incurred, assumed or guaranteed. The
term "Senior Indebtedness" means (1) the principal of and premium, if any, and
unpaid interest on indebtedness for money borrowed, (2) purchase money and
similar obligations, (3) obligations under capital leases, (4) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Company is responsible for the payment of, such indebtedness
of others, (5) renewals, extensions and refunding of any such indebtedness, (6)
interest or obligations in respect of any such indebtedness accruing after the
commencement of any insolvency or bankruptcy proceedings and (7) obligations
associated with derivative products such as interest rate and currency exchange
contracts, foreign exchange contracts, commodity contracts, and similar
arrangements, unless, in each case, the instrument by which the Company
incurred, assumed or guaranteed the indebtedness or obligations described in
clauses (1) through (7) hereof expressly provides that such indebtedness or
obligation is not senior in right of payment to the Subordinated Debt
Securities.
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Upon any distribution of assets of the Company in connection with any
dissolution, winding up, liquidation or reorganization of the Company, whether
in a bankruptcy, insolvency, reorganization or receivership proceeding or upon
an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Company or otherwise, except a distribution in
connection with a merger or consolidation or a conveyance or transfer of all or
substantially all of the properties of the Company in accordance with the
Subordinated Indenture, the holders of all Senior Indebtedness shall first be
entitled to receive payment of the full amount due thereon, or provision shall
be made for such payment in money or money's worth, before the holders of any of
the Subordinated Debt Securities are entitled to receive any payment in respect
of the Subordinated Debt Securities. In the event that a payment default shall
have occurred and be continuing with respect to the Senior Indebtedness, the
holders of all Senior Indebtedness shall first be entitled to receive payment of
the full amount due thereon, or provision shall be made for such payment in
money or money's worth, before the holders of any of the Subordinated Debt
Securities are entitled to receive any payment in respect of the Subordinated
Debt Securities. In the event that the principal of the Subordinated Debt
Securities of any series shall have been declared due and payable pursuant to
the Subordinated Indenture and such declaration shall not have been rescinded
and annulled, the holders of all Senior Indebtedness outstanding at the time of
such declaration shall first be entitled to receive payment of the full amount
due thereon, or provision shall be made for such payment in money or money's
worth, before the holders of any of the Subordinated Debt Securities are
entitled to receive any payment in respect of the Subordinated Debt Securities.
This subordination will not prevent the occurrence of any event of
default with respect to the Subordinated Debt Securities. There is no limitation
on the issuance of additional Senior Indebtedness in the Subordinated Indenture.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities (each, a "Global Security") that will
be deposited with, or on behalf of, a Debt Depository identified in the
applicable Prospectus Supplement. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless
otherwise provided in such Prospectus Supplement, Debt Securities that are
represented by a Global Security will be issued in denominations of $1,000 or
any integral multiple thereof and will be issued in registered form only,
without coupons. Payments of principal of, and interest, if any, on Debt
Securities represented by a Global Security will be made by the Company to the
Trustee under the applicable Indenture, and then forwarded to the Debt
Depository.
The Company anticipates that any Global Securities will be deposited
with, or on behalf of, The Depository Trust Company, New York, New York ("DTC"),
and that such Global Securities will be registered in the name of Cede & Co.,
DTC's nominee. The Company further anticipates that the following provisions
will apply to the depository arrangements with respect to any such Global
Securities. Any additional or differing terms of the depository arrangements
will be described in the Prospectus Supplement relating to a particular series
of Debt Securities issued in the form of Global Securities.
So long as DTC or its nominee is the registered owner of a Global
Security, DTC or its nominee, as the case may be, will be considered the sole
Holder of the Debt Securities represented by such Global Security for all
purposes under the applicable Indenture. Except as described below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt Securities in
certificated form and will not be considered the owners or Holders thereof under
the applicable Indenture. The laws of some states require that certain
purchasers of securities take physical delivery of such securities in
certificated form; accordingly, such laws may limit the transferability of
beneficial interests in a Global Security.
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If DTC is at any time unwilling or unable to continue as depository or
if at any time DTC ceases to be a clearing agency registered under the Exchange
Act if so required by applicable law or regulation, and, in either case, a
successor Debt Depository is not appointed by the Company within 90 days, the
Company will issue individual Debt Securities in certificated form in exchange
for the Global Securities. In addition, the Company may at any time, and in its
sole discretion, determine not to have any Debt Securities represented by one or
more Global Securities, and, in such event, will issue individual Debt
Securities in certificated form in exchange for the relevant Global Securities.
In any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery of individual Debt Securities in
certificated form of like tenor and rank, equal in principal amount to such
beneficial interest, and to have such Debt Securities in certificated form
registered in its name. Unless otherwise described in the applicable Prospectus
Supplement, Debt Securities so issued in certificated form will be issued in
denominations of $1,000 or any integral multiple thereof, and will be issued in
registered form only, without coupons.
DTC will act as securities depository for the Debt Securities. The Debt
Securities will be issued as fully registered securities registered in the name
of Cede & Co. (DTC's partnership nominee). One fully registered Debt Security
certificate will be issued with respect to each $200 million of principal amount
of the Debt Securities of a series, and an additional certificate will be issued
with respect to any remaining principal amount of such series.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others,
such as securities brokers and dealers, and banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt Securities
on DTC's records. The ownership interest of each actual purchaser of each Debt
Security ("Beneficial Owner") is in turn recorded on the Direct and Indirect
Participants' records. A Beneficial Owner does not receive written confirmation
from DTC of its purchase, but is expected to received a written confirmation
providing details of the transaction, as well as periodic statements of its
holdings, from the Direct or Indirect Participants through which such Beneficial
Owner entered into the action. Transfers of ownership interests in Debt
Securities are accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners. Beneficial Owners do not receive certificates
representing their ownership interests in Debt Securities, except in the event
that use of the book-entry system for the Debt Securities is discontinued.
To facilitate subsequent transfers, the Debt Securities are registered
in the name of DTC's partnership nominee, Cede & Co. The deposit of the Debt
Securities with DTC and their registration in the name of Cede & Co. will effect
no change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Debt Securities; DTC records reflect only the identity of the
Direct Participants to whose accounts Debt Securities are credited, which may or
may not be the Beneficial Owners. The Participants remain responsible for
keeping account of their holdings on behalf of their customers.
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Delivery of notice and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners are governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. consents or votes with respect to the Debt
Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus Proxy")
to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Debt Securities are credited on the record date (identified
on a list attached to the Omnibus Proxy).
Principal and interest payments, if any, on the Debt Securities are
made to DTC. DTC's practice is to credit Direct Participants' accounts on the
payment date in accordance with their respective holdings as shown on DTC's
records unless DTC has reason to believe that it will not receive payment on the
payment date. Payments by Participants to Beneficial Owners are governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street name"
and are the responsibility of such Participant and not of DTC, the Trustee or
the Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest, if any, to DTC is
the responsibility of the Company or the Trustee, disbursement of such payments
to Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository
with respect to the Debt Securities at any time by giving reasonable notice to
the Company or the Trustee. Under such circumstances, in the event that a
successor securities depository is not appointed, Debt Security certificates are
required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company believes to be reliable,
but the Company takes no responsibility for the accuracy thereof.
Unless stated otherwise in the Prospectus Supplement, the underwriters
or agents with respect to a series of Debt Securities issued as Global
Securities will be Direct Participants in DTC.
None of the Company, any underwriter or agent, the Trustee or any
applicable paying agent will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial interests
in a Global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial interest.
DESCRIPTION OF THE WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the Debt Warrants are
summaries of, and subject to, the detailed provisions of a warrant agreement
(the "Debt Warrant Agreement") to be entered into by the Company and a warrant
agent to be selected at the time of issue (the "Debt Warrant Agent"), which Debt
Warrant Agreement may include or incorporate by reference standard warrant
provisions substantially in the form of the Standard Debt Securities Warrant
Provisions (the "Debt Warrant Provisions") filed as an exhibit to the
Registration Statement.
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GENERAL
The Debt Warrants, evidenced by warrant certificates (the "Debt Warrant
Certificates"), may be issued under the Debt Warrant Agreement independently or
together with any Offered Securities offered by any Prospectus Supplement and
may be attached to or separate from such Offered Securities. If Debt Warrants
are offered, the related Prospectus Supplement will describe the terms of the
warrants, including without limitation the following: (1) the offering price, if
any; (2) the designation, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of the warrants; (3) if applicable, the
designation and terms of the Debt Securities with which the Debt Warrants are
issued and the number of Debt Warrants issued with each such Debt Security; (4)
if applicable, the date on and after which the Debt Warrants and the related
Offered Securities will be separately transferable; (5) the principal amount of
Debt Securities purchasable upon exercise of one Debt Warrant and the price at
which such principal amount of Debt Securities may be purchased upon exercise;
(6) the date on which the right to exercise the Debt Warrants shall commence and
the date on which such right shall expire; (7) whether the warrants represented
by the Debt Warrant Certificates will be issued in registered or bearer form;
(8) the currency, currencies or currency units in which the offering price, if
any, and exercise price are payable; (9) the antidilution provisions of the Debt
Warrants; and (10) any other terms of the Debt Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the Debt
Warrant Agent, which will be listed in the related Prospectus Supplement, or at
such other office as may be set forth therein. Warrantholders do not have any of
the rights of holders of Debt Securities (except to the extent that the consent
of warrantholders may be required for certain modifications of the terms of an
Indenture or form of the Debt Security, as the case may be, and the series of
Debt Securities issuable upon exercise of the Debt Warrants) and are not
entitled to payments of principal of and interest, if any, on the Debt
Securities.
EXERCISE OF DEBT WARRANTS
Debt Warrants may be exercised by surrendering the Debt Warrant
Certificate at the corporate trust office of the Debt Warrant Agent, with the
form of election to purchase on the reverse side of the Debt Warrant Certificate
properly completed and executed, and by payment in full of the exercise price,
as set forth in the Prospectus Supplement. Upon the exercise of Debt Warrants,
the Debt Warrant Agent will, as soon as practicable, deliver the Debt Securities
in authorized denominations in accordance with the instructions of the
exercising warrantholder and at the sole cost and risk of such holder. If less
than all of the Debt Warrants evidenced by the Debt Warrant Certificate are
exercised, a new Debt Warrant Certificate will be issued for the remaining
amount of Debt Warrants.
PLAN OF DISTRIBUTION
The Company may sell Offered Securities (1) through underwriters or
dealers, (2) directly to one or more purchasers, or (3) through agents. A
Prospectus Supplement will set forth the terms of the offering of the Offered
Securities offered thereby, including the name or names of any underwriters, the
purchase price of the Offered Securities, and the proceeds to the Company from
the sale, any underwriting discounts and other items constituting underwriters'
compensation, any public offering price, any discounts or concessions allowed or
reallowed or paid to dealers, and any securities exchange or market on which the
Offered Securities may be listed. Only underwriters so named in such Prospectus
Supplement are deemed to be underwriters in connection with the Offered
Securities offered thereby.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The obligations of the underwriters to purchase the Offered Securities will be
subject to certain conditions precedent, and the underwriters
16.
<PAGE> 18
will be obligated to purchase all the Offered Securities of the series offered
by the Prospectus Supplement if any of the Offered Securities are purchased. Any
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Offered Securities may also be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offering and sale of Offered Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the related Prospectus Supplement, any such agent will be acting on
a best-efforts basis for the period of its appointment.
All Offered Securities offered will be a new issue of securities with
no established trading market. Any underwriters to whom such Offered Securities
are sold by the Company for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any such Offered
Securities.
Agents and underwriters may be entitled under agreements entered into
with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the agents or underwriters may be required to
make in respect thereof. Agents and underwriters may engage in transactions
with, or perform services for, the Company in the ordinary course of business.
LEGAL MATTERS
The legality of the Offered Securities offered hereby will be passed
upon for the Company by Brobeck, Phleger & Harrison LLP, San Francisco,
California, and for the underwriters or agents, if any, by Davis Polk &
Wardwell, New York, New York.
EXPERTS
The audited consolidated financial statements of WellPoint Health
Networks Inc. and subsidiaries as of December 31, 1995 and 1994 and for each of
the three years in the period ended December 31, 1995, incorporated by
reference, have been audited by Coopers & Lybrand L.L.P., independent
accountants, as stated in their report with respect thereto and are incorporated
herein by reference, in reliance upon the authority of such firm as experts in
accounting and auditing.
The audited financial statements of Blue Cross of California Commercial
Operations as of December 31, 1995 and 1994 and for each of the three years in
the period ended December 31, 1995, incorporated by reference, have been audited
by Cooper & Lybrand L.L.P., independent accounts, as stated in their report with
respect thereto and are incorporated herein by reference, in reliance upon the
authority of such firm as experts in accounting and auditing.
The audited Post-Reorganization combined financial statements of the
Life & Health Benefits Management Division of Massachusetts Mutual Life
Insurance Company and Subsidiaries as of December 31, 1995 and 1994 and for each
of the three years in the period ended December 31, 1995, incorporated by
reference, have been audited by Coopers & Lybrand L.L.P., independent
accountants, as stated in their report with respect thereto and are incorporated
herein by reference, in reliance upon the authority of such firm as experts in
accounting and auditing.
17.
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All dollar amounts in the following table are estimates except the
amount of the registration fee under the Securities Act of 1933:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.................. $344,828
Blue sky fees and expenses..................................... 20,000
Accounting fees and expenses................................... 40,000
Legal fees and expenses........................................ 100,000
Printing and engraving......................................... 20,000
Rating Agency fees............................................. 25,000
Trustee's fees and expenses.................................... 40,000
Miscellaneous.................................................. 172
--------
Total................................................. $590,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Registrant is a California corporation. Reference is made to Section
317 of the California Corporations Code, which specifies the circumstances under
which a California corporation may indemnify a director, officer, employee or
agent, but further provides that a corporation's Articles of Incorporation may
authorize additional rights to indemnification. Article V of the Company's
Articles of Incorporation provides for such additional indemnification. Section
204 of the California Corporations Code generally limits the corporation's
ability to provide for indemnification rights for intentional misconduct, a
knowing and culpable violation of law, acts or omissions that involve the
absence of good faith, an unexcused pattern of inattention or reckless disregard
for duty, transactions from which the director or other indemnitee derives an
improper personal benefit, or improper shareholder distributions.
Article VI of the By-laws of the Company provides that the Company
shall indemnify its directors and officers to the maximum extent permitted by
the California Corporations Code.
Under the terms of the Underwriting Agreement filed as an exhibit
hereto, directors, certain officers and controlling persons of the Company are
entitled to indemnification under certain circumstances including proceedings
under the Securities Act of 1933 and the Securities Exchange Act of 1934.
ITEM 16. EXHIBITS
A list of exhibits included as part of this Registration Statement is
set forth in the Exhibit Index which immediately precedes such exhibits and is
incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
18.
<PAGE> 20
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1993.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Company pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions described in Item 15 or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. If a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company, will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
The Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
19.
<PAGE> 21
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
20.
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Woodland Hills, California, on the 19th day of July,
1996.
WELLPOINT HEALTH NETWORKS INC.
By: /s/ Leonard D. Schaeffer
----------------------------------
Leonard D. Schaeffer
Chairman of the Board and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, Leonard D.
Schaeffer and Thomas C. Geiser, and each one of them, his true and lawful
attorneys-in-fact and agents, each with full power of substitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to sign any registration statement for the same offering covered by this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming that each of said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each
of which shall be deemed an original, but which taken together shall constitute
an instrument.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 19th day of July, 1996.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Leonard D. Schaeffer Chairman of the Board and Chief Executive Officer
- ------------------------------ (Principal Executive Officer)
Leonard D. Schaeffer
/s/ Howard G. Phanstiel Executive Vice President, Financial and
- ------------------------------ Information Services (Chief Financial Officer)
Howard G. Phanstiel
</TABLE>
21.
<PAGE> 23
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/S/ Yon Y. Jorden Senior Vice President and Chief Financial Officer
______________________________ (Chief Accounting Officer)
Yon Y. Jorden
/s/ David R. Banks Director
______________________________
David R. Banks
/s/ W. Toliver Besson Director
______________________________
W. Toliver Besson
/s/ Roger E. Birk Director
______________________________
Roger E. Birk
/s/ Stephen L. Davenport Director
______________________________
Stephen L. Davenport
/s/ Julie A. Hill Director
______________________________
Julie A. Hill
/s/ Robert T. Knight Director
______________________________
Robert T. Knight
/s/ Elizabeth A. Sanders Director
______________________________
Elizabeth A. Sanders
</TABLE>
22.
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. EXHIBIT NUMBERED PAGE
----------- ------- -------------
<S> <C> <C>
1.1 Underwriting Agreement...............................................................
2.1 Recapitalization Agreement dated as of March 31, 1995 by and among Blue Cross
of California, WellPoint Health Networks Inc., Western Health Partnerships and
Western Foundation for Health Improvement (incorporated by reference from
Exhibit 2.1 to the Company's Form S-4 filed on April 8, 1996, File No. 333-3292).....
2.2 Agreement of Merger (incorporated by reference from Exhibit 33 to the Company's
8-K filed on June 3, 1996)...........................................................
4.1 Amended and Restated Articles of Incorporation of the Company (incorporated by
reference from Exhibit 3.5 to the Company's Form S-4 filed on April 8, 1996,
File No. 333-3292)...................................................................
4.2 By-laws of the Company (incorporated by reference from Exhibit 3.6 to the
Company's Form S-4 filed on April 8, 1996, File No. 333-3292)........................
4.3 Form of Senior Indenture.............................................................
4.4 Form of Subordinated Indenture.......................................................
4.5 Form of Standard Debt Warrant Provisions.............................................
5.1 Opinion of Brobeck, Phleger & Harrison LLP...........................................
12.1 Statement regarding computation of ratios of earnings to fixed charges...............
23.1 Consent of Coopers & Lybrand L.L.P...................................................
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in its Opinion filed as
Exhibit 5.1).........................................................................
24.1 Powers of Attorney (see signature page included in Registration Statement)...........
25.1 Statement of Eligibility of Trustee on Form T-1 for The Bank of New York.............
</TABLE>
23.
<PAGE> 1
Exhibit 1.1
WELLPOINT HEALTH NETWORKS INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES AND WARRANTS
TO PURCHASE DEBT SECURITIES)
______, 1996
From time to time, Wellpoint Health Networks Inc., a
California corporation (the "Company"), may enter into one or more underwriting
agreements that provide for the sale of designated securities to the several
underwriters named therein. The standard provisions set forth herein may be
incorporated by reference in any such underwriting agreement (an "Underwriting
Agreement"). The Underwriting Agreement, including the provisions incorporated
therein by reference, is herein sometimes referred to as this Agreement. Terms
defined in the Underwriting Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Debt Securities and Debt Warrants and has filed with, or
transmitted for filing to, or shall promptly hereafter file with or transmit for
filing to, the Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Offered Securities and the Debt Warrant Securities
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Securities Act"). The term "Registration Statement" means the registration
statement, including the exhibits thereto, as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Offered
Securities and the Debt Warrant Securities, together with the Basic Prospectus.
As used
<PAGE> 2
herein, the terms "Basic Prospectus," "Prospectus" and "preliminary prospectus"
shall include in each case the documents, if any, incorporated by reference
therein. The terms "supplement," "amendment" and "amend" as used herein shall
include all documents deemed to be incorporated by reference in the Prospectus
that are filed subsequent to the date of the Basic Prospectus by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
The term "Contract Securities" means the Offered Securities to
be purchased pursuant to the delayed delivery contracts substantially in the
form of Schedule I hereto, with such changes therein as the Company may approve
(the "Delayed Delivery Contracts"). The term "Underwriters' Securities" means
the Offered Securities other than Contract Securities.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
to the Company's knowledge, and no proceedings for such purpose are pending
before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) the
Registration Statement, when it became effective, did not contain, and as
amended or supplemented, if applicable, will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (iii) the
Registration Statement and the Prospectus comply, and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations
2
<PAGE> 3
and warranties set forth in this Section 1(b) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Manager expressly for use therein or (B) to that part of
the Registration Statement that constitutes the Statement of Eligibility (Form
T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
California, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
Subsidiaries (as defined below), taken as a whole.
(d) Each Subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole. As used herein, the term
Subsidiary shall have the meaning ascribed to it in the Indenture dated _____,
1996.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of
3
<PAGE> 4
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(g) The Debt Warrant Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general applicability.
(h) The Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding agreements of
the Company, enforceable in accordance with their respective terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(i) The Offered Securities and the Debt Warrant Securities
have been duly authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for (A) by the
Underwriters in accordance with the terms of the Underwriting Agreement, in the
case of the Underwriters' Securities, or by institutional investors in
accordance with the terms of the Delayed Delivery Contracts, in the case of the
Contract Securities and (B) upon the exercise of Debt Warrants pursuant to the
Debt Warrant Agreement, in the case of the Debt Warrant Securities, will be
entitled to the benefits of the Indenture or the Debt Warrant Agreement, as the
case may be, and will be valid and binding obligations of the Company, in each
case enforceable in accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration, if any,
and the availability of equitable remedies may be limited by equitable
principles of general applicability.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Offered Securities, the Debt Warrant Securities, the Delayed
Delivery Contracts and the Debt Warrant Agreement will not contravene any
provision
4
<PAGE> 5
of applicable law or the articles of incorporation or by-laws of the Company or
any agreement or other instrument binding upon the Company or any of its
Subsidiaries that is material to the Company and its Subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any Subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency (including, without limitation, any such approval, consents,
order, authorization, designation, declaration or filing required pursuant to
the Health Maintenance Organization Act of 1973, as amended (the "HMO Act"), and
the rules and regulations of the Department of Health and Human Services
thereunder, under the Knox-Keene Health Care Service Plan Act of 1975 (the
"Knox-Keene Act") and under any applicable insurance laws) is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Offered Securities, the Debt Warrant Securities, the Delayed
Delivery Contracts or the Debt Warrant Agreement, except such as may be required
by the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Offered Securities and the Debt Warrant Securities.
(k) There has not occurred any material adverse change in the
condition, financial or otherwise, or in the earnings, business or operations of
the Company and its Subsidiaries, taken as a whole, from that set forth in the
Prospectus (which statement, solely for the purpose of this representation,
shall not include any amendments or supplements to the Prospectus subsequent to
the date of this Agreement).
(l) There are no legal or governmental proceedings pending or,
to the Company's knowledge, threatened to which the Company or any of its
Subsidiaries is a party or to which any of the properties of the Company or any
of its Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are not
described, filed or incorporated as required.
(m) The Company and its Subsidiaries, as necessary [to be
discussed with appropriate subsidiaries to
5
<PAGE> 6
be named specifically] have been duly qualified and licensed in the State of
California as health care service plans under the Knox-Keene Act.
(n) The Company is in compliance in all material respects with
the requirements of the Blue Cross Blue Shield Association license.
(o) The Company and each of its Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under the Knox-Keene Act
and any other applicable health care laws or insurance laws, as are necessary to
own, lease and operate its respective properties and to conduct its business,
except where such failure to have a permit would not have a material adverse
effect on the business operations or financial condition of the Company and its
Subsidiaries taken as a whole; the Company and each of the Subsidiaries has
fulfilled and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its Subsidiaries.
(p) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(q) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and Debt Warrant Securities and the
application of the proceeds thereof as described in the Prospectus, will not be
an "investment company" as such term is defined in the Investment Company Act of
1940, as amended.
(r) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of Cuba
or with any person or affiliate located in Cuba.
2. DELAYED DELIVERY CONTRACTS. If the
6
<PAGE> 7
Prospectus provides for sales of Offered Securities pursuant to Delayed Delivery
Contracts, the Company hereby authorizes the Underwriters to solicit offers to
purchase Contract Securities on the terms and subject to the conditions set
forth in the Prospectus pursuant to Delayed Delivery Contracts. Delayed Delivery
Contracts may be entered into only with institutional investors approved by the
Company of the types set forth in the Prospectus. On the Closing Date, the
Company will pay to the Manager as compensation for the accounts of the
Underwriters the commission set forth in the Underwriting Agreement in respect
of the Contract Securities. The Underwriters will not have any responsibility in
respect of the validity or the performance of any Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery
Contracts with institutional investors, the aggregate amount of Offered
Securities to be purchased by the several Underwriters shall be reduced by the
aggregate amount of Contract Securities; such reduction shall be applied to the
commitment of each Underwriter pro rata in proportion to the amount of Offered
Securities set forth opposite such Underwriter's name in the Underwriting
Agreement, except to the extent that the Manager determines that such reduction
shall be applied in other proportions and so advises the Company; provided,
however, that the total amount of Offered Securities to be purchased by all
Underwriters shall be the aggregate amount set forth above, less the aggregate
amount of Contract Securities.
3. TERMS OF PUBLIC OFFERING. The Company is advised by the
Manager that the Underwriters propose to make a public offering of their
respective portions of the Underwriters' Securities as soon after this Agreement
has been entered into as in the Manager's judgment is advisable. The terms of
the public offering of the Underwriters' Securities are set forth in the
Prospectus.
4. PAYMENT AND DELIVERY. Payment for the Underwriters'
Securities shall be made in Federal Funds, or funds immediately available in New
York City, by certified or official bank check or checks payable to the order of
the Company or by wire transfer to an account designated by the Company, at the
time and place set forth in the Underwriting Agreement, upon delivery to the
Manager for the respective accounts of the several Underwriters of the
Underwriters' Securities registered in such names and in such denominations as
the Manager shall request in writing not
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less than two full business days prior to the date of delivery, with any
transfer taxes payable in connection with the transfer of the Underwriters'
Securities to the Underwriters duly paid.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or notice of any review for a possible
change that does not indicate the direction of the possible
change, in the rating accorded any of the Company's securities
by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change in the
condition, financial or otherwise, or in the earnings,
business or operations of the Company and its Subsidiaries,
taken as a whole, from that set forth in the Prospectus (which
statement, solely for the purpose of this condition, shall not
include any amendments or supplements to the Prospectus
subsequent to the date of this Agreement) that, in the
judgment of the Manager, is material and adverse and that
makes it, in the judgment of the Manager, impracticable to
market the Offered Securities on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate or certificates, dated the Closing Date and signed by an
executive officer of the Company, to the effect set forth in clause
(a)(i) above and to the effect that the representations and warranties
of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
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<PAGE> 9
performed or satisfied hereunder on or before the Closing Date.
The officers signing and delivering such certificate or
certificates may rely upon the best of his or her knowledge as to
proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Brobeck Phleger & Harrison LLP, outside counsel for the
Company, dated the Closing
Date, to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the State of California, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
its Subsidiaries, taken as a whole;
(ii) each Subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its Subsidiaries,
taken as a whole;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by the Company
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<PAGE> 10
and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(v) the Debt Warrant Agreement has been duly
authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in
accordance with its terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(vi) the Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company and are
valid and binding agreements of the Company, enforceable in
accordance with their respective terms except as (a) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (b) the availability of equitable remedies may
be limited by equitable principles of general applicability;
(vii) the Offered Securities and the Debt Warrant
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the
Indenture and delivered to and paid for (A) by the
Underwriters in accordance with the terms of the Underwriting
Agreement, in the case of Underwriters' Securities, or by
institutional investors in accordance with the terms of the
Delayed Delivery Contracts, in the case of the Contract
Securities and (B) upon the exercise of Debt Warrants pursuant
to the Debt Warrant Agreement, in the case of the Debt Warrant
Securities, will be entitled to the benefits of the Indenture
or the Debt Warrant Agreement, as the case may be, and will be
valid and binding obligations of the Company, in each case
enforceable in accordance with their respective terms except
as (a) the enforceability thereof may
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<PAGE> 11
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration, if
any, and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(viii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement, the Indenture, the Offered Securities, the
Debt Warrant Securities, the Delayed Delivery Contracts and
the Debt Warrant Agreement will not contravene any provision
of applicable law or the certificate of incorporation or
by-laws of the Company or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the
Company or any of its Subsidiaries that is material to the
Company and its Subsidiaries, taken as a whole, or, to the
best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any Subsidiary, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, the Indenture, the Offered Securities, the Debt
Warrant Securities, the Delayed Delivery Contract or the Debt
Warrant Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in
connection with the offer and sale of the Offered Securities;
(ix) the statements (A) in the Prospectus under the
captions "Description of the Debt Securities," "Description of
the Warrants to Purchase Debt Securities," "Plan of
Distribution" and "[ ]," and (B) in the Registration Statement
under Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(x) after due inquiry, such counsel does not know of
any legal or governmental proceedings
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<PAGE> 12
pending or threatened to which the Company or any of its
Subsidiaries is a party or to which any of the properties of
the Company or any of its Subsidiaries is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus
or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or
incorporated as required;
(xi) the Company is not and, after giving effect to
the offering and sale of the Offered Securities and the Debt
Warrant Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act
of 1940, as amended;
(xii) such counsel is of the opinion ascribed to it
in the Prospectus, as then amended or supplemented, under the
caption "[Federal Income Tax Considerations]";
Such counsel shall also include statements to the
effect that (A) each document, if any, filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus (except for
financial statements, schedules and other financial data included
therein as to which such counsel need not express any opinion) complied
when so filed as to form in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder,
(B) no facts have come to such counsel's attention that would lead such
counsel to believe that (except for financial statements, schedules and
other financial data as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) the Registration
Statement, when such part became effective, contained and, as of the
date such opinion is delivered, contains any untrue statement of a
material fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (C) as of the effective date of the
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<PAGE> 13
Registration Statement the Registration Statement and Prospectus
(except for financial statements, schedules and other financial data
included therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder and
(D) no facts have come to such counsel's attention that would lead such
counsel to believe that (except for financial statements, schedules and
other financial data as to which such counsel need not express any
belief) the Prospectus as of the date such opinion is delivered
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date
an opinion of the General Counsel of the Company, dated the Closing
Date, to the effect that:
(i) the statements (A) in "Item 1 - Business --
Government Regulation" and in "Item 3 - Legal Proceedings" of
the Company's most recent annual report on Form 10-K
incorporated by reference in the Prospectus and (B) in "Item 1
- Legal Proceedings" of Part II of the Company's quarterly
reports on Form 10-Q, if any, filed since such annual report,
in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and
fairly summarize, in all material respects, the matters
referred to therein;
(ii) the Company and its Subsidiaries, as necessary
[to be discussed with appropriate subsidiaries to be named
specifically], have been duly qualified and licensed in the
State of California as health care service plans under the
Knox-Keene Act;
(iii) the Company is in compliance in all material
respects with the requirements of the Blue Cross Blue Shield
Association license; and
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<PAGE> 14
(iv) to such counsel's knowledge, none of the Company
and its Subsidiaries have received any notice or
correspondence (i) relating to the loss or threatened loss by
the Company or any of its Subsidiaries of any material permit,
license, franchise or authorization by any applicable managed
health care or insurance regulatory agency or body or (ii)
asserting that the Company or any of its Subsidiaries is not
in substantial compliance with any applicable regulation
relating to the operation or conduct of managed health care or
insurance businesses (the "HMO Regulations") or threatening
the taking of any action against the Company or any of its
Subsidiaries under any HMO Regulation, except where such
noncompliance or the taking of such action, if adversely
determined, would not have a material adverse effect on the
business, operations or financial condition of the Company and
its Subsidiaries, taken as a whole.
(e) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, special counsel for the
Underwriters, dated the Closing Date, covering the matters referred to
in subparagraphs (iii), (iv), (v), (vi), (vii) and (ix) (but only as to
the statements in the Prospectus under "Description of the Debt
Securities" and "Description of the Warrants to Purchase Debt
Securities" and "Plan of Distribution") and clauses (B), (C) and (D) of
the final subparagraph of paragraph (c) above.
With respect to the final subparagraph of paragraph
(c) above, Brobeck Phleger & Harrison may state that their opinion and belief
are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or
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<PAGE> 15
verification, except as specified. With respect to clauses (B), (C) and (D) of
the final subparagraph of paragraph (c) above, Davis Polk & Wardwell may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto (but not including documents incorporated therein by
reference) and review and discussion of the contents thereof (including
documents incorporated therein by reference), but are without independent check
or verification, except as specified. In giving their opinion, Brobeck Phleger &
Harrison may rely, as to matters of New York law, upon the opinion of Davis Polk
& Wardwell as referred to in paragraph (e) above, and Davis Polk & Wardwell may
rely, as to matters governed by California law, upon the opinion of Brobeck
Phleger & Harrison referred to in paragraph (c) above.
The opinion of Brobeck Phleger & Harrison described
in paragraph (c) above shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(f) The Underwriters shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to
the Underwriters, from Coopers & Lybrand L.L.P., the Company's
independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference into
the Prospectus.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish the Manager, without charge, one conformed copy
of the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and, during the period mentioned
in paragraph (c) below, as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments
thereto or to the Registration Statement as the Manager may reasonably
request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Offered Securities, to
furnish to the Manager a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which the Manager reasonably objects.
(c) If, during such period after the first date
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<PAGE> 16
of the public offering of the Offered Securities as in the opinion of
counsel for the Underwriters the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses the
Manager will furnish to the Company) to which Offered Securities may
have been sold by the Manager on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Offered Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Manager shall reasonably request and to maintain such qualification
for as long as the Manager shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Manager as soon as practicable an earning statement
covering a twelve month period beginning on the first day of the first
full fiscal quarter after the date of this Agreement, which earning
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder. If such fiscal quarter is the last fiscal quarter of the
Company's fiscal year, such earning statement shall be made available
not later than 90 days after the close of the period covered thereby
and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(f) During the period beginning on the date of the
Underwriting Agreement and continuing to and
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<PAGE> 17
including the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or warrants to
purchase debt securities of the Company substantially similar to the
Offered Securities (other than (i) the Offered Securities and (ii)
commercial paper issued in the ordinary course of business), without
the prior written consent of the Manager.
(g) To pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and
filing of the Registration Statement and the Prospectus and all
amendments and supplements thereto; (ii) the preparation, issuance and
delivery of the Offered Securities; (iii) the fees and disbursements of
the Company's counsel and accountants and of the Trustee and its
counsel; (iv) the qualification of the Offered Securities under state
securities or Blue Sky laws in accordance with the provisions of
Section 6(d), including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection
with the preparation of any Blue Sky or Legal Investment Memoranda; (v)
the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and all
amendments thereto and of any preliminary prospectus and the Prospectus
and any amendments or supplements thereto; (vi) the printing and
delivery to the Underwriters of copies of any Blue Sky or Legal
Investment Memoranda; (vii) any fees charged by rating agencies for the
rating of the Offered Securities; (viii) the filing fees and expenses,
if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc. made in connection with the
Offered Securities; (ix) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors and
(x) all document production charges and expenses of counsel to the
Underwriters incurred in connection with the preparation of the
Indenture.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities
17
<PAGE> 18
(including, without limitation, any legal or other expenses reasonably incurred
by any Underwriter or any such controlling person in connection with defending
or investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use therein. The indemnity agreement contained in this
Section 6(a) with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or the benefit of any person controlling any
Underwriter) if the person asserting any such issues, liabilities, claims,
damages or expenses purchased Offered Securities which is the subject thereof,
and if at or prior to the written confirmation of the sale of the Offered
Securities a copy of the final Prospectus (as amended or supplemented) was not
sent or delivered to such person and the final Prospectus (as amended or
supplemented) would have cured the defect giving rise to such losses,
liabilities, claims, damages, or expenses, provided that the Company has
complied with its obligations set forth in Section 5(a) and 5(c) hereof to
permit such sending or delivery.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving
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<PAGE> 19
any person in respect of which indemnity may be sought pursuant to either
paragraph (a) or (b) of this Section 7, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in
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<PAGE> 20
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate public offering price
of the Offered Securities. The relative fault of the Company on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent
20
<PAGE> 21
such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amounts of Offered Securities they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section 7. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Offered Securities.
8. TERMINATION. This Agreement shall be subject to termination
by notice given by the Manager to the
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Company, if (a) after the execution and delivery of the Underwriting Agreement
and prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, or the National Association of Securities
Dealers, Inc., (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any material adverse
change in financial markets or any calamity or crisis that, in the judgment of
the Manager, is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event, singly or together with
any other such event, makes it, in the judgment of the Manager, impracticable to
market the Offered Securities on the terms and in the manner contemplated in the
Prospectus.
9. DEFAULTING UNDERWRITERS. If, on the Closing Date, any one
or more of the Underwriters shall fail or refuse to purchase Underwriters'
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate amount of the Underwriters' Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the amount of Underwriters' Securities set forth opposite
their respective names in the Underwriting Agreement bears to the aggregate
amount of Underwriters' Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the amount of Underwriters' Securities
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
amount of Underwriters' Securities without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Underwriters' Securities and the aggregate amount of
Underwriters' Securities with respect to which such default occurs is more than
one-tenth of the aggregate amount of Underwriters' Securities to be purchased on
such
22
<PAGE> 23
date, and arrangements satisfactory to the Manager and the Company for the
purchase of such Underwriters' Securities are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either the
Manager or the Company shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
23
<PAGE> 24
UNDERWRITING AGREEMENT
___________, 199_
WellPoint Health Networks Inc.
21555 Oxnard Street
Woodland Hills, CA 91367
Dear Sirs and Mesdames:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that WellPoint Health
Networks Inc., a California corporation (the "Company"), proposes to issue and
sell [Currency and Principal Amount] aggregate initial offering price of [Full
title of Debt Securities] (the "Debt Securities"), ____ warrants (the "Debt
Warrants") to purchase [Currency and Principal Amount] aggregate initial
offering price of its [title of debt securities] (the "Debt Warrant
Securities"). The Debt Securities and the Debt Warrants but not the Debt Warrant
Securities, are collectively referred to herein as the "Offered Securities." The
Debt Securities and the Debt Warrant Securities will be issued pursuant to the
provisions of an Indenture dated as of _______________, 1996 (the "Indenture")
between the Company and The Bank of New York, as Trustee (the "Trustee") and the
Debt Warrants will be issued pursuant to the provisions of a Debt Warrant
Agreement dated as of _________________, 1996 (the "Debt Warrant Agreement")
between the Company and [NAME OF DEBT WARRANT AGENT], as Debt Warrant Agent.
Subject to the terms and conditions set forth or incorporated
by reference herein, the Company hereby agrees to sell to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the respective principal amounts of Debt Securities
and numbers of Debt Warrants set forth below opposite their names at a purchase
price of ____% of the principal amount of Debt Securities [plus accrued
interest, if any, from
<PAGE> 25
[Date of Offered Securities] to the date of payment and delivery](1) and at a
purchase price of $____ per Debt Warrant:
<TABLE>
<CAPTION>
Principal Amount
Name of Debt Securities
---- ------------------
<S> <C>
[Insert syndicate list]
Total . . . . . .
</TABLE>
<TABLE>
<CAPTION>
Number of Debt
Name Warrants
---- --------------
<S> <C>
[Insert syndicate list]
Total . . . . . .
</TABLE>
The principal amount of Debt Securities and number of Debt
Warrants to be purchased by the several Underwriters shall be reduced by the
aggregate principal amount of Debt Securities and number of Debt Warrants sold
pursuant to delayed delivery contracts.
The Underwriters will pay for the Debt Securities and Debt
Warrants (less any Debt Securities and Debt Warrants sold pursuant to delayed
delivery contracts) upon delivery thereof at [office] at ______ a.m. (New York
time) on ___________, 199_, or at such other time, not later than 5:00 p.m. (New
York time) on __________, 199_, as shall be designated by the Manager. The time
and date of such payment and delivery are hereinafter referred to as the Closing
Date.
The Offered Securities shall have the terms set forth in the
Prospectus dated ___________, 199_, and the Prospectus Supplement dated
____________, 199_, including
- --------
(1) To be added only if the transaction does not close flat.
2
<PAGE> 26
the following:
Terms of Debt Securities
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: ____________ __ and
____________ __ commencing
____________ __, ____
[(Interest accrues from
____________ __, ____)](2)
Form and Denomination:
[Other Terms:]
Terms of Debt Warrants
[Number of Debt Warrants issued
with each $__________ principal
amount of Debt Securities:]
[Detachable Date:]
Exercise Date:
Expiration Date:
Exercise Price:
Principal amount of Debt Warrant
Securities purchasable upon
exercise of one Debt Warrant:
Form:
[Other Terms:]
Terms of Debt Warrant Securities
Maturity Date:
- --------
(2) To be added only if the transaction does not close flat.
3
<PAGE> 27
Interest Rate:
Redemption Provisions:
Interest Payment Dates:
Form and Denomination:
[Other Terms]:
The commission to be paid to the Underwriters in respect of
the Offered Securities purchased pursuant to delayed delivery contracts arranged
by the Underwriters shall be ___% of the principal amount of the Debt Securities
so purchased and $____ per Debt Warrant so purchased.
All provisions contained in the document entitled WellPoint Health
Networks Inc. Underwriting Agreement Standard Provisions (Debt Securities and
Warrants to Purchase Debt Securities) dated _____, 1996, a copy of which is
attached hereto, are herein incorporated by reference in their entirety and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, (ii) all references in such document to a type of security
that is not an Offered Security shall not be deemed to be a part of this
Agreement, (iii) if the Offered Securities do not include Debt Warrants, then
all references in such document to Debt Warrant Securities shall not be deemed
to be a part of this Agreement and (iv) all references in such document to a
type of agreement that has not been entered into in connection with the
transactions contemplated hereby shall not be deemed to be a part of this
Agreement.
4
<PAGE> 28
Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
[NAME(S) OF MANAGER(S)]
Acting severally on behalf of itself
and the several Underwriters named
herein
By: _____________________________
Name:
Title:
Accepted:
WellPoint Health Networks Inc.
By: ___________________________
Name:
Title:
5
<PAGE> 29
Schedule I
DELAYED DELIVERY CONTRACT
________, 199_
Dear Sirs and Mesdames:
The undersigned hereby agrees to purchase from WellPoint
Health Networks Inc., a California corporation (the "Company"), and the Company
agrees to sell to the undersigned the Company's securities described in Schedule
A annexed hereto (the "Securities"), offered by the Company's Prospectus dated
__________________, 19__ and Prospectus Supplement dated ________________, 19__,
receipt of copies of which are hereby acknowledged, at a purchase price stated
in Schedule A and on the further terms and conditions set forth in this
Agreement. The undersigned does not contemplate selling Securities prior to
making payment therefor.
The undersigned will purchase from the Company Securities in
the principal amount and numbers on the delivery dates set forth in Schedule A.
Each such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order in
Federal Funds, or funds immediately available in New York City, by certified or
official bank check or by wire transfer to an account designated by the Company
at the office of ____________________, New York, N.Y., at 10:00 A.M. (New York
time) on the Delivery Date, upon delivery to the undersigned of the Securities
to be purchased by the undersigned on the Delivery Date, in such denominations
and registered in such names as the undersigned may designate by
1
<PAGE> 30
written or telegraphic communication addressed to the Company not less than five
full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for the Securities on the Delivery Date shall be subject to the
conditions that (1) the purchase of Securities to be made by the undersigned
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Company shall have
sold, and delivery shall have taken place to the underwriters (the
"Underwriters") named in the Prospectus Supplement referred to above of, such
part of the Securities as is to be sold to them. Promptly after completion of
sale and delivery to the Underwriters, the Company will mail or deliver to the
undersigned as its address set forth below notice to such effect, accompanied by
a copy of the opinion of counsel for the Company delivered to the Underwriters
in connection therewith.
Failure to take delivery of and make payment for Securities by
any purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the other.
If this Agreement is acceptable to the Company, it is
requested that the Company sign the form of acceptance below and mail or deliver
one of the counterparts hereof to the undersigned at its address set forth
below. This will become a binding agreement, as of the date first above written,
between the Company and the undersigned when such counterpart is so mailed or
delivered.
2
<PAGE> 31
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
Yours very truly,
___________________________
(Purchaser)
By ________________________
___________________________
(Title)
___________________________
___________________________
(Address)
Accepted:
WellPoint Health Networks Inc.
By ________________________
3
<PAGE> 32
PURCHASER --- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of
the Purchaser with whom details of delivery on the Delivery Date may be
discussed is as follows: (Please print.)
<TABLE>
<CAPTION>
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
<S> <C> <C>
_______________________ _____________________ _______________________
</TABLE>
4
<PAGE> 33
SCHEDULE A
Securities:
Principal Amounts or Numbers to be Purchased:
Purchase Price:
Delivery
<PAGE> 1
Exhibit 4.3
WELLPOINT HEALTH NETWORKS INC.
AND
THE BANK OF NEW YORK
Trustee
----------------------
Senior Debt Securities
-----------------------
INDENTURE
Dated as of _______, 1996
-----------------------
<PAGE> 2
CROSS REFERENCE SHEET*
Provisions of Sections 310 through 318(a) inclusive of the Trust
Indenture Act of 1939, as amended, and the Indenture dated as of _______, 1996
between WellPoint Health Networks Inc. and The Bank of New York, as Trustee.
<TABLE>
<CAPTION>
SECTION OF ACT SECTION OF INDENTURE
<S> <C>
310(a)(1)..................................... 6.10
310(a)(2)..................................... 6.10
310(a)(3)..................................... N/A
310(a)(4)..................................... N/A
310(a)(5)..................................... 6.10
310(b)........................................ 6.10
310(c)........................................ N/A
311(a)........................................ 6.11
311(b)........................................ 6.11
311(b)(2)..................................... 6.11
311(c)........................................ N/A
312(a)........................................ 4.1
312(b)........................................ 4.2(b)
312(c)........................................ 4.2(c)
313(a)........................................ 6.6
313(b)........................................ 6.6
313(c)........................................ 6.6
313(d)........................................ 6.6
314(a)........................................ 4.3
314(b)........................................ N/A
314(c)(1)..................................... 2.4 and 11.5
314(c)(2)..................................... 2.4 and 11.5
314(c)(3)..................................... N/A
314(d)........................................ N/A
314(e)........................................ 11.5
315(a)........................................ 6.1(b)
315(b)........................................ 6.5
315(c)........................................ 6.1(a)
315(d)(1)..................................... 6.1(b)(1) and (2)
315(d)(2)..................................... 6.1(c)(2)
315(d)(3)..................................... 6.1(c)(3)
315(e)........................................ 5.10
316(a)(1)(A) ................................. 5.8
</TABLE>
- --------
* This cross reference sheet shall not, for any purpose, be deemed to be a part
of the Indenture.
i.
<PAGE> 3
<TABLE>
<S> <C>
316(a)(1)(B).................................. 5.9
316(a)(2)..................................... N/A
316(b)........................................ 5.6
316(c)........................................ 2.7
317(a)(1)..................................... 5.2
317(a)(2)..................................... 5.2
317(b)........................................ 3.2 and 3.3
318(a)........................................ 11.7
</TABLE>
Attention should also be directed to Section 318(c) of the Trust
Indenture Act of 1939, as amended, which provides that the provisions of
Sections 310 through 317 of such Act are a part of and govern every qualified
indenture, whether or not physically contained therein.
ii.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE DEFINITIONS........................................................................................ 1
SECTION 1.1 Certain Terms Defined..................................................................... 1
Attributable Debt............................................................................. 1
Board of Directors............................................................................ 2
Business Day.................................................................................. 2
Capital Lease................................................................................. 2
Capital Stock................................................................................. 2
Commission.................................................................................... 2
Common Shares................................................................................. 2
Company....................................................................................... 2
Consolidated Net Tangible Assets.............................................................. 2
Corporate Trust Office........................................................................ 3
covenant defeasance........................................................................... 3
defaulted interest............................................................................ 3
Depository.................................................................................... 3
Depository Security........................................................................... 3
defeasance.................................................................................... 3
Dollar........................................................................................ 3
Event of Default.............................................................................. 3
Funded Debt................................................................................... 3
Government Obligations........................................................................ 3
Holder........................................................................................ 4
Holder of Securities.......................................................................... 4
Registered Holder............................................................................. 4
Securityholder................................................................................ 4
Indenture..................................................................................... 4
Lien.......................................................................................... 4
Officers' Certificate......................................................................... 4
Opinion of Counsel............................................................................ 4
Original issue date........................................................................... 4
Original Issue Discount Security.............................................................. 4
Outstanding................................................................................... 4
Paying Agent.................................................................................. 5
Person........................................................................................ 5
person........................................................................................ 5
Place of Payment.............................................................................. 5
Preferred Shares.............................................................................. 5
principal..................................................................................... 5
Property...................................................................................... 5
Responsible Officer........................................................................... 6
Sale and Lease-Back Transaction............................................................... 6
Secured Debt.................................................................................. 6
</TABLE>
i.
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
Security...................................................................................... 6
Securities.................................................................................... 6
Series........................................................................................ 6
Series of Securities.......................................................................... 6
Subsidiary.................................................................................... 6
Trustee....................................................................................... 6
Trust Indenture Act of 1939................................................................... 7
United States of America...................................................................... 7
Value......................................................................................... 7
vice president................................................................................ 7
ARTICLE TWO SECURITIES......................................................................................... 7
SECTION 2.1 Forms Generally........................................................................... 7
SECTION 2.2 Form of Trustee's Certificate of Authentication........................................... 8
SECTION 2.3 Amount Unlimited; Issuable in Series...................................................... 8
SECTION 2.4 Authentication and Delivery of Securities................................................. 10
SECTION 2.5 Execution of Securities................................................................... 11
SECTION 2.6 Certificate of Authentication............................................................. 12
SECTION 2.7 Denomination and Date of Securities; Payments of Interest................................. 12
SECTION 2.8 Registration, Transfer and Exchange....................................................... 14
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities................................. 15
SECTION 2.10 Cancellation of Securities............................................................... 15
SECTION 2.11 Temporary Securities..................................................................... 16
SECTION 2.12 Securities in Global Form................................................................ 16
SECTION 2.13 CUSIP Numbers............................................................................ 17
ARTICLE THREE COVENANTS OF THE COMPANY......................................................................... 17
SECTION 3.1 Payment of Principal and Interest......................................................... 17
SECTION 3.2 Offices for Payment, Etc.................................................................. 18
SECTION 3.3 Paying Agents............................................................................. 18
SECTION 3.4 Written Statement to Trustee.............................................................. 19
SECTION 3.5 Waiver of Certain Covenants............................................................... 19
SECTION 3.6 Limitation on Liens....................................................................... 19
SECTION 3.7 Limitation on Sale and Lease-Back Transactions............................................ 21
SECTION 3.8 Calculation of Original Issue Discount.................................................... 22
ARTICLE FOUR SECURITYHOLDERS' LISTS AND
REPORTS BY THE COMPANY............................................................................ 22
SECTION 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Securityholders.............................................................. 22
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists..................................... 22
SECTION 4.3 Reports by the Company.................................................................... 23
</TABLE>
ii.
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE FIVE REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT............................................................................. 24
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default......................................................................... 24
SECTION 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt.................................................................... 27
SECTION 5.3 Application of Proceeds................................................................... 28
SECTION 5.4 Restoration of Rights on Abandonment of Proceedings....................................... 29
SECTION 5.5 Limitations on Suits by Securityholders................................................... 29
SECTION 5.6 Unconditional Right of Securityholders to
Institute Certain Suits................................................................... 30
SECTION 5.7 Powers and Remedies Cumulative;
Delay or Omission Not Waiver of Default................................................... 30
SECTION 5.8 Control by Securityholders................................................................ 30
SECTION 5.9 Waiver of Past Defaults................................................................... 31
SECTION 5.10 Right of Court to Require Filing of
Undertaking to Pay Costs................................................................. 31
SECTION 5.11 Suits for Enforcement.................................................................... 31
ARTICLE SIX CONCERNING THE TRUSTEE............................................................................. 32
SECTION 6.1 Duties of Trustee......................................................................... 32
SECTION 6.2 Rights of Trustee......................................................................... 33
SECTION 6.3 Individual Rights of Trustee.............................................................. 34
SECTION 6.4 Trustee's Disclaimer...................................................................... 34
SECTION 6.5 Notice of Defaults........................................................................ 35
SECTION 6.6 Reports by Trustee to Holders............................................................. 35
SECTION 6.7 Compensation and Indemnity................................................................ 35
SECTION 6.8 Replacement of Trustee.................................................................... 36
SECTION 6.9 Successor Trustee by Merger............................................................... 37
SECTION 6.10 Eligibility; Disqualification............................................................ 37
SECTION 6.11 Preferential Collection of Claims Against Company........................................ 37
ARTICLE SEVEN CONCERNING THE SECURITYHOLDERS................................................................... 37
SECTION 7.1 Evidence of Action Taken by Securityholders............................................... 37
SECTION 7.2 Proof of Execution of Instruments......................................................... 38
SECTION 7.3 Holders to Be Treated as Owners........................................................... 38
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding........................................ 38
SECTION 7.5 Right of Revocation of Action Taken....................................................... 38
ARTICLE EIGHT SUPPLEMENTAL INDENTURES.......................................................................... 39
SECTION 8.1 Supplemental Indentures Without
Consent of Securityholders................................................................ 39
SECTION 8.2 Supplemental Indentures with Consent of Securityholders................................... 40
SECTION 8.3 Effect of Supplemental Indenture.......................................................... 41
</TABLE>
iii.
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 8.4 Documents to Be Given to Trustee.......................................................... 41
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures................................................................... 41
ARTICLE NINE CONSOLIDATION, MERGER, SALE OR CONVEYANCE......................................................... 42
SECTION 9.1 Company May Consolidate, Etc. on Certain Terms............................................ 42
SECTION 9.2 Successor Corporation Substituted......................................................... 42
SECTION 9.3 Opinion of Counsel to Trustee............................................................. 43
ARTICLE TEN SATISFACTION AND DISCHARGE OF INDENTURE:
UNCLAIMED MONEYS................................................................................... 43
SECTION 10.1 Satisfaction and Discharge of Indenture.................................................. 43
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities.................................................................... 46
SECTION 10.3 Repayment of Moneys Held by Paying Agent................................................. 47
SECTION 10.4 Return of Unclaimed Moneys Held by
Trustee and Paying Agent................................................................. 47
SECTION 10.5 Reinstatement of Company's Obligations................................................... 47
ARTICLE ELEVEN MISCELLANEOUS PROVISIONS........................................................................ 48
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability................................................. 48
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders.............................................................. 48
SECTION 11.3 Successors and Assigns of Company Bound by Indenture..................................... 48
SECTION 11.4 Notices and Demands on Company,
Trustee and Securityholders.............................................................. 48
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein....................................................... 49
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.......................................... 50
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939.................................................................... 50
SECTION 11.8 California Law to Govern................................................................. 50
SECTION 11.9 Counterparts............................................................................. 50
SECTION 11.10 Effect of Headings; Gender.............................................................. 50
ARTICLE TWELVE REDEMPTION OF SECURITIES
AND SINKING FUNDS............................................................................... 51
SECTION 12.1 Applicability of Article................................................................. 51
SECTION 12.2 Notice of Redemption; Partial Redemptions................................................ 51
SECTION 12.3 Payment of Securities Called for Redemption.............................................. 52
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption................................................................. 53
SECTION 12.5 Mandatory and Optional Sinking Funds..................................................... 53
</TABLE>
iv.
<PAGE> 8
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 12.6 Repayment at the Option of the Holders................................................... 55
SECTION 12.7 Conversion Arrangement on Call for Redemption............................................ 56
ARTICLE THIRTEEN CONVERSION OF SECURITIES...................................................................... 56
SECTION 13.1 Applicability of Article................................................................. 56
SECTION 13.2 Right of Holders to Convert Securities
into Common Shares....................................................................... 57
SECTION 13.3 Issuance of Common Shares on Conversions................................................. 57
SECTION 13.4 No Payment or Adjustment for Interest or Dividends....................................... 58
SECTION 13.5 Adjustment of Conversion Price........................................................... 59
SECTION 13.6 No Fractional Shares to Be Issued........................................................ 62
SECTION 13.7 Preservation of Conversion Rights upon
Consolidation, Merger, Sale or Conveyance................................................ 63
SECTION 13.8 Notice to Holders of the Securities of a Series
Prior to Taking Certain Types of Action.................................................. 63
SECTION 13.9 Covenant to Reserve Shares for Issuance on
Conversion of Securities................................................................. 64
SECTION 13.10 Compliance with Governmental Requirements............................................... 64
SECTION 13.11 Payment of Taxes upon Certificates for
Shares Issued upon Conversion........................................................... 65
SECTION 13.12 Trustee's Duties with Respect to Conversion Provisions.................................. 65
SECTION 13.13 Conversion of Securities into Preferred Stock........................................... 65
</TABLE>
v.
<PAGE> 9
THIS INDENTURE, dated as of ______ __, 1996 between WELLPOINT
HEALTH NETWORKS INC., a California corporation (the "Company"), and The Bank of
New York, a New York banking corporation (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issue from time
to time of its unsecured debentures, notes or other evidences of indebtedness
(the "Securities") to be issued in one or more Series; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed for the equal and
ratable benefit of the Holders from time to time of the Securities or of Series
thereof as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended, or the definitions of which in the Securities Act of 1933, as
amended, are referred to in the Trust Indenture Act of 1939, as amended,
including terms defined therein by reference to the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise clearly requires), shall have the meanings assigned to such terms in
said Trust Indenture Act and in said Securities Act as in force at the date of
this Indenture. All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole, as supplemented and amended
from time to time, and not to any particular Article, Section or other
subdivision. The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.
"Attributable Debt" means the total net amount of rent
required to be paid during the remaining term of any lease, discounted at the
weighted average rate per annum then borne by the outstanding Securities.
1.
<PAGE> 10
"Board of Directors" means either the Board of Directors of
the Company or any duly authorized committee of that Board or any duly
authorized committee created by that Board.
"Business Day" means, except as may otherwise be provided in
the form of Securities of any particular Series, with respect to any Place of
Payment or place of publication, any day, other than a Saturday or Sunday, or a
day on which banking institutions are authorized or required by law or
regulation to close in that Place of Payment, place of publication or where the
principal corporate trust office of the Trustee is located.
"Capital Lease" means all material monetary obligations of the
Company or any of its Subsidiaries under any leasing or similar arrangement
which is classified as a capital lease in accordance with generally accepted
accounting principles (GAAP) (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board) and, for purposes
of this Agreement, the amount of such obligations shall be the capitalized
amount of such obligation, determined in accordance with GAAP (including such
Statement No. 13).
"Capital Stock" in any person means any and all shares,
interests, participations or other equivalents in the equity (however
designated) in such person and any rights (other than debt securities
convertible into an equity interest), warrants or options to acquire an equity
interest in such person.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties on
such date.
"Common Shares" means the shares of common stock, par value
$.01 per share, of the Company as they exist on the date of this Indenture, or
any other shares of capital stock of the Company into which such shares shall be
reclassified or changed.
"Company" means WellPoint Health Networks Inc., a California
corporation, until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Consolidated Net Tangible Assets" means the aggregate amount
of assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any thereof
constituting Funded Debt by reason of being extendible or renewable), and (b)
all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the books and records of
the Company and its consolidated subsidiaries and computed in accordance with
generally accepted accounting principles.
2.
<PAGE> 11
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of execution of this
Indenture is located at 101 Barclay Street, Floor 21 West, New York, New York
10286.
"covenant defeasance" has the meaning specified in Section
10.1(B).
"defaulted interest" has the meaning specified in Section 2.7.
"Depository" shall mean, with respect to Securities of any
Series for which the Company shall determine that such Securities will be issued
as a Depository Security, The Depository Trust Company, New York, New York, or
another clearing agency or any successor registered under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
which, in each case, shall be designated by the Company pursuant to Sections 2.3
and 2.12.
"Depository Security" shall mean, with respect to any Series
of Securities, a Security 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 Indenture and pursuant to a resolution
of the Board of Directors as contemplated by Section 2.3, which (i) shall be
registered as to principal and interest in the name of the Depository or its
nominee and (ii) shall represent, and shall be denominated in an amount equal to
the aggregate principal amount of, all of the Outstanding Securities of such
Series.
"defeasance" has the meaning specified in Section 10.1(B).
"Dollar" means the coin or currency of the United States of
America which as of the time of payment is legal tender for the payment of
public and private debts.
"Event of Default" has the meaning specified in Section 5.1.
"Funded Debt" means all indebtedness, whether or not evidenced
by a bond, debenture, note or similar instrument or agreement, for the repayment
of money borrowed, having a maturity of more than 12 months from the date of its
creation or having a maturity of less than 12 months from the date of its
creation but by its terms being renewable or extendible beyond 12 months from
such date at the option of the borrower. For the purpose of determining "Funded
Debt" of any corporation, there shall be excluded any particular indebtedness
if, on or prior to the maturity thereof, there shall have been deposited with
the proper depository in trust the necessary funds for the payment, redemption
or satisfaction of such indebtedness.
"Government Obligations" means, unless otherwise specified
pursuant to Section 2.3, securities which are (i) direct obligations of the
United States government or (ii) obligations of a Person controlled or
supervised by, or acting as an agency or instrumentality of, the United States
government, the payment of which obligations is
3.
<PAGE> 12
unconditionally guaranteed by such government, and which, in either case, are
full faith and credit obligations of such government, and which are not callable
or redeemable at the option of the issuer thereof.
"Holder," "Holder of Securities," "Registered Holder,"
"Securityholder" or other similar terms mean the Person in whose name at the
time a particular Security is registered in the Security register.
"Indenture" means this instrument as originally executed or as
it may from time to time be amended or supplemented as herein provided, as so
amended or supplemented or both, and shall include the forms and terms of
particular Series of Securities established as contemplated by Section 2.3.
"Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien (statutory
or other), or preference, priority, or other security or similar agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any agreement to give or grant a Lien or any lease, conditional sale
or other title retention agreement having substantially the same economic effect
as any of the foregoing).
"Officers' Certificate" means a certificate signed on behalf
of the Company by the chairman of the Board of Directors or the vice chairman or
the president or any vice president and by the treasurer, the controller, any
assistant treasurer, the secretary or any assistant secretary of the Company and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 11.5.
"Opinion of Counsel" means a written opinion of legal counsel
who may be an employee of or counsel to the Company and who shall be reasonably
acceptable to the Trustee. Each Opinion of Counsel shall include the statements
provided for in Section 11.5, if and to the extent required hereby.
"Original issue date" of any Security (or portion thereof)
means the date set forth as such on such Security.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof pursuant to Section 5.1.
"Outstanding," when used with reference to Securities, shall,
subject to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
4.
<PAGE> 13
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount and in the required
currency shall have been deposited in trust with the Trustee or with
any Paying Agent (other than the Company) or shall have been set aside,
segregated and held in trust by the Company for the holders of such
Securities (if the Company shall act as its own Paying Agent), provided
that if such securities, or portions thereof, are to be redeemed prior
to the maturity thereof, notice of such redemption shall have been
given as herein provided, or provision satisfactory to the Trustee
shall have been made for giving such notice;
(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.9 (except with respect to any
such Security as to which proof satisfactory to the Trustee and the
Company 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);
(d) Securities converted into Common Shares or Preferred
Shares in accordance with or as contemplated by this Indenture; and
(e) Securities with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article Ten.
"Paying Agent" means any Person (which may include the
Company) authorized by the Company to pay the principal of or interest, if any,
on any Security on behalf of the Company.
"Person" or "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," when used with respect to the Securities
of any Series, means the place or places where the principal of and interest, if
any, on the Securities of that Series are payable as specified pursuant to
Section 3.2.
"Preferred Shares" means, any shares of capital stock issued
by the Company that are entitled to a preference or priority over the Common
Shares upon any distribution of the Company's assets, whether by dividend or
upon liquidation.
"principal" whenever used with reference to the Securities or
any Security or any portion thereof, shall be deemed to include "and premium, if
any."
"Property" means, with respect to any person, any interest of
such person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including, without limitation, Capital Stock in any
other person.
5.
<PAGE> 14
"Responsible Officer" when used with respect to the Trustee
shall mean any officer within the corporate trust department (or any successor
department) of the Trustee including any vice president, assistant vice
president, assistant secretary, senior trust officer, trust officer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred at the
Corporate Trust Office because of his or her knowledge of and familiarity with
the particular subject.
"Sale and Lease-Back Transaction" means, with respect to any
person, any direct or indirect arrangement pursuant to which Property is sold or
transferred by such person or a subsidiary of such person and is thereafter
leased back from the purchaser or transferee thereof by such person or one of
its subsidiaries.
"Secured Debt" means any indebtedness for borrowed money
incurred, assumed or guaranteed after the date of the Indenture by the Company
or a Subsidiary that is secured by a Lien.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any securities
authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means all Securities of a
similar tenor authorized by a particular resolution of the Board of Directors.
"Subsidiary" means (i) a corporation, a majority of whose
capital stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly owned by the
Company, by one or more Subsidiaries of the Company or by the Company and one or
more Subsidiaries of the Company, (ii) a partnership, joint venture or similar
entity in which the Company, a Subsidiary of the Company or the Company and one
or more Subsidiaries of the Company, directly or indirectly, holds a majority
interest in the equity capital or profits or other similar interests of such
entity, or (iii) any other person (other than a corporation) in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such person.
"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof until a successor Trustee shall have become such pursuant
to the provision hereof, and thereafter "Trustee" shall mean or include each
Person who is then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any Series
shall mean the Trustee with respect to Securities of that Series.
6.
<PAGE> 15
"Trust Indenture Act of 1939" or "TIA" (except as otherwise
provided in Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was originally
executed.
"United States of America" means the United States of America
(including the states and the District of Columbia), its territories,
possessions, the Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
"Value" means, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater of (i)
the net proceeds of the sale or transfer of the property leased pursuant to such
Sale and Lease-Back transaction or (ii) the fair value in the opinion of the
Board of Directors (as evidenced by a Board Resolution) of such property at the
time of entering into such Sale and Lease-Back Transaction, in either case
divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination, without regard to any renewal or extension options contained in
the lease.
"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 of "vice president."
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each Series
shall be substantially in such form (including temporary or definitive global
form) as shall be established by or pursuant to a resolution of the Board of
Directors or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture (the provisions of which shall be
appropriate to reflect the terms of the Series of Securities represented
thereby) and may have imprinted or otherwise reproduced thereon such legend or
legends, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing such Securities as
evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities as evidenced by their
execution of such Securities.
7.
<PAGE> 16
SECTION 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
This is one of the Securities of the Series designated herein
and referred to in the within-mentioned Indenture.
The Bank of New York, as
Trustee
By:_______________________________
Authorized Signatory
or
The Bank of New York, as
Trustee
By:______________________________,
as Authentication Agent
By:_______________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more Series. There
shall be established in or pursuant to a resolution of the Board of Directors
and set forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
Series,
(1) the title of the Securities of the Series (which title
shall distinguish the Securities of the Series from all other Securities issued
by the Company);
(2) any limit upon the aggregate principal amount of the
Securities of the Series that may be 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 2.8, 2.9, 2.11, 8.5 or 12.3);
8.
<PAGE> 17
(3) if other than 100% of their principal amount, the
percentage of their principal amount at which the Securities of the Series will
be offered for sale to the public;
(4) the date or dates on which the principal of the Securities
of the Series is payable or the method of determination thereof;
(5) the rate or rates (which may be fixed or variable), or the
method or methods of determination thereof, at which the Securities of the
Series shall bear interest, if any, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be payable
and the record dates for the determination of Holders to whom interest is
payable;
(6) the place or places where the principal and interest, if
any, on Securities of the Series shall be payable (if other than as provided in
Section 3.2);
(7) the price or prices at which, the period or periods within
which and the terms and conditions upon which Securities of the Series may be
redeemed, in whole or in part, at the option of the Company;
(8) if other than the principal amount thereof, the portion of
the principal amount of Securities of the Series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 5.1 or
provable in bankruptcy pursuant to Section 5.2;
(9) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the Series whether pursuant to any sinking fund or
analogous provisions or pursuant to other provisions set forth therein or at the
option of a Holder thereof and the price or prices at which and the period or
periods within which and the terms and conditions upon which Securities of the
Series shall be redeemed, purchased or repaid, in whole or in part;
(10) if other than denominations of $1,000, and any integral
multiple thereof, the denominations in which Securities of the Series shall be
issuable;
(11) the form of the Securities, including such legends as
required by law or as the Company deems necessary or appropriate and the form of
any temporary global security which may be issued;
(12) whether, and under what circumstances, the Securities of
any Series shall be convertible into Securities of any other Series and, if so,
the terms and conditions upon which such conversion will be effected including
the initial conversion price or rate, the conversion period and other provisions
in addition to or in lieu of those described herein;
9.
<PAGE> 18
(13) if other than the Trustee, any trustees, authenticating
or Paying Agents, transfer agents or registrars or any other agents with respect
to the Securities of such Series;
(14) if the Securities of such Series do not bear interest,
the applicable dates for purposes of Section 4.1 hereof;
(15) whether the Securities of such Series are to be issuable
in whole or in part in the form of one or more Depository Securities, and, in
such case, the Depository for such Securities;
(16) the application, if any, of either or both of Section
10.1(B)(ii) or 10.1(B)(iii) to the Securities of the Series;
(17) the obligation, if any, of the Company to permit the
conversion of the Securities of such Series into the Company's Common Shares or
Preferred Shares (and the class thereof), as the case may be, and the terms and
conditions upon which such conversion shall be effected (including, without
limitation, the initial conversion price or rate, the conversion period, any
adjustment of the applicable conversion price or rate and any requirements
relative to reservation of shares for purposes of conversion; and
(18) any other terms or conditions upon which the Securities
of the Series are to be issued (which terms shall not be inconsistent with the
provisions of this Indenture).
All Securities of any one Series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such resolution of the Board of Directors or in any such
indenture supplemental hereto. All Securities of any one Series need not be
issued at the same time, and unless otherwise provided, a Series may be reopened
for issuances of additional Securities of such Series.
SECTION 2.4 Authentication and Delivery of Securities. At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Securities of any Series executed by the Company to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery such Securities to or upon the written order of the
Company, signed by both (a) the chairman of its Board of Directors, or its
president or any vice president and (b) its treasurer or any assistant
treasurer, secretary or any assistant secretary without any further action by
the Company. In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee
10.
<PAGE> 19
shall be entitled to receive and (subject to Section 6.1) shall be fully
protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of
Directors relating to such Series, in each case certified by the secretary or an
assistant secretary of the Company;
(2) a supplemental indenture, if any;
(3) an Officers' Certificate setting forth the form and terms
of the Securities of such Series as required pursuant to Sections 2.1 and 2.3,
respectively, and prepared in accordance with Section 11.5; and
(4) an Opinion of Counsel, prepared in accordance with Section
11.5, which shall state
(a) that the form or forms and terms of such
Securities have been established by or pursuant to a resolution of the
Board of Directors or by a supplemental indenture as permitted by
Sections 2.1 and 2.3 in conformity with the provisions of this
Indenture and in conformity with such resolution; and
(b) that such Securities have been duly authorized,
and, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such
opinion of counsel, will constitute valid and binding obligations of
the Company enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other laws relating to or affecting the enforcement
of creditors' rights generally and by general equitable principles,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
The Trustee shall have the right to decline to authenticate
and deliver any Securities under this Section if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under this Indenture in a manner not reasonably acceptable to the
Trustee.
SECTION 2.5 Execution of Securities. The Securities shall be
signed on behalf of the Company by both (a) the chairman of its Board of
Directors or its president or any vice president and (b) its treasurer or any
assistant treasurer or its secretary or any assistant secretary, under its
corporate seal which may, but need not, be attested. Such signatures may be the
manual or facsimile signatures of such officers. The seal of the Company may be
in the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical and other minor errors or
defects in any such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
11.
<PAGE> 20
In case any officer of the Company who shall have signed any
of the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to be
such officer of the Company; and any Security may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Company, although at the date of
the execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited and executed by the Trustee by the manual
signature of one of its authorized signatories shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate by
the Trustee upon any Security executed by the Company shall be conclusive
evidence that the Security so authenticated has been duly authenticated and
delivered hereunder and that the Holder is entitled to the benefits of this
Indenture.
Notwithstanding the foregoing, if any Security shall have been
duly authenticated and delivered hereunder but never issued and sold by the
Company, the Company shall deliver such Security to the Trustee for cancellation
as provided in Section 2.10 together with a written statement (which need not
comply with Section 11.5 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of the Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of the Indenture.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities shall be issuable in denominations as shall be
specified as contemplated by Section 2.3. In the absence of any such
specification with respect to the Securities of any Series, Securities shall be
issuable in denominations of $1,000 and any integral multiple thereof, and
interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The Securities shall be numbered, lettered, or otherwise distinguished
in such manner or in accordance with such plan as the officers of the Company
executing the same may determine with the approval of the Trustee as evidenced
by the execution and authentication thereof.
Each Security shall be dated the date of its authentication.
Unless otherwise provided as contemplated by Section 2.3,
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 the payment of such interest.
12.
<PAGE> 21
The term "record date" as used with respect to any interest
payment date (except for a date for payment of defaulted interest) shall mean
the date specified as such in the terms of the Securities of any particular
Series, or, if no such date is so specified, the close of business on the
fifteenth day preceding such interest payment date, whether or not such record
date is a Business Day.
Any interest on any Security of any Series which is payable,
but is not punctually paid or duly provided for, on any interest payment date
(called "defaulted interest" for purposes of this Section) shall forthwith cease
to be payable to the Registered Holder on the relevant record date by virtue of
his having been such Holder; and such defaulted interest may be paid by the
Company, at its election in each case, as provided in clause (1) or clause (2)
below:
(1) 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 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 Security of such Series
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 in respect of Securities of such Series 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 thereof to be mailed, first class postage prepaid, to each
Registered Holder 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 in respect of Securities of
such Series shall be paid to the persons in whose names such Securities (or
their respective predecessor Securities) are registered on such special record
date and such defaulted interest shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any defaulted interest on
the Securities of any Series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of that
Series 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 payment shall be deemed practicable by the
Trustee.
13.
<PAGE> 22
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon 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 2.8 Registration, Transfer and Exchange. The Company
will cause to be kept at each office or agency to be maintained for the purpose
as provided in Section 3.2 a register or registers in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for the
registration and the registration of the transfer of, the Securities. The
Trustee is hereby appointed Security registrar for purposes of registering, and
registering transfers of, the Securities.
Upon surrender for registration of transfer of any Security of
any Series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Company shall execute and the Trustee shall
authenticate and make available for delivery in the name of the transferee or
transferees a new Security or Securities of the same Series and of a like tenor
and containing the same terms (other than the principal amount thereof, if more
than one Security is executed, authenticated and delivered with respect to any
security so presented, in which case the aggregate principal amount of the
executed, authenticated and delivered Securities shall equal the principal
amount of the Security presented in respect thereof) and conditions.
All Securities issued upon any 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 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.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Securities, other than exchanges
pursuant to Sections 2.11, 8.5 or 12.3 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a 15-day period prior to the day of
mailing of the relevant notice of redemption or (ii) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except,
in the case of any Security to be redeemed in part, the portion thereof not
redeemed.
14.
<PAGE> 23
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become mutilated
or defaced or be destroyed, lost or stolen, the Company shall execute, and upon
the written request of any officer of the Company, the Trustee shall
authenticate and make available for delivery a new Security of the same Series
and of like tenor and principal amount and with the same terms and conditions,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated or defaced Security or in lieu of and substitution for the
Security so destroyed, lost or stolen. In every case the applicant for a
substitute Security shall furnish to the Company and to the Trustee and to any
agent of the Company or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security, 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. In case any Security
which has matured or is about to mature or has been called for redemption in
full shall become mutilated or defaced or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
or defaced Security); provided, however, that unless otherwise provided pursuant
to Section 2.3, the applicant for such payment shall furnish to the Company and
to the Trustee and any agent of the Company or the Trustee such security or
indemnity as any of them may require to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee and any agent of the Company or the Trustee evidence
to their satisfaction of the destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security of any Series issued pursuant to the
provisions of this Section by virtue of the fact that any Security is destroyed,
lost or stolen shall constitute an 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 (but
shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such Series
duly authenticated and delivered hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, destroyed, lost or stolen Securities and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities. All Securities
surrendered for payment, redemption, registration of transfer or exchange, or
for credit against any payment in respect of a sinking or analogous fund, shall,
if surrendered to the Company
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or any agent of the Company or the Trustee, be delivered to the Trustee for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no
Securities shall be issued in lieu thereof, except as expressly permitted by any
of the provisions of this Indenture. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated hereunder which
the Company has not issued and sold and all Securities so delivered shall be
promptly cancelled by the Trustee. The Trustee shall return cancelled Securities
held by it to the Company. If the Company shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any Series, the Company may execute and the Trustee
shall authenticate and make available for delivery temporary Securities for such
Series (printed, lithographed, typewritten or otherwise reproduced, in each case
in form reasonably acceptable to the Trustee). Temporary Securities of any
Series may be issued of any authorized denomination, and substantially in the
form of the definitive Securities of such Series but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as
may be determined by the Company with the reasonable concurrence of the Trustee.
Temporary Securities may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Security shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Company shall execute and shall
furnish definitive securities of such Series and thereupon temporary Securities
of such Series may be surrendered in exchange therefor without charge at each
office or agency to be maintained by the Company for that purpose pursuant to
Section 3.2, and the Trustee shall authenticate and make available for delivery
in exchange for such temporary Securities of such Series a like aggregate
principal amount of definitive Securities of the same Series of authorized
denominations. Until so exchanged, the temporary Securities of any Series shall
be entitled to the same benefits under this Indenture as definitive Securities
of such Series.
SECTION 2.12 Securities in Global Form. If Securities of a
Series are issuable in global form, as specified as contemplated by Section 2.3,
then, notwithstanding clause (10) of Section 2.3 and the provisions of Section
2.7, such Security shall represent such of the Outstanding Securities of such
series as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Outstanding Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby may be made by the Trustee in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company order to be delivered to the Trustee
pursuant to Section 2.4. Subject to the provisions of Section 2.4, the Trustee
shall deliver and redeliver any Security in definitive global form in the manner
and upon
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written instructions given by the Person or Persons specified therein or in the
applicable Company order. If a Company order pursuant to Section 2.4 has been,
or simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 11.5 and need not be accompanied by an
Opinion of Counsel.
The provisions of the last sentence of Section 2.6 shall apply
to any Security represented by a Security in global form if such Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 11.5 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 2.6.
Notwithstanding the provisions of Sections 2.3 and 2.7, unless
otherwise specified as contemplated by Section 2.3, payment of principal of and
any interest on any Security in definitive global form shall be made to the
Person or Persons specified therein.
Except as provided in the preceding paragraph, the Company,
the Trustee and any agent of the Company and the Trustee shall treat a Person as
the Holder of such principal amount of outstanding Securities represented by a
definitive global Security as shall be specified in a written statement of the
Holder of such definitive global Security.
SECTION 2.13 CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
COVENANTS OF THE COMPANY
SECTION 3.1 Payment of Principal and Interest. The Company
covenants and agrees for the benefit of each particular Series of Securities
that it will duly and punctually pay or cause to be paid the principal of, and
interest on, each of the Securities of such Series in accordance with the terms
of the Securities of such Series and this Indenture.
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SECTION 3.2 Offices for Payment, Etc. So long as any of the
Securities remain outstanding, the Company will maintain the following for each
Series: an office or agency (a) where the Securities may be presented for
payment or conversion, (b) where the Securities may be presented for
registration of transfer and for exchange as in this Indenture provided, and (c)
where notices and demands to or upon the Company in respect of the Securities or
of this Indenture may be served. The Company will give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. In case the Company shall fail to so designate or maintain any
such office or agency or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the Corporate Trust Office. Unless otherwise specified
pursuant to Section 2.3, the Trustee is hereby appointed Paying Agent.
SECTION 3.3 Paying Agents. Whenever the Company shall appoint
a Paying Agent other than the Trustee with respect to the Securities of any
Series, it will cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such Agent
for the payment of the principal of or interest on the Securities of such Series
(whether such sums have been paid to it by the Company or by any other obligor
on the Securities of such Series) in trust for the benefit of the Holders of the
Securities of such Series or of the Trustee, and upon the occurrence of an Event
of Default and upon the written request of the Trustee, pay over all such sums
received by it to the Trustee, and
(b) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities of such series) to make any
payment of the principal of or interest on the Securities of such Series when
the same shall be due and payable.
The Company will, on or prior to each due date of the
principal of or interest on the Securities of such Series, deposit in a timely
manner with the Paying Agent a sum sufficient to pay such principal or interest
so becoming due, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect
to the Securities of any Series, it will, on or before each due date of the
principal of or interest on the Securities of such Series, set aside, segregate
and hold in trust for the benefit of the Holders of the Securities of such
Series a sum sufficient to pay such principal or interest so becoming due. The
Company will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the
Company may at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of Securities hereunder, or
for any other reason, pay or cause to be
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paid to the Trustee all sums held in trust for any such Series by the Company or
any Paying Agent hereunder, as required by this Section, such sums to be held by
the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.4 Written Statement to Trustee. The Company shall
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, a brief certificate (which need not comply
with Section 11.5) from the principal executive, financial or accounting officer
of the Company as to his or her knowledge, after due inquiry, of the Company's
compliance with all conditions and covenants under the Indenture (such
compliance to be determined without regard to any period of grace or requirement
of notice provided under the Indenture).
SECTION 3.5 Waiver of Certain Covenants. The Company may omit
in any particular instance to comply with any term, provision or condition set
forth in Section 3.6 or 3.7 with respect to the Securities of any Series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such Series shall either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision 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 term, provision or condition shall remain in
full force and effect.
SECTION 3.6 Limitation on Liens. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any Property of the Company or
such Subsidiary or any interest therein or any income or profits therefrom,
unless the Securities are secured equally and ratably with (or prior to) any and
all other indebtedness secured by such Lien, except for:
(1) any Lien arising in the ordinary course of business, other
than in connection with indebtedness for borrowed money;
(2) any Lien on Property acquired by the Company or any
Subsidiary after the date of issuance of the Securities, provided that
such Lien existed on the date such Property was acquired;
(3) any Lien existing on the date of the Indenture;
(4) any Lien securing indebtedness incurred to finance the
purchase price or cost of construction of Property (or additions,
substantial repairs, alterations or substantial improvements thereto),
provided that such Lien and the
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indebtedness secured thereby are incurred within one year of the later
of acquisition or completion of construction (or addition, repair,
alteration or improvement) and full operation thereof;
(5) any Liens arising out of judgments or awards made against
the Company or any Subsidiary having an outstanding principal amount
which do not exceed $20 million in the aggregate or with respect to
which the Company or such Subsidiary shall in good faith be prosecuting
an appeal or proceedings for review, Liens which are discharged within
60 days of entry of judgment or Liens incurred by the Company or a
Subsidiary for the purpose of obtaining a stay or discharge in the
course of any legal proceeding to which the Company or such Subsidiary
is a party;
(6) any Lien for taxes not yet due and payable by the Company
or any Subsidiary or which the Company or such Subsidiary is contesting
in good faith;
(7) any Lien on or with respect to Property of a Subsidiary in
favor of the Company or another Subsidiary;
(8) short-term repurchase agreements covering portfolio
securities;
(9) any Lien securing indebtedness in respect of Capital
Leases on the Property subject to such Capital Leases;
(10) deposits, reserves or contingent payment or arrangements
required under or pursuant to any applicable provisions of federal,
state or local rules, regulations or ordinances regarding health
maintenance organizations, providers of life, health care or disability
insurance or the provision of health care services or such insurance or
the management of health care services or securing regulatory capital
or other financial responsibility requirements;
(11) any Lien (other than a Lien permitted under any of
clauses (1) through (10) of this paragraph) securing indebtedness of
the Company or of any Subsidiary provided that the aggregate principal
amount of all Secured Debt together with all Attributable Debt of the
Company and its Subsidiaries in respect of Sale and Lease-Back
Transactions may not exceed 15% of Consolidated Net Tangible Assets of
the Company and its Subsidiaries;
(12) any Lien extending, renewing or replacing any Lien
permitted by clause (1) through (11) above; and
(13) any Lien securing indebtedness the proceeds of which are
deposited, promptly upon receipt, with the Trustee solely for the
purpose of effecting a legal defeasance or covenant defeasance as set
forth under "Satisfaction and Discharge of Indenture" and "Defeasance."
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In the case of Liens permitted under clauses (2) and (4), such
Liens may not relate to any Property of the Company or a Subsidiary other than
the Property so acquired, constructed, added, repaired, altered or improved, as
the case may be. In the case of Liens permitted under clause (12), unless such
Liens are otherwise permitted under clause (11), such Liens (A) may not relate
to any Property of the Company or a Subsidiary other than the Property to which
the Lien being extended, renewed or replaced related to, and (B) may not secure
indebtedness in excess of that secured by the Lien being extended, renewed or
replaced.
SECTION 3.7 Limitation on Sale and Lease-Back Transactions.
The Company will not, nor will it permit any Subsidiary to, directly or
indirectly, enter into, assume, guarantee, or otherwise become liable with
respect to any Sale and Lease-Back Transaction; provided, however, that the
Company or any Subsidiary may enter into:
(1) a Sale and Lease-Back Transaction that, had such Sale and
Lease- Back Transaction been structured as a mortgage rather than as a
Sale and Lease- Back Transaction, the Company or such Subsidiary would
have been permitted to enter into such transaction pursuant to the
terms of the Indenture described under Section 3.6,
(2) a Sale and Lease-Back Transaction between or among the
Company and any of its Subsidiaries or between or among Subsidiaries,
(3) a Sale and Lease-Back Transaction entered into prior to
the date of issuance of the Securities,
(4) a Sale and Lease-Back Transaction, provided that within
180 days of the effective date of any such Sale and Lease-Back
Transaction, the Company or such Subsidiary shall apply an amount equal
to the Value of such Sale and Lease- Back Transaction to the (A)
retirement (other than any mandatory retirement and other than any
prohibited retirement of securities) of indebtedness for borrowed money
incurred or assumed by the Company or any Subsidiary (other than
indebtedness for borrowed money owed to the Company or any Subsidiary)
which by its terms matures on, or is extendable or renewable at the
option of the obligor to, a date more than 12 months after the date of
the creation of such indebtedness and, in the case of such indebtedness
of the Company which ranks on a parity with, or senior in right of
payment to, the Securities or (B) the purchase or construction of other
Property, provided that such Property is owned by the Company or a
Subsidiary free and clear of all Liens,
(5) a Sale and Lease-Back Transaction involving the taking
back of a lease for a period of three years or less, or
(6) a Sale and Lease-Back Transaction, provided that after
giving effect to the Sale and Lease-Back Transaction, the aggregate
principal amount of all Secured Debt plus Attributable Debt of the
Company and its Subsidiaries in
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respect of Sale and Leaseback Transactions would not exceed 15% of the
Consolidated Net Tangible Assets of the Company and its Subsidiaries.
SECTION 3.8 Calculation of Original Issue Discount. The
Company shall file with the Trustee promptly at the end of each calendar year a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on Outstanding Securities as of the end of
such year.
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND
REPORTS BY THE COMPANY
SECTION 4.1 Company to Furnish Trustee Information as to Names
and Addresses of Securityholders. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Securities of each Series:
(a) semiannually and not more than 15 days after each record
date for the payment of interest on such Securities, as hereinabove specified,
as of such record date, and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after receipt by the Company of any such request,
such list to be as of a date not more than 15 days prior to the time such
information is furnished, provided that if and so long as the Trustee shall be
the Security registrar for such Series, such list shall not be required to be
furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders'
Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of each Series of Securities contained in the most recent list furnished
to it as provided in Section 4.1 or maintained by the Trustee in its capacity as
Security registrar for such Series, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) In case 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 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 a particular Series (in which
case the applicants must all hold Securities of such Series) or with Holders of
all Securities with respect to their rights under this Indenture or under such
Securities and such application is accompanied by a copy of the form of proxy or
other
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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 to such applicants access to the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, 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 the provisions
of subsection (a) of this Section, 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 to such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such Series or all Securities, as the
case may be, whose name and address appear in the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section, 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 Securities, as the case may
be, or could 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 such 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 all such Securityholders 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) Each and every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of the Company or 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 the
provisions of subsection (b) of this Section, 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
such subsection (b).
SECTION 4.3 Reports by the Company. The Company covenants:
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(a) to file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the annual reports
and of the information, documents, and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended, or if the Company is not required to file information,
documents, or reports pursuant to either of such Sections, then to file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents, and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934, as amended, or in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents, and reports with respect to compliance by the
Company with the conditions and covenants provided for in this Indenture as may
be required from time to time by such rules and regulations; and
(c) to transmit by mail to the Holders of Securities in the
manner and to the extent required by Section 6.6, within 30 days after the
filing thereof with the Trustee, such summaries of any information, documents,
and reports required to be filed by the Company pursuant to subsections (a) and
(b) of this Section as may be required to be transmitted to such Holders by
rules and regulations prescribed from time to time by the Commission.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default. "Event of Default," with respect to Securities of
any Series wherever used herein, means any one of the following events which
shall have occurred and be continuing (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,
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decree or order of any court or any order, rule or regulation of any
administrative or governmental body) unless it is either inapplicable to a
particular Series or it is specifically deleted or modified in or pursuant to
the supplemental indenture or resolution of the Board of Directors establishing
such Series of Securities or in the form of Security for such Series:
(a) default in the payment of any installment of interest upon
any of the Securities of such Series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal
of any of the Securities of such Series as and when the same shall become due
and payable, either at maturity, upon any redemption, by declaration or
otherwise; or
(c) default in the performance, or breach of any covenant or
warranty of the Company contained in the Securities of such Series or in this
Indenture (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of a Series of
Securities other than that Series), 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
that 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
(d) default under any bond, debenture, note or other evidence
of indebtedness of the Company or any Subsidiary, or under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness of the Company or any Subsidiary, whether
such indebtedness now exists or is hereafter created, which default involves the
failure to pay principal on indebtedness at the final maturity thereof after the
expiration of any applicable grace period with respect thereto, or which has
resulted in indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise become due and payable in an aggregate amount
in excess of $30,000,000;
(e) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company 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 for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
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(f) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for the
benefit of creditors; or
(g) any other Event of Default provided with respect to
Securities of such Series in the supplemental indenture or resolution of the
Board of Directors establishing such Series.
If an Event of Default occurs and is continuing with respect to the Securities
of any Series, then and in each and every such case, unless the principal of all
Securities of such Series shall have already become due and payable, either the
Trustee for such Series or the Holders of not less than 25% in aggregate
principal amount at maturity of the Securities of such Series then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Holders), may declare the principal of all the Securities of such Series to
be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable. This provision, however, is
subject to the condition that if at any time after the principal of the
Securities of such Series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all the Securities of such Series and the principal of
any and all Securities of such Series which shall have become due otherwise than
by such acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, upon overdue
installments of interest, at the rate borne by the Securities of such Series to
the date of such payment or deposit) and in Dollars such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel and all other expenses and liabilities incurred, and all
advances made, by the Trustee, its agents, attorneys and counsel and any and all
defaults under this Indenture, other than the nonpayment of the principal of
Securities of such Series which shall have become due by such acceleration,
shall have been remedied, then and in every such case the Holders of a majority
in aggregate principal amount at maturity of the Securities of such Series then
Outstanding, by written notice to the Company and to the Trustee for the
Securities of such Series, may waive all defaults and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
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SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt. The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any Series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days, or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
Series when the same shall have become due and payable, whether upon maturity of
the Securities of such Series or upon any redemption or by declaration or
otherwise, then upon demand of the Trustee for the Securities of such Series,
the Company will pay to the Trustee for the Securities of such Series for the
benefit of the Holders of the Securities of such Series the whole amount that
then shall have become due and payable on all Securities of such Series for
principal of or interest, as the case may be (with interest to the date of such
payment upon the overdue principal and, to the extent that payment of such
interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest specified in the Securities of
such Series); and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including reasonable
compensation to, and all expenses and liabilities incurred and all advances made
by, the Trustee and each predecessor Trustee and their respective agents,
attorneys and counsel.
Until such demand is made by the Trustee, the Company may pay
the principal of and interest on the Securities of any Series to the persons
entitled thereto, whether or not the principal of and interest on the Securities
of such Series are overdue.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee for the Securities of such series, in its own name
and as trustee of an express trust, shall be entitled and empowered to institute
any action or proceedings at law or in equity for the collection of the sums so
due and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or other obligor upon such Securities and collect in the manner provided
by law out of the property of the Company or other obligor upon such Securities,
wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the
Company or any other obligor upon the Securities under Title 11 of the United
States Code or any other applicable Federal or State bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Company or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to the
Company or other obligor under the Securities of any Series, or to the creditors
or property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of any 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 pursuant to the provisions of this Section,
shall be entitled and empowered, by intervention in such proceedings or
otherwise:
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(a) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Securities of any
Series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to, and all expenses and liabilities incurred and all
advances made by, the Trustee and each predecessor Trustee, and their respective
agents, attorneys and counsel) and of the Securityholders allowed in any
judicial proceedings relative to the Company or other obligor upon all
Securities of any Series, or to the creditors or property of the Company or such
other obligor, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Holders to make payments to
the Trustee for the Securities of such Series, and, in the event that such
Trustee shall consent to the making of payments directly to the Securityholders,
to pay to such Trustee such amounts as shall be sufficient to cover reasonable
compensation to, and all expenses and liabilities incurred and all advances made
by, such Trustee, each predecessor Trustee and their respective agents,
attorneys and counsel and all other amounts due to such Trustee or any
predecessor Trustee pursuant to Section 6.7.
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 of any Series 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.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee for
the Securities of such Series without the possession of any of the Securities of
such Series or the production thereof at any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Securities in
respect of which such action was taken.
In any proceedings brought by the Trustee for the Securities
of such Series (and also any proceedings involving the interpretation of any
provision of this Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the Holders of the Securities in respect of which
such action was taken, and it shall not be necessary to make any Holders of such
Securities parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by
the Trustee for the Securities of such Series pursuant to this Article in
respect of the
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Securities of any series shall be applied in the following order at the date or
dates fixed by such Trustee and, in case of the distribution of such moneys on
account of principal or interest, upon presentation of the several Securities in
respect of which moneys have been collected and stamping (or otherwise noting)
thereon the payment, or issuing Securities of such Series in reduced principal
amounts in exchange for the presented Securities of like Series if only
partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such
Series in respect of which moneys have been collected, including reasonable
compensation to, and all expenses and liabilities incurred and all advances made
by, the Trustee and each predecessor Trustee and their respective agents and
attorneys and all other amounts due to the Trustee or any predecessor Trustee
pursuant to Section 6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities of such Series in respect of which
moneys have been collected, such payments to be made ratably to the persons
entitled thereto, without discrimination or preference, according to the amounts
then due and payable on such Securities for principal and interest; and
THIRD: To the payment of the remainder, if any, to the Company
or any other Person lawfully entitled thereto.
SECTION 5.4 Restoration of Rights on Abandonment of
Proceedings. In case the Trustee for the Securities of any Series shall have
proceeded to enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case, subject to the
determination in any such proceeding, the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
SECTION 5.5 Limitations on Suits by Securityholders. No Holder
of any Security of any Series shall have any right by virtue or by availing of
any provision of this Indenture to institute any action or proceeding at law or
in equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of an Event of Default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of not less than 25% in aggregate principal amount of the Securities of
such Series then Outstanding shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee indemnity reasonable to it as it may require,
against the costs, expenses and liabilities to be incurred therein or thereby
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute any such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee during such 60-day period by Holders of a
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majority in principal amount of the Securities of such Series then Outstanding;
it being understood and intended, and being expressly covenanted by the taker
and Holder of every Security with every other taker and Holder of a Security and
the Trustee, that no one or more Holders of Securities of any Series shall have
any right in any manner whatever, by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other such
Holder of Securities, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
Holders of Securities of the applicable Series.
SECTION 5.6 Unconditional Right of Securityholders to
Institute Certain Suits. Notwithstanding any provision in this Indenture and any
provision of any Security, the right of any Holder of any Security to receive
payment of the principal of and (subject to Section 2.7) interest on such
Security at the respective rates, in the respective amount on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 5.7 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default. Except as provided in Section 2.9 and Section 5.5, 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 given 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.
No delay or omission of the Trustee or of any Securityholder
to exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.5, every power and remedy given by this
Indenture or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
the Securityholders.
SECTION 5.8 Control by Securityholders. The Holders of a
majority in aggregate principal amount of the Securities of each Series affected
(with each Series treated as a separate class) at the time Outstanding 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 by
this Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that the Trustee shall have the right to decline to follow any such direction if
the Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the
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actions or forbearances specified in or pursuant to such direction would be
unduly prejudicial to the interests of Holders of the Securities of all Series
so affected not joining in the giving of said direction, it being understood
that the Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.
SECTION 5.9 Waiver of Past Defaults. The Holders of a majority
in aggregate principal amount of the Securities of such Series at the time
outstanding may on behalf of the Holders of all the Securities of such Series
waive any past default hereunder or its consequences, except a default in the
payment of the principal of or interest on any of the Securities of such Series.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 5.10 Right of Court to Require Filing of Undertaking
to Pay 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, suffered 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 and expenses, 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 of any Series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such Series, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security.
SECTION 5.11 Suits for Enforcement. In case an Event of
Default has occurred, has not been waived and is continuing, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing with
respect to the Securities of any Series, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default with
respect to the Securities of any Series:
(1) the Trustee need perform only those duties that
are specifically set forth in this Indenture and the Trustee shall not
be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, 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 examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 6.1;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.8.
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(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section
6.1.
(e) No provision of this Indenture shall require the Trustee
to extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder 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 6.2 Rights of Trustee.
(a) The Trustee may rely on, and shall be protected in relying
upon, any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) Subject to the provisions of Section 6.1(c), the Trustee
shall not be liable for any action it takes or omits to take in good faith which
it believes to be authorized or within its rights or powers.
(d) Before the Trustee acts or refrains from acting the
Trustee may consult with counsel of its selection and the 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 in accordance with such advice or Opinion
of Counsel.
(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 Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee indemnity reasonable to it against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(f) 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.
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(g) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, Officers' Certificate, or other certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless requested
in writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Securities then outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such examination shall be paid by
the Company or, if advanced by the Trustee, shall be repaid by the Company upon
demand.
(h) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(i) The Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions or agreements on
the part of the Company, except as otherwise set forth herein, but the Trustee
may require of the Company full information and advice as to the performance of
the covenants, conditions and agreements contained herein and shall be entitled
in connection herewith to examine the books, records and premises of the
Company.
(j) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or willful default.
(k) Except for (i) a default under Sections 5.1(a) or (b)
hereof, or (ii) any other event of which the Trustee has "actual knowledge" and
which event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any default or event unless specifically notified in
writing of such event by the Company or the Holders of not less than 25% in
aggregate principal amount of the Securities Outstanding; as used herein, the
term "actual knowledge" means the actual fact or statement of knowing, without
any duty to make any investigation with regard thereto.
SECTION 6.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, registrar or
co-registrar may do the same with like rights.
However, the Trustee must comply with Sections 6.10 and 6.11.
SECTION 6.4 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be
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accountable for the Company's use of the proceeds from the Securities, it shall
not be responsible for any statement in the registration statement for the
Securities under the Securities Act of 1933, as amended, or in the Indenture or
the Securities (other than its certificate of authentication).
SECTION 6.5 Notice of Defaults. If a default occurs and is
continuing with respect to any Securities of any Series and if the Trustee has
actual knowledge of such default, the Trustee shall give to each Securityholder
of such Series notice of the default within 90 days after such default occurs.
Except in the case of a default described in Section 5.1(a) or (b), the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of such Series.
SECTION 6.6 Reports by Trustee to Holders. Within 60 days
after each July 15 beginning with the July 15 following the date of this
Indenture, the Trustee shall mail to each Securityholder of any Series and each
other person specified in TIA Section 313(c) a brief report dated as of such
July 15 that complies with TIA Section 313(a) to the extent required thereby.
The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the Commission and each
securities exchange on which the Securities of any Series are listed. The
Company agrees promptly to notify the Trustee whenever the Securities of any
Series become listed on any securities exchange and of any delisting thereof.
SECTION 6.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time, and the Trustee
shall be entitled to, in Dollars such compensation as shall be agreed to in
writing between the Company and the Trustee 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) 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, advances and disbursements of its agents and
counsel), except to the extent any such expense, disbursement or advance may be
attributable to its negligence or willful misconduct; and
(c) to indemnify the Trustee in Dollars for, and to hold it
harmless against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based on the income of the Trustee) arising
out of or in connection with the acceptance or administration of this trust or
the performance of its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim or
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liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent that any such loss, liability or expense
may be attributable to its negligence or willful misconduct.
As security for the performance of the obligations of the
Company in this Section 6.7, the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee, except
that held in trust to pay the principal of or interest, if any, on particular
Securities.
"Trustee" for purpose of this Section 6.7 includes any
predecessor trustee, provided that the negligence or bad faith of any Trustee
shall not be attributable to any other Trustee.
The Company's payment obligations pursuant to this Section 6.7
shall constitute additional indebtedness hereunder and shall survive the
discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a default specified in Sections 5.1(d) and 5.1(e), such expenses
(including reasonable fees and expenses of its counsel) are intended to
constitute expenses of administration under bankruptcy law.
SECTION 6.8 Replacement of Trustee. The Trustee may resign at
any time with respect to Securities of one or more Series by so notifying the
Company; provided, however, no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this Section 6.8. The
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any Series may remove the Trustee with respect to such Series at
the time outstanding by so notifying the Trustee and the Company. The Company
shall remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, with respect to the Securities of one or
more Series, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee with respect to the Securities of such Series.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture with respect to the Securities of such Series. The
successor Trustee shall mail a notice of its succession to
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Securityholders so affected. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 6.7.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
SECTION 6.9 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
SECTION 6.10 Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a)(1). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. Neither the Company nor
any person directly or indirectly controlling, controlled by or under common
control with the Company shall serve as Trustee hereunder. The Trustee shall
comply with TIA Section 310(b).
SECTION 6.11 Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by a specified percentage in principal amount of the Securityholders of any or
all Series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage of
Securityholders in person or by 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. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
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conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Article.
(b) The ownership of Securities shall be proved by the
Security register.
SECTION 7.2 Proof of Execution of Instruments. Subject to
Sections 6.1 and 6.2, the execution of any instrument by a Securityholder or his
agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.
SECTION 7.3 Holders to Be Treated as Owners. The Company, the
Trustee and any agent of the Company or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security register
for such Series as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of and interest on such Security and for all other purposes; and
neither the Company nor the Trustee nor any agent of the Company or the Trustee
shall be affected by any notice to the contrary. All such payments so made to
any such person, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Security.
SECTION 7.4 Securities Owned by Company Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have concurred
in any direction, consent or waiver under this Indenture, Securities which are
owned by the Company or any other obligor on the Securities with respect to
which such determination is being made or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities with respect to which such
determination is being made shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver only Securities which the Trustee actually
knows are so owned 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 so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Securities.
SECTION 7.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all Series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the
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Holders of which have consented to such action may, by filing written notice at
the Corporate Trust Office and upon proof of holding as provided in this
Article, revoke such action so far as concerns such Security. Except as
aforesaid any such action taken by the Holder of any Security shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of such Security and of any Securities issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon any such Security. Any action taken by the Holders of the percentage in
aggregate principal amount of the Securities of any or all Series, as the case
may be, specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the Holders of all the
Securities affected by such action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Company, when authorized by a resolution of its Board of
Directors, and the Trustee for the Securities of any and all Series may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of the execution thereof), in form satisfactory to such
Trustee, for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more Series any property or
assets;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article Nine;
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of the
Holders of Securities of any or all Series and, if such additional covenants are
to be for the benefit of less than all the Series of Securities, stating that
such covenants are being added solely for the benefit of such Series;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to matters or
questions arising under this Indenture or under any supplemental indenture as
the Board of Directors may deem necessary or desirable and which shall not
materially and adversely affect the interests of the Holders of the Securities;
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(e) to establish the form or terms of Securities of any Series
as permitted by Sections 2.1 and 2.3; or
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
Series 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 the one Trustee, pursuant to the requirements of Section
6.8.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each Series affected by such supplemental
indenture (voting as one class), the Company, when authorized by a resolution of
its Board of Directors, and the Trustee for such Series of Securities may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of each such Series; provided,
however, that no such supplemental indenture shall (a) extend the final maturity
of any Security, or reduce the principal amount thereof or any premium thereon,
or reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof, or impair or affect the right of any
Securityholder to institute suit for payment thereof or, if the Securities
provide therefor, any right of repayment at the option of the Securityholder
without the consent of the Holder of each Security so affected, or (b) reduce
the aforesaid percentage of Securities of any Series, the consent of the Holders
of which is required for any such supplemental indenture, without the consent of
the Holders of each Security so affected, or (c) reduce the amount of principal
payable upon acceleration of the maturity of any Original Issue Discount
Security.
Upon the request of the Company, accompanied by a copy of a
resolution of the Board of Directors certified by the secretary or an assistant
secretary of the Company authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee for such Series of Securities of
evidence of the consent of
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securityholders as aforesaid and other documents, if any, required by Section
7.1, the Trustee for such Series of Securities shall join with the Company in
the execution of such supplemental indenture unless such supplemental indenture
affects such Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case such Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Company shall give notice in the manner and to the extent provided in Section
11.4 to the Holders of Securities of each Series affected thereby at their
addresses as they shall appear on the Security register of the Company, setting
forth in general terms the substance of such supplemental indenture. Any failure
of the Company to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
of Securities of each Series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Eight complies with the
applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any Series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear, upon the direction of the Company, a notation in form
satisfactory to the Trustee for the Securities of such Series as to any matter
provided for by such supplemental indenture. If the Company or the Trustee shall
so determine, new Securities of any Series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of such Series then outstanding.
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ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Company May Consolidate, Etc. on Certain Terms.
The Company may consolidate with, or sell, convey or lease all or substantially
all of its assets to, or merge with or into, any other corporation, provided
that in any such case, (i) either the Company shall be the continuing
corporation, or the successor corporation shall be organized and validly
existing under the laws of the United States of America or any State thereof or
the District of Columbia and shall expressly assume the due and punctual payment
of the principal of and interest on all the securities according to their tenor,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Company by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such corporation, and (ii) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, conveyance or lease, be in material default in the
performance or observance of any such covenant or condition.
SECTION 9.2 Successor Corporation Substituted. In case of any
such consolidation, merger, sale, lease or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Company prior to such
succession any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall make available for delivery any Securities
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance the Company (or
any successor corporation which shall theretofore have become such in the manner
described in this Article) shall be discharged from all obligations and
covenants under this Indenture and the Securities and may be liquidated and
dissolved.
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SECTION 9.3 Opinion of Counsel to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive an Opinion of
Counsel, prepared in accordance with Section 11.5, as conclusive evidence that
any such consolidation, merger, sale, lease or conveyance, and any such
assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture.
(A) If at any time (a) the Company shall have paid or caused
to be paid the principal of and interest on all the Securities of any Series
Outstanding hereunder (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9) as and
when the same shall have become due and payable, or (b) the Company shall have
delivered to the Trustee for cancellation all Securities of any Series
theretofore authenticated (other than any Securities of such Series which have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.9) or (c) (i) all the Securities of such Series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and (ii) the Company shall
have irrevocably deposited or caused to be deposited with the Trustee as trust
funds the entire amount (other than moneys repaid by the Trustee or any Paying
Agent to the Company in accordance with Section 10.4) or Government Obligations
maturing as to principal and interest in such amounts and at such times as will
ensure the availability of cash sufficient to pay at maturity or upon redemption
all Securities of such Series (other than any Securities of such Series which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.9) not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such date
of maturity as the case may be, and if, in any such case, the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company with
respect to Securities of such Series, then this Indenture shall cease to be of
further effect with respect to Securities of such Series (except as to (i)
rights of registration of transfer and exchange, and the Company's right of
optional redemption (provided the Company provides sufficient funds to effect
such optional redemption), (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Securities, (iii) rights of Holders to receive payments of
principal thereof and interest thereon upon the original stated due dates
therefor (but not upon acceleration) and remaining rights of the Holders to
receive mandatory sinking fund payments, if any, (iv) the rights, obligations
and immunities of the Trustee hereunder and (v) the rights of the
Securityholders of such Series as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them), and,
subject to Section 10.5, the Trustee, on demand of the Company
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accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company, shall execute proper instruments acknowledging
such satisfaction of and discharging this Indenture with respect to such Series;
provided, that the rights of Holders of the Securities to receive amounts in
respect of principal of and interest on the Securities held by them shall not be
delayed longer than required by then-applicable mandatory rules or policies of
any securities exchange upon which the Securities are listed. The Company agrees
to reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred and to compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection with this
Indenture and the Securities of such Series.
(B) (i) In addition to the provisions of Section 10.1(A),
the Company may, at its option by or pursuant to, or otherwise in a
manner or by such Persons as may be authorized pursuant to, one or more
resolutions duly adopted by the Board of Directors, at any time with
respect to the Securities of any Series, elect to have defeasance under
subsection (ii) or (iii) of this Section 10.1(B) be applied to the
Outstanding Securities of such Series provided that provision therefor
is made for such application pursuant to Section 2.3 and the applicable
conditions thereto as set forth in this Section 10.1(B) have been
satisfied.
(ii) Upon the Company's exercise of the option
referenced in Section 10.1(B)(i) applicable to this subsection, the
Company may terminate its obligations under the Outstanding Securities
of any Series and this Indenture with respect to such Series on the
date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such Series and to have
satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at
the expense and request of the Company, shall execute proper
instruments acknowledging the same), except for the following: (1) the
rights of Holders of Outstanding Securities of such Series to receive
payments in respect of the principal of and interest on such Securities
when such payments are due, (2) the Company's obligations with respect
to such Securities under Sections 2.8, 2.9, 3.2, 6.7, 10.4 and 10.5,
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, and (4) this Section 10.1(B).
(iii) Upon the Company's exercise of the option
referenced in Section 10.1(B)(i) applicable to this subsection, the
Company shall be released from its obligations under the covenants
contained in Sections 3.6 and 3.7 with respect to the Outstanding
Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Outstanding
Securities shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. For this
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purpose, such covenant defeasance means that, with respect to the
outstanding securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason
of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in
any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 5.1(c) or (g), but, except
as specified above, the remainder of this Indenture and such
Outstanding Securities shall be unaffected thereby.
(iv) The following shall be the conditions to the
application of Section 10.1(B) (ii) or (iii) to the Outstanding
Securities of such Series:
(1) The Company shall have irrevocably
deposited or caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 6.10 who shall agree to
comply with the provisions of this Section 10.1(B) applicable to it)
under the terms of an irrevocable trust agreement, as trust funds in
trust solely for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities of such Series, (I) cash in the
currency or currency unit required, or (II) Government Obligations
maturing as to principal and interest in such amounts (payable in the
currency in which the Securities of such Series are payable) and at
such times as are sufficient, to pay the principal of and interest on
the Outstanding Securities of such Series to maturity or redemption, as
the case may be, or (III) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (x) the principal of and each installment of principal of
and interest, if any, on the Outstanding Securities of such Series on
the stated maturity of such principal or installment of principal or
interest, if any, and (y) any mandatory sinking fund payments or
analogous payments applicable to the Outstanding Securities of such
Series on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities.
Such irrevocable trust agreement shall include, among other things, (a)
provision for the payments referenced in clauses (x) and (y) of the
immediately preceding sentence, (b) the payment of the reasonable
expenses of the Trustee incurred or to be incurred in connection with
carrying out such trust provisions, (c) rights of registration,
transfer, substitution and exchange of Securities of such Series in
accordance with the terms stated in this Indenture and (d) continuation
of the rights and obligations and immunities of the Trustee as against
the Holders of Securities of such Series as stated in this Indenture.
(2) No Event of Default or event which with
notice or lapse of time or both would constitute an Event of Default
with respect to the Securities of such Series shall have occurred and
be continuing on the date of
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such deposit or, insofar as Sections 5.1(e) and 5.1(f) are concerned,
at any time during the period ending on the 91st day after the date of
such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(3) Such defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company is a
party or by which it is bound.
(4) In the case of an election under Section
10.1(B)(ii), the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that Securityholders of such Series will not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and defeasance and will be subject to Federal
income tax on the same amounts and in the same manner and at the same
time as would have been the case if such deposit and defeasance had not
occurred, and which Opinion of Counsel must be based upon (x) a ruling
of the U.S. Internal Revenue Service to the same effect or (y) a change
in applicable U.S. Federal income tax law after the date of the
Indenture such that a ruling is no longer required.
(5) In the case of an election under Section
10.1(b)(iii) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that Securityholders of such Series will not
recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal
income tax on the same amounts and in the same manner and at the same
time as would have been the case if such covenant defeasance had not
occurred.
(6) The Company shall have delivered to the
Trustee an Officers' Certificate and Opinion of Counsel, each stating
that all conditions precedent provided for herein relating to the
deposit and defeasance or covenant defeasance, as the case may be,
contemplated by this Section 10.1(B) have been complied with.
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 10.4, all moneys deposited with the
Trustee pursuant to Section 10.1 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the Holders of the particular Securities of
such Series for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposited pursuant to Section 10.1 or the principal and interest
received in respect thereof other
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than any such tax, fee or other charge which by law is for the account of the
Holders of Outstanding Securities.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
Securities of any Series, all moneys then held by any Paying Agent (other than
the Company) under the provisions of this Indenture with respect to such Series
of Securities shall, upon written demand of the Company, be paid to the Trustee
and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and
Paying Agent. Any moneys deposited with or paid to the Trustee or any Paying
Agent (including the Company acting as its own Paying Agent) for the payment of
the principal of or interest on any Security of any Series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, promptly be repaid to the
Company by the Trustee for such Series or such Paying Agent (except that with
respect to any amounts then held by the Company in trust as its own Paying Agent
no such request need be given and at such time the Company shall be discharged
from its duty to hold such moneys in trust as Paying Agent), and the Holder of
the Security of such Series shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Company for any payment which such Holder may be
entitled to collect, and all liability of the Trustee or any Paying Agent with
respect to such moneys shall thereupon cease. Anything in this Article Ten to
the contrary notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon the written request of the Company any money or
Government Obligations held by it as provided in Section 10.1(B)(iv) 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 such defeasance or covenant defeasance, as the case may be, in accordance
with the provisions of this Indenture.
SECTION 10.5 Reinstatement of Company's Obligations. If the
Trustee is unable to apply any funds or Government Obligations in accordance
with Section 10.1 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 of any Series for which such application is
prohibited shall be revived and reinstated as if no deposit had occurred
pursuant to Section 10.1 until such time as the Trustee is permitted to apply
all such funds or Government Obligations in accordance with Section 10.1;
provided, however, that if the Company has made any payment of interest on or
principal of any of such Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the
Securityholders of such Securities to receive such payment from the funds or
Government Obligations held by the Trustee.
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ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and
Directors of Company Exempt from Individual Liability. No recourse under or upon
any obligation, covenant or agreement contained in this Indenture, in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders thereof
and as part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, firm or
corporation, other than the parties hereto, any Paying Agent and their
successors hereunder and the Holders of the Securities any legal or equitable
right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Company Bound by
Indenture. All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Company, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Company may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Company is filed by the Company
with the Trustee) to WellPoint Health Networks Inc., 21555 Oxnard Street,
Woodland Hills, CA 91367, Attention: Corporate Secretary. Any notice, direction,
request or demand by the Company or any Securityholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed by first-class mail, postage
prepaid to such Holders as their names and addresses appear in the Security
register within the time prescribed. Where this
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Indenture 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 Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders, and any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Company
and Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
reasonably acceptable to the Trustee shall be deemed to be a sufficient giving
of such notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, 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, have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (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 such person, 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
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement 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 that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters or information with respect to which is in the
possession of the Company, upon the certificate, statement or opinion
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of or representations by an officer or officers of the Company, unless such
counsel knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.
Unless otherwise specified in a Security, if the date of maturity of interest on
or principal of the Securities of any Series or the date fixed for redemption or
repayment of any such Security shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required by the Trust Indenture Act of 1939, as amended, such required
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act of 1939, as amended, that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be.
SECTION 11.8 California Law to Govern. This Indenture and each
Security shall be deemed to be a contract under the internal laws of the State
of California (without regard to conflicts of laws provisions thereof), and for
all purposes shall be construed in accordance with the laws of said State,
provided, however, that the rights and duties of the Trustee hereunder shall be
construed in accordance with the laws of the State of the Trustee's principal
place of business.
SECTION 11.9 Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings; Gender. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof. The use of the masculine, feminine or
neuter gender herein shall not limit in any way the applicability of any term or
provision hereof.
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ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any Series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a Series except as otherwise specified as contemplated by Section 2.3 for
Securities of such Series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice
of redemption to the Holders of Securities of any Series required to be redeemed
or to be redeemed as a whole or in part at the option of the Company shall be
given by giving notice of such redemption as provided in Section 11.4, at least
15 days and not more than forty-five days prior to the date fixed for redemption
to such Holders of Securities of such Series. Failure to give notice by mail, or
any defect in the notice to the Holder of any Security of a Series designated
for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such Series.
The notice of redemption to each such Holder shall specify the
date fixed for redemption, the "CUSIP" number or numbers for such Securities,
the redemption price, the Place or Places of Payment, that payment will be made
upon presentation and surrender of such Securities, that such redemption is
pursuant to the mandatory or optional sinking fund, or both, if such be the
case, that interest accrued to the date fixed for redemption will be paid as
specified in such notice, that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue and, if applicable, that a
Holder of Securities who desires to convert Securities for redemption must
satisfy the requirements for conversion contained in such Securities, the then
existing conversion price or rate and the date and time when the option to
convert shall expire. If less than all of the Securities of any Series are to be
redeemed, the notice of redemption shall specify the numbers of the Securities
of such Series to be redeemed. In case any Security of a Series is to be
redeemed in part, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such Series in principal amount equal to the unredeemed Portion
thereof will be issued.
The notice of redemption of Securities of any Series to be
redeemed at the option 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.
If such notice is to be given by the Trustee, or if less than all the Securities
of a Series are to be redeemed and the Trustee is to make a selection of the
Securities of such Series to be redeemed, the Company shall provide notice of
such redemption to the Trustee at least forty-five days prior to the date fixed
for redemption (unless a shorter notice shall be satisfactory to the Trustee).
If such notice is given by the Company, the Company shall provide a copy of
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such notice given to the Holders of such redemption to the Trustee at least 3
Business Days prior to the date such notice is given to such Holders, but in any
event at least 15 days prior to the date fixed for redemption (unless a shorter
notice shall be satisfactory to the Trustee).
Unless otherwise specified pursuant to Section 2.3, not later
than the redemption date specified in the notice of redemption given as provided
in this Section, the Company will have on deposit with the Trustee or with one
or more Paying Agents (or, if the Company is acting as its own Paying Agent, set
aside, segregate and hold in trust as provided in Section 3.4) in funds
available on such date an amount of money sufficient to redeem on the redemption
date all the Securities of such Series so called for redemption at the
appropriate redemption price, together with accrued interest to the date fixed
for redemption. If less than all the Outstanding Securities of a Series are to
be redeemed, the Company will deliver to the Trustee at least forty-five days
prior to the date fixed for redemption an Officers' Certificate stating the
aggregate principal amount of Securities to be redeemed.
If less than all the Securities of a Series are to be
redeemed, the Trustee shall select, in such manner as it shall deem appropriate
and fair, Securities of such Series to be redeemed in whole or in part and the
Trustee shall promptly notify the Company in writing of the Securities of such
Series selected for redemption and, in the case of any Securities of such Series
selected for partial redemption, the principal amount thereof to be redeemed.
However, if less than all the Securities of any Series with differing issue
dates, interest rates and stated maturities are to be redeemed, the Company in
its sole discretion shall select the particular securities to be redeemed and
shall notify the Trustee in writing thereof at least forty-five days prior to
the relevant redemption date. Securities may be redeemed in part in multiples
equal to the minimum authorized denomination for Securities of such Series or
any multiple thereof. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities of
any Series shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which has
been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Company shall default in the payment of such
Securities at the redemption price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue, and, except as provided in Sections 6.1 and 10.4, such
Securities shall cease from and after the date fixed for redemption to be
entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a Place of
Payment specified in said notice, said Securities or the specified
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portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that if for any Securities the date fixed for redemption is
a regular interest payment date, payment of interest becoming due on such date
shall be payable to the Holders of such Securities registered as such on the
relevant record date subject to the terms and provisions of Section 2.7 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest borne by the Security.
Upon presentation of any Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to or on the order of the Holder thereof, at the expense of the
Company, a new Security or Securities, of authorized denominations, in principal
amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility
for Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 30 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Company or (b) an entity specifically
identified in such written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any Series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of Securities
of any Series is herein referred to as an "optional sinking fund payment." The
date on which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any Series of Securities in cash, the Company may
at its option (a) deliver to the Trustee securities of such Series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Company or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such Series (not previously so credited)
redeemed by the Company through any optional redemption provision contained in
the terms of such Series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.
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On or before the forty-fifth day next preceding each sinking
fund payment date for any Series of Securities, the Company will deliver to the
Trustee a written statement (which need not contain the statements required by
Section 11.5) signed by an authorized officer of the Company (a) specifying the
portion of the mandatory sinking fund payment to be satisfied by payment of cash
(except as otherwise specified pursuant to Section 2.3 for the Securities of
such Series), and the portion to be satisfied by delivery or credit of
Securities of such Series, (b) stating that none of the Securities of such
Series for which credit is sought has theretofore been so credited, (c) stating
that no defaults in the payment of interest or Events of Default with respect to
such Series have occurred (which have not been waived or cured) and are
continuing, (d) stating whether or not the Company intends to exercise its right
to make an optional sinking fund payment with respect to such Series and, if so,
specifying the amount of such optional sinking fund payment which the Company
intends to pay on or before the next succeeding sinking fund payment date and
(e) specifying such sinking fund payment date. Any Securities of such Series to
be credited and required to be delivered on the Trustee in order for the Company
to be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to Section
2.10 to the Trustee with such written statement. Such written statement shall be
irrevocable and upon its receipt by the Trustee the Company shall become
unconditionally obligated to make all the cash payments or payments therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Company, on or before any such forty-fifth day, to deliver such
written statement and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Company (i) that the mandatory sinking fund payment
for such Series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of such
Series in respect thereof and (ii) that the Company will make no optional
sinking fund payment with respect to such Series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $100,000 (or a lesser sum if the Company shall so request) with
respect to the Securities of any particular Series, such cash shall be applied
on the next succeeding sinking fund payment date to the redemption of Securities
of such Series at the sinking fund redemption price together with accrued
interest to the date fixed for redemption. If such amount shall be $100,000 or
less and the Company makes no such request then it shall be carried over until a
sum in excess of $100,000 is available. The Trustee shall select, in the manner
provided in Section 12.2 and giving effect to any exclusions required pursuant
to Section 12.4, for redemption on such sinking fund payment date a sufficient
principal amount of Securities of such Series to absorb said cash, as nearly as
may be possible, and shall (if requested in writing by the Company) inform the
Company of the serial numbers of the Securities of such Series (or portions
thereof) so selected. The Trustee, in the name and at the expense of the Company
(or the Company, if it shall so notify the Trustee in writing), shall cause
notice of redemption of the Securities of such Series to be given in
substantially the manner provided in Section 12.2 (and with the effect
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provided in Section 12.3) for the redemption of Securities of such Series at the
option of the Company. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such Series shall be added to the
next cash sinking fund payment for such Series and, together with such payment,
shall be applied in accordance with the provisions of this Section. Any and all
sinking fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such Series shall
be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest on, the Securities of
such Series at maturity.
Unless otherwise specified pursuant to Section 2.3, not later
than the sinking fund payment date, the Company shall have paid to the Trustee
in cash or shall otherwise provide in funds available on such date for the
payment of all principal and interest accrued to the date fixed for redemption
on Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a Series with sinking fund moneys or mail or publish any notice of
redemption of Securities for such Series by operation of the sinking fund during
the continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the mailing or publication of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it shall have
received from the Company a sum sufficient for such redemption. Except as
aforesaid, any moneys in the sinking fund for such Series at the time when any
such default or Event of Default shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and held for the
payment of all such Securities. In case such Event of Default shall have been
waived as provided in Section 5.9 or the default cured on or before the sixtieth
day preceding the sinking fund payment date in any year, such moneys shall
thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
SECTION 12.6 Repayment at the Option of the Holders.
Securities of any Series which are repayable at the option of the Holders
thereof before their stated maturity shall be repaid in accordance with the
terms of the Securities of such Series.
The repayment of any principal amount of Securities pursuant
to such option of the Holder to require repayment of Securities before their
stated maturity, for purposes of Section 10.1, shall not operate as a payment,
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the Company, at its option, shall deliver or surrender the same
to the Trustee with a directive that such Securities be cancelled.
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SECTION 12.7 Conversion Arrangement on Call for Redemption. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to the Trustee or the Paying Agent in trust for the Holders
of Securities, on or before 10:00 a.m. New York time on the redemption date, an
amount not less than the redemption price, together with interest, if any,
accrued to the redemption date of such Securities, in immediately available
funds. Notwithstanding anything to the contrary contained in this Article
Twelve, the obligation of the Company to pay the redemption price of such
Securities, including all accrued interest, if any, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any Securities not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and surrendered by such purchasers for conversion,
all as of immediately prior to the close of business on the last day on which
Securities of such series called for redemption may be converted in accordance
with this Indenture and the terms of such Securities, subject to payment to the
Trustee or Paying Agent of the above-described amount. The Trustee or the Paying
Agent shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it in the same manner as it would pay moneys
deposited with it by the Company for the redemption of Securities. Without the
Trustee's and the Paying Agent's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee and the Paying Agent as set forth
in this Indenture, and the Company agrees to indemnify the Trustee and the
Paying Agent from, and hold them harmless against, any loss, liability or
expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Trustee and the
Paying Agent (including the fees and expenses of their agents and counsel) in
the defense of any claim or liability arising out of or in connection with the
exercise or performance of any of their powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
SECTION 13.1 Applicability of Article. Securities of any
series which are convertible into Common Shares at the option of the Holder of
such Securities shall be convertible in accordance with their terms and (unless
otherwise specified as contemplated by Section 2.3 for the Securities of any
series) in accordance with this Article. Each reference in this Article Thirteen
to "a Security" or "the Securities" refers to the Securities of the particular
Series that is convertible into Common Shares. If more than one Series of
Securities with conversion privileges are Outstanding at any
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time, the provisions of this Article Thirteen shall be applied separately to
each such series.
SECTION 13.2 Right of Holders to Convert Securities into
Common Shares. Subject to and upon compliance with the terms of the Securities
and the provisions of Section 12.7 and this Article Thirteen, at the option of
the Holder thereof, any Security of any series of any authorized denomination
which is convertible into Common Shares, or any portion of the principal amount
thereof which is $1,000 or any integral multiple of $1,000, may, at any time
during the period specified in the Securities of such series, or in case such
Security or portion thereof shall have been called for redemption, then in
respect of such Security or portion thereof until and including, but not after
(unless the Company shall default in payment due upon the redemption thereof)
the close of business on the redemption date (except that in the case of
repayment at the option of the Holder, if specified in the terms of the relevant
Security, such right shall terminate upon the Company's receipt of written
notice of the exercise of such option), be converted into duly authorized,
validly issued, fully paid and nonassessable Common Shares, as specified in such
Security, at the conversion price or conversion rate for each $1,000 principal
amount of Securities (such initial conversion rate reflecting an initial
conversion price specified in such Security) in effect on the conversion date,
or, in case an adjustment in the conversion price has taken place pursuant to
the provisions of this Article Thirteen, then at the applicable conversion price
as so adjusted, upon surrender of the Security or Securities, the principal
amount of which is so to be converted, to the Company at any time during usual
business hours at the office or agency to be maintained by it in accordance with
the provisions of Section 3.2, accompanied by a written notice of election to
convert as provided in Section 13.3 and, if the Holder requests that the Common
Shares be registered in a name other than that of the Holder, by a written
instrument or instruments of transfer in form satisfactory to the Company and/or
the Trustee, as applicable, duly executed by the Holder thereof or his attorney
duly authorized in writing. All Securities surrendered for conversion shall, if
surrendered to the Company or any conversion agent, be delivered to the Trustee
for cancellation and cancelled by it, or shall, if surrendered to the Trustee,
be cancelled by it, as provided in Section 2.10.
The initial conversion price or conversion rate in respect of
a Series of Securities shall be as specified in the Securities of such Series.
The conversion price or conversion rate will be subject to adjustment on the
terms set forth in Section 13.5 or such other or different terms, if any, as may
be specified by Section 2.3 for Securities of such Series. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of any portion of it.
SECTION 13.3 Issuance of Common Shares on Conversions. As
promptly as practicable after the surrender, as herein provided, of any Security
or Securities for conversion into Common Shares, the Company shall deliver or
cause to be delivered at its said office or agency to or upon the written order
of the Holder of the Security or Securities so surrendered a certificate or
certificates representing the number of duly authorized, validly issued, fully
paid and nonassessable Common Shares into which such
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Security or Securities may be converted in accordance with the terms thereof and
the provisions of this Article Thirteen. Prior to delivery of such certificate
or certificates, the Company shall require written notice at its said office or
agency from the Holder of the Security or Securities so surrendered stating that
the Holder irrevocably elects to convert such Security or Securities, or, if
less than the entire principal amount thereof is to be converted, stating the
portion thereof to be converted. Such notice shall also state the name or names
(with address and social security or other taxpayer identification number) in
which said certificate or certificates are to be issued. Such conversion shall
be deemed to have been made at the time that such Security or Securities shall
have been surrendered for conversion and such notice shall have been received by
the Company or the Trustee, the rights of the Holder of such Security or
Securities as a Holder shall cease at such time, the Person or Persons entitled
to receive the Common Shares upon conversion of such Security or Securities
shall be treated for all purposes as having become either record holder or
holders of such Common Shares at such time and such conversion shall be at the
conversion price in effect at such time. In the case of any Security of any
Series which is converted in part only, upon such conversion, the Company shall
execute and, upon the Company's request and at the Company's expense, the
Trustee or an authenticating agent shall authenticate and deliver to the Holder
thereof, as requested by such Holder, a new Security or Securities of such
Series of authorized denominations in aggregate principal amount equal to the
unconverted portion of such Security.
If the last day on which such Security may be converted is not
a Business Day in a place where the conversion agent for that Security is
located, such Security may be surrendered to that conversion agent on the next
succeeding day that is a Business Day.
The Company shall not be required to deliver certificates for
Common Shares upon conversion while its stock transfer books are closed for a
meeting of shareholders or for the payment of dividends or for any other
purpose, but certificates for Common Shares shall be delivered as soon as the
stock transfer books shall again be opened.
SECTION 13.4 No Payment or Adjustment for Interest or
Dividends. Unless otherwise specified as contemplated by Section 2.3 for
Securities of such Series, Securities surrendered for conversion into Common
Shares during the period from the close of business on any regular record date
(or special record date) next preceding any interest payment date to the opening
of business on such interest payment date (except Securities called for
redemption on a redemption date within such period) when surrendered for
conversion must be accompanied by payment (by certified or official bank check
to the order of the Company payable in clearing house funds at the location
where the Securities are surrendered) of an amount equal to the interest thereon
which the Holder is entitled to receive on such interest payment date. Payment
of interest shall be made, on such interest payment date or such other payment
date (as set forth in Section 2.7), as the case may be, to the Holder of the
Securities as of such regular record date or special record date, as applicable.
Except where Securities surrendered for
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conversion must be accompanied by payment as described above, no interest on
converted Securities will be payable by the Company on any interest payment date
subsequent to the date of conversion. No other payment or adjustment for
interest or dividends is to be made upon conversion. Notwithstanding the
foregoing, upon conversion of any Original Issue Discount Security, the fixed
number of Common Shares into which such Security is convertible delivered by the
Company to the Holder thereof shall be applied, first, to the portion
attributable to the accrued original issue discount relating to the period from
the date of issuance to the date of conversion of such Security, and, second, to
the portion attributable to the balance of the principal amount of such
Security.
SECTION 13.5 Adjustment of Conversion Price. Unless otherwise
specified as contemplated by Section 2.3 for Securities of such Series, the
conversion price for Securities convertible into Common Shares shall be adjusted
from time to time as follows:
(a) In case the Company shall (x) pay a dividend or make a
distribution on Common Shares in Common Shares, (y) subdivide the outstanding
Common Shares into a greater number of shares or (z) combine the outstanding
Common Shares into a smaller number of shares, the conversion price for the
Securities of such Series shall be adjusted so that the Holder of any such
Security thereafter surrendered for conversion shall be entitled to receive the
number of Common Shares which he would have owned or have been entitled to
receive after the happening of any of the events described above had such
Security been converted immediately prior to the record date in the case of a
dividend or the effective date in the case of subdivision or combination. An
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend, except as provided
in subsection (h) below, and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(b) In case the Company shall issue rights or warrants to all
holders of Common Shares entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase Common
Shares at a price per share less than the current market price per share of
Common Shares (as defined for purposes of this subsection (b) in subsection (e)
below), at the record date for the determination of stockholders entitled to
receive such rights or warrants, the conversion price in effect immediately
prior thereto shall be adjusted so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
Common Shares outstanding on such record date plus the number of Common Shares
which the aggregate offering price of the total number of Common Shares so
offered would purchase at such current market price, and the denominator of
which shall be the number of Common Shares outstanding on such record date plus
the number of additional Common Shares receivable upon exercise of such rights
or warrants. Such adjustment shall be made successively whenever any such rights
or warrants are issued, and shall become effective immediately, except as
provided in subsection (h) below, after
59.
<PAGE> 68
such record date. In determining whether any rights or warrants entitle the
Holders of the Securities of such Series to subscribe for or purchase Common
Shares at less than such current market price, and in determining the aggregate
offering price of such Common Shares, there shall be taken into account any
consideration received by the Company for such rights or warrants plus the
exercise price thereof, the value of such consideration or exercise price, as
the case may be, if other than cash, to be determined by the Board of Directors.
(c) In case the Company shall distribute to all holders of
Common Shares any shares of capital stock of the Company (other than Common
Shares) or evidences of its indebtedness or assets (excluding cash dividends or
distributions paid from retained earnings of the Company) or rights or warrants
to subscribe for or purchase any of its securities (excluding those rights or
warrants referred to in subsection (b) above) (any of the foregoing being herein
in this subsection (c) called the "Special Securities"), then, in each such
case, unless the Company elects to reserve such Special Securities for
distribution to the Holders of Securities of such Series upon the conversion so
that any such Holder converting such Securities will receive upon such
conversion, in addition to the Common Shares to which such Holder is entitled,
the amount and kind of Special Securities which such Holder would have received
if such Holder had, immediately prior to the record date for the distribution of
the Special Securities, converted Securities into Common Shares, the conversion
price shall be adjusted so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to such record date
by a fraction the numerator of which shall be the current market price per share
(as defined for purposes of this subsection (c) in subsection (e) below) of
Common Shares on the record date mentioned above less the then fair market value
(as determined by the Board of Directors, whose determination shall, if made in
good faith, be conclusive) of the portion of the Special Securities so
distributed applicable to one Common Share, and the denominator of which shall
be the current market price per Common Shares (as defined in subsection (e)
below); provided, however, that in the event the then fair market value (as so
determined) of the portion of the Special Securities so distributed applicable
to one Common Share is equal to or greater than the current market price per
Common Share (as defined in subsection (e) below) on the record date mentioned
above, in lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder of Securities of such Series shall have the right to receive
the amount and kind of Special Securities such holder would have received had he
converted such Securities immediately prior to the record date for the
distribution of the Special Securities. Such adjustment shall become effective
immediately, except as provided in subsection (h) below, after the record date
for the determination of stockholders entitled to receive such distribution.
(d) If, pursuant to subsection (b) or (c) above, the
conversion price shall have been adjusted because the Company has declared a
dividend, or made a distribution, on the outstanding Common Shares in the form
of any right or warrant to purchase securities of the Company, or the Company
has issued any such right or warrant, then, upon the expiration of any such
unexercised right or unexercised warrant,
60.
<PAGE> 69
the conversion price shall forthwith be adjusted to equal the conversion price
that would have applied had such right or warrant never been declared,
distributed or issued.
(e) For the purpose of any computation under subsection (b)
above, the current market price per Common Share on any date shall be deemed to
be the average of the reported last sales prices for the thirty consecutive
Trading Days (as defined below) commencing forty-five Trading Days before the
date in question. For the purpose of any computation under subsection (c) above,
the current market price per Common Share on any date shall be deemed to be the
average of the reported last sales prices for the ten consecutive Trading Days
before the date in question. The reported last sales price for each day (whether
for purposes of subsection (b) or subsection (c)) shall be the reported last
sales price, regular way, or, in case no sale takes place on such day, the
average of the reported closing bid and asked prices, regular way, in either
case as reported on the New York Stock Exchange Composite Tape or, if the Common
Shares are not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which the Common Shares are listed
or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or, if the
Common Shares are not quoted on such National Market, the average of the closing
bid and asked prices on such day in the over-the-counter market as reported by
NASDAQ or, if bid and asked prices for the Common Shares on each such day shall
not have been reported through NASDAQ, the average of the bid and asked prices
for such day as furnished by any New York Stock Exchange member firm regularly
making a market in the Common Shares selected for such purpose by the Board of
Directors or a committee thereof or, if no such quotations are available, the
fair market value of the Common Shares as determined by a New York Stock
Exchange member firm regularly making a market in the Common Shares selected for
such purpose by the Board of Directors or a committee thereof. As used herein,
the term "Trading Day" with respect to the Common Shares means (x) if the Common
Shares are listed or admitted for trading on the New York Stock Exchange or
another national securities exchange, a day on which the New York Stock Exchange
or such other national securities exchange is open for business or (y) if the
Common Shares are quoted on the National Market of the NASDAQ, a day on which
trades may be made on such National Market or (z) otherwise, any day other than
a Saturday or Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(f) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
subsection (f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment; and, provided, further, that
adjustment shall be required and made in accordance with the provisions of this
Article Thirteen (other than this subsection (f)) not later than such time as
may be required in order to preserve the tax free nature of a distribution to
the holders of Common Shares. All calculations under this Article Thirteen shall
be made to the nearest cent or to the nearest 1/100 of a share, as the case may
be, with one-half
61.
<PAGE> 70
cent and 1/200 of a share, respectively, being rounded upward. Anything in this
Section 13.5 to the contrary notwithstanding, the Company shall be entitled to
make such reductions in the conversion price, in addition to those required by
this Section 13.5, as it in its discretion shall determine to be advisable in
order that any stock dividend, subdivision of shares, distribution of rights or
warrants to purchase stock or securities, or distribution of other assets (other
than cash dividends) hereafter made by the Company to its shareholders shall not
be taxable.
(g) Whenever the conversion price is adjusted, as herein
provided, the Company shall promptly file with the Trustee, at the Corporate
Trust Office of the Trustee, and with the office or agency maintained by the
Company for the conversion of Securities of such Series pursuant to Section 3.2,
an Officers' Certificate, setting forth the conversion price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness of
such adjustment. Neither the Trustee nor any conversion agent shall be under any
duty or responsibility with respect to any such certificate or any facts or
computations set forth therein, except to exhibit said certificate from time to
time to any Holder of a Security of such Series desiring to inspect the same.
The Company shall promptly cause a notice setting forth the adjusted conversion
price to be mailed to the Holders of Securities of such Series, as their names
and addresses appear upon the Security register of the Company.
(h) In any case in which this Section 13.5 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (y) issuing to the
Holder of any Security of such Series converted after such record date and
before the occurrence of such event the additional Common Shares issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Shares issuable upon such conversion before giving effect to
such adjustment and (z) paying to such holder any amount in cash in lieu of any
fractional Common Shares pursuant to Section 13.6 hereof.
SECTION 13.6 No Fractional Shares to Be Issued. No fractional
Common Shares shall be issued upon any conversion of Securities. If more than
one Security of any Series shall be surrendered for conversion at one time by
the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities of such Series (or specified portions thereof to the
extent permitted hereby) so surrendered. Instead of a fraction of a share of
Common Stock which would otherwise be issuable upon conversion of any Security
or Securities (or specified portions thereof), the Company shall pay a cash
adjustment (computed to the nearest cent, with one-half cent being rounded
upward) in respect of such fraction of a share in an amount equal to the same
fractional interest of the reported last sales price (as defined in Section
13.5(e)) of the Common Shares on the Trading Day (as defined in Section 13.5(e))
next preceding the day of conversion.
62.
<PAGE> 71
SECTION 13.7 Preservation of Conversion Rights upon
Consolidation, Merger, Sale or Conveyance. In case of any consolidation of the
Company with, or merger of the Company into, any other corporation (other than a
consolidation or merger in which the Company is the continuing corporation), or
in the case of any sale or transfer of all or substantially all of the assets of
the Company, the corporation formed by such consolidation or the corporation
into which the Company shall have been merged or the corporation which shall
have acquired such assets, as the case may be, shall execute and deliver to the
Trustee, a supplemental indenture, in accordance with the provisions of Articles
Eight and Nine as they relate to supplemental indentures, providing that the
Holder of each Security then Outstanding of a Series which was convertible into
Common Shares shall have the right thereafter to convert such Security into the
kind and amount of shares of stock and other securities and property, including
cash, receivable upon such consolidation, merger, sale or transfer by a holder
of the number of Common Shares of the Company into which such Securities might
have been converted immediately prior to such consolidation, merger, sale or
transfer. Such supplemental indenture shall conform to the provisions of the
Trust Indenture Act of 1939 as then in effect and shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article Thirteen. Neither the Trustee nor any conversion
agent shall have any liability or responsibility for determining the correctness
of any provision contained in any such supplemental indenture relating either to
the kind or amount of shares of stock or other securities or property receivable
by Holders of the Securities upon the conversion of their Securities after any
such consolidation, merger, sale or transfer, or to any adjustment to be made
with respect thereto and, subject to the provisions of Section 313 of the Trust
Indenture Act of 1939, may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected in relying upon, an Officers'
Certificate with respect thereto and an Opinion of Counsel with respect to legal
matters related thereto. If in the case of any such consolidation, merger, sale
or transfer, the stock or other securities and property receivable by a Holder
of the Securities includes stock or other securities and property of a
corporation other than the successor or purchasing corporation, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Securities as the Board of Directors shall reasonably consider necessary.
The above provisions of this Section 13.7 shall similarly apply to successive
consolidations, mergers, sales or transfers.
SECTION 13.8 Notice to Holders of the Securities of a Series
Prior to Taking Certain Types of Action. With respect to the Securities of any
Series, in case:
(a) the Company shall authorize the issuance to all holders of
Common Shares of rights or warrants to subscribe for or purchase shares of its
capital stock or of any other right;
(b) the Company shall authorize the distribution to all
holders of Common Shares of evidences of indebtedness or assets (except for cash
dividends or distributions paid from retained earnings of the Company);
63.
<PAGE> 72
(c) of any subdivision or combination of Common Shares or of
any consolidation or merger to which the Company is a party and for which
approval by the shareholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Trustee and at the office or
agency maintained for the purpose of conversion of Securities of such Series
pursuant to Section 3.2, and shall cause to be mailed to the Holders of
Securities of such Series, at their last addresses as they shall appear on the
Security register of the Company, at least ten days prior to the applicable
record date hereinafter specified, a notice stating (i) the date as of which the
holders of Common Shares to be entitled to receive any such rights, warrants or
distribution are to be determined, or (ii) the date on which any such
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action is expected to become effective, and the
date as of which it is expected that holders of record of Common Shares shall be
entitled to exchange their Common Shares for securities or other property, if
any, deliverable upon such subdivision, combination, consolidation, merger,
sale, transfer, dissolution, liquidation, winding up or other action. The
failure to give the notice required by this Section 13.8 or any defect therein
shall not affect the legality or validity of any distribution, right, warrant,
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action, or the vote upon any of the foregoing.
SECTION 13.9 Covenant to Reserve Shares for Issuance on
Conversion of Securities. The Company covenants that at all times it will
reserve and keep available out of each class of its authorized Common Shares,
free from preemptive rights, solely for the purpose of issue upon conversion of
Securities of any Series as herein provided, such number of Common Shares as
shall then be issuable upon the conversion of all Outstanding Securities of such
Series. The Company covenants that all Common Shares which shall be so issuable
shall, when issued or delivered, be duly and validly issued Common Shares into
which Securities of such Series are convertible, and shall be fully paid and
nonassessable, free of all liens and charges and not subject to preemptive
rights and that, upon conversion, the appropriate capital stock accounts of the
Company will be duly credited.
SECTION 13.10 Compliance with Governmental Requirements. The
Company covenants that if any Common Shares required to be reserved for purposes
of conversion of Securities hereunder require registration or listing with or
approval of any governmental authority under any Federal or State law, pursuant
to the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or any national or regional securities exchange on which the
Common Shares are listed at the time of delivery of any Common Shares, before
such shares may be issued upon conversion, the Company will use its best efforts
to cause such shares to be duly registered, listed or approved, as the case may
be.
64.
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SECTION 13.11 Payment of Taxes upon Certificates for Shares
Issued upon Conversion. The issuance of certificates for Common Shares upon the
conversion of Securities shall be made without charge to the converting Holders
for any tax (including, without limitation, all documentary and stamp taxes) in
respect of the issuance and delivery of such certificates, and such certificates
shall be issued in the respective names of, or in such names as may be directed
by, the holders of the Securities converted; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the Holder of the Security converted, and the Company shall
not be required to issue or deliver such certificate unless or until the Person
or Persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
SECTION 13.12 Trustee's Duties with Respect to Conversion
Provisions. The Trustee and any conversion agent shall have no duty,
responsibility or liability to any Holder to determine whether any facts exist
which may require any adjustment of the conversion rate, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture (or whether such
supplemental indenture need be entered into) provided to be employed, in making
the same. Neither the Trustee nor any conversion agent shall be accountable with
respect to the registration under securities laws, listing, validity or value
(or the kind or amount) of any Common Shares, or of any other securities or
property, which may at any time be issued or delivered upon the conversion of
any Security, and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any shares of stock or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee and any conversion agent, subject
to the provisions of Section 313 of the TIA, shall not be responsible for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article Thirteen.
SECTION 13.13 Conversion of Securities into Preferred Stock.
Notwithstanding anything to the contrary in this Article Thirteen, the Company
may issue Securities that are convertible into Preferred Shares, including
Preferred Shares convertible into Common Shares, in which case all terms and
conditions relating to the conversion of Securities into Preferred Shares,
including any terms similar to those provided in Sections 13.1 through 13.12,
shall be as provided in or pursuant to an appropriate resolution of the Board of
Directors or in any indenture supplemental hereto or as otherwise contemplated
by Section 2.3.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
65.
<PAGE> 74
WELLPOINT HEALTH NETWORKS INC.
By: ___________________________
Name:
Title:
THE BANK OF NEW YORK
as Trustee
By: ___________________________
Name:
Title:
66.
<PAGE> 1
Exhibit 4.4
WELLPOINT HEALTH NETWORKS INC.
AND
[ ]
Trustee
-----------------------
Subordinated Debt Securities
-----------------------
INDENTURE
Dated as of ________ ___, 1996
-----------------------
<PAGE> 2
CROSS REFERENCE SHEET*
Provisions of Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939, as amended, and the Indenture dated as of ______
___, 1996 between WellPoint Health Networks Inc. and [ ], as Trustee.
<TABLE>
<CAPTION>
SECTION OF ACT SECTION OF INDENTURE
- -------------- --------------------
<S> <C>
310(a)(1) 6.10
310(a)(2) 6.10
310(a)(3) N/A
310(a)(4) N/A
310(a)(5) 6.10
310(b) 6.10
310(c) N/A
311(a) 6.11
311(b) 6.11
311(b)(2) 6.11
311(c) N/A
312(a) 4.1
312(b) 4.2(b)
312(c) 4.2(c)
313(a) 6.6
313(b) 6.6
313(c) 6.6
313(d) 6.6
314(a) 4.3
314(b) N/A
314(c)(1) 2.4 and 11.5
314(c)(2) 2.4 and 11.5
314(c)(3) N/A
314(d) N/A
314(e) 11.5
315(a) 6.1(b)
315(b) 6.5
315(c) 6.1(a)
315(d)(1) 6.1(b)(1) and 6.1(b)(2)
315(d)(2) 6.1(c)(2)
315(d)(3) 6.1(c)(3)
315(e) 5.10
316(a)(1)(A) 5.8
</TABLE>
- --------
* This cross reference sheet shall not, for any purpose, be deemed to be a part
of the Indenture.
i.
<PAGE> 3
<TABLE>
<S> <C>
316(a)(1)(B) 5.9
316(a)(2) N/A
316(b) 5.6
316(c) 2.7
317(a)(1) 5.2
317(a)(2) 5.2
317(b) 3.2 and 3.3
318(a) 11.7
</TABLE>
Attention should also be directed to Section 318(c) of the Trust
Indenture Act of 1939, as amended, which provides that the provisions of
Sections 310 through 317 of such Act are a part of and govern every qualified
indenture, whether or not physically contained therein.
ii.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE DEFINITIONS........................................................................................ 1
SECTION 1.1 Certain Terms Defined..................................................................... 1
Board of Directors............................................................................ 1
Business Day.................................................................................. 2
Commission.................................................................................... 2
Common Shares................................................................................. 2
Company....................................................................................... 2
Company Notice................................................................................ 2
Corporate Trust Office........................................................................ 2
defaulted interest............................................................................ 2
Depository.................................................................................... 2
Depository Security........................................................................... 2
defeasance.................................................................................... 3
Dollar........................................................................................ 3
Event of Default.............................................................................. 3
Government Obligations........................................................................ 3
Holde......................................................................................... 3
Holder of Securities.......................................................................... 3
Indenture..................................................................................... 3
Officers' Certificate......................................................................... 3
Opinion of Counsel............................................................................ 3
original issue date........................................................................... 3
Original Issue Discount Security.............................................................. 3
Outstanding................................................................................... 4
Paying Agent.................................................................................. 4
Person........................................................................................ 4
person........................................................................................ 4
Place of Payment.............................................................................. 4
Preferred Shares.............................................................................. 4
principal..................................................................................... 5
Responsible Officer........................................................................... 5
Security...................................................................................... 5
Securities.................................................................................... 5
Senior Indebtedness........................................................................... 5
Series........................................................................................ 5
Series of Securities.......................................................................... 5
Subsidiary.................................................................................... 5
Trustee....................................................................................... 6
Trust Indenture Act of 1939................................................................... 6
TIA........................................................................................... 6
United States of America...................................................................... 6
</TABLE>
i.
<PAGE> 5
<TABLE>
<S> <C>
vice president ............................................................................... 6
ARTICLE TWO SECURITIES......................................................................................... 6
SECTION 2.1 Forms Generally........................................................................... 6
SECTION 2.2 Form of Trustee's Certificate of Authentication........................................... 6
SECTION 2.3 Amount Unlimited; Issuable in Series...................................................... 7
SECTION 2.4 Authentication and Delivery of Securities................................................. 9
SECTION 2.5 Execution of Securities................................................................... 10
SECTION 2.6 Certificate of Authentication............................................................. 10
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest.................................................................................. 11
SECTION 2.8 Registration, Transfer and Exchange....................................................... 12
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities................................................................................ 13
SECTION 2.10 Cancellation of Securities............................................................... 14
SECTION 2.11 Temporary Securities..................................................................... 14
SECTION 2.12 Securities in Global Form................................................................ 15
ARTICLE THREE COVENANTS OF THE COMPANY......................................................................... 16
SECTION 3.1 Payment of Principal and Interest......................................................... 16
SECTION 3.2 Offices for Payment, etc.................................................................. 16
SECTION 3.3 Paying Agents............................................................................. 16
SECTION 3.4 Written Statement to Trustee.............................................................. 17
SECTION 3.5 Calculation of Original Issue Discount.................................................... 17
ARTICLE FOUR SECURITYHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE....................................................................... 18
SECTION 4.1 Company to Furnish Trustee Information as to Names
and Addresses of Securityholders.......................................................... 18
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists..................................... 18
SECTION 4.3 Reports by the Company.................................................................... 19
ARTICLE FIVE REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT............................................................... 20
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default......................................................................... 20
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt................................................................................ 22
SECTION 5.3 Application of Proceeds................................................................... 24
SECTION 5.4 Restoration of Rights on Abandonment of Proceedings....................................... 25
SECTION 5.5 Limitations on Suits by Securityholders................................................... 25
</TABLE>
ii.
<PAGE> 6
<TABLE>
<S> <C>
SECTION 5.6 Unconditional Right of Securityholders to Institute
Certain Suits............................................................................. 26
SECTION 5.7 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default..................................................................... 26
SECTION 5.8 Control by Securityholders................................................................ 26
SECTION 5.9 Waiver of Past Defaults................................................................... 27
SECTION 5.10 Right of Court to Require Filing of Undertaking to Pay
Costs.................................................................................... 27
SECTION 5.11 Suits for Enforcement.................................................................... 27
ARTICLE SIX CONCERNING THE TRUSTEE............................................................................. 28
SECTION 6.1 Duties of Trustee......................................................................... 28
SECTION 6.2 Rights of Trustee......................................................................... 29
SECTION 6.3 Individual Rights of Trustee.............................................................. 30
SECTION 6.4 Trustee's Disclaimer...................................................................... 30
SECTION 6.5 Notice of Defaults........................................................................ 31
SECTION 6.6 Reports by Trustee to Holders............................................................. 31
SECTION 6.7 Compensation and Indemnity................................................................ 31
SECTION 6.8 Replacement of Trustee.................................................................... 32
SECTION 6.9 Successor Trustee by Merger............................................................... 33
SECTION 6.10 Eligibility; Disqualification............................................................ 33
SECTION 6.11 Preferential Collection of Claims Against Company........................................ 33
ARTICLE SEVEN CONCERNING THE SECURITYHOLDERS................................................................... 33
SECTION 7.1 Evidence of Action Taken by Securityholders............................................... 33
SECTION 7.2 Proof of Execution of Instruments......................................................... 33
SECTION 7.3 Holders to Be Treated as Owners........................................................... 34
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding........................................ 34
SECTION 7.5 Right of Revocation of Action Taken....................................................... 34
ARTICLE EIGHT SUPPLEMENTAL INDENTURES.......................................................................... 35
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders........................................................................... 35
SECTION 8.2 Supplemental Indentures with Consent of Securityholders................................... 36
SECTION 8.3 Effect of Supplemental Indenture.......................................................... 37
SECTION 8.4 Documents to Be Given to Trustee.......................................................... 37
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures................................................................................ 37
</TABLE>
iii.
<PAGE> 7
<TABLE>
<S> <C>
ARTICLE NINE CONSOLIDATION, MERGER, SALE OR
CONVEYANCE........................................................................................ 37
SECTION 9.1 Company May Consolidate, etc. on Certain Terms............................................ 37
SECTION 9.2 Successor Corporation Substituted......................................................... 38
SECTION 9.3 Opinion of Counsel to Trustee............................................................. 38
ARTICLE TEN SATISFACTION AND DISCHARGE OF
INDENTURE: UNCLAIMED MONEYS........................................................................ 39
SECTION 10.1 Satisfaction and Discharge of Indenture.................................................. 39
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities............................................................................ 41
SECTION 10.3 Repayment of Moneys Held by Paying Agent................................................. 42
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and
Paying Agent............................................................................. 42
SECTION 10.5 Reinstatement of Company's Obligations................................................... 42
ARTICLE ELEVEN MISCELLANEOUS PROVISIONS........................................................................ 43
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability................................................. 43
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders...................................................................... 43
SECTION 11.3 Successors and Assigns of Company Bound by Indenture..................................... 43
SECTION 11.4 Notices and Demands on Company, Trustee and
Securityholders.......................................................................... 43
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein....................................................... 44
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.......................................... 45
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939.................................................................... 45
SECTION 11.8 California Law to Govern................................................................. 45
SECTION 11.9 Counterparts............................................................................. 45
SECTION 11.10 Effect of Headings; Gender.............................................................. 45
ARTICLE TWELVE REDEMPTION OF SECURITIES AND SINKING
FUNDS........................................................................................... 46
SECTION 12.1 Applicability of Article................................................................. 46
SECTION 12.2 Notice of Redemption; Partial Redemptions................................................ 46
SECTION 12.3 Payment of Securities Called for Redemption.............................................. 47
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption................................................................. 48
SECTION 12.5 Mandatory and Optional Sinking Funds..................................................... 48
SECTION 12.6 Repayment at the Option of the Holders................................................... 50
SECTION 12.7 Conversion Arrangement on Call for Redemption............................................ 51
</TABLE>
iv.
<PAGE> 8
<TABLE>
<S> <C>
ARTICLE THIRTEEN CONVERSION OF SECURITIES...................................................................... 51
SECTION 13.1 Applicability of Article................................................................. 51
SECTION 13.2 Right of Holders to Convert Securities into Common
Shares................................................................................... 52
SECTION 13.3 Issuance of Common Shares on Conversions................................................. 52
SECTION 13.4 No Payment or Adjustment for Interest or Dividends....................................... 53
SECTION 13.5 Adjustment of Conversion Price........................................................... 54
SECTION 13.6 No Fractional Shares to Be Issued........................................................ 57
SECTION 13.7 Preservation of Conversion Rights upon Consolidation,
Merger, Sale or Conveyance............................................................... 58
SECTION 13.8 Notice to Holders of the Securities of a Series Prior to
Taking Certain Types of Action........................................................... 59
SECTION 13.9 Covenant to Reserve Shares for Issuance on Conversion
of Securities............................................................................ 59
SECTION 13.10 Compliance with Governmental Requirements............................................... 60
SECTION 13.11 Payment of Taxes upon Certificates for Shares Issued
upon Conversion......................................................................... 60
SECTION 13.12 Trustee's Duties with Respect to Conversion Provisions.................................. 60
SECTION 13.13 Conversion of Securities into Preferred Stock........................................... 61
ARTICLE FOURTEEN SUBORDINATION OF SECURITIES................................................................... 61
SECTION 14.1 Securities Subordinated to Senior Indebtedness........................................... 61
SECTION 14.2 Subrogation.............................................................................. 62
SECTION 14.3 Obligation of the Company Unconditional.................................................. 63
SECTION 14.4 Payments on Securities Permitted......................................................... 63
SECTION 14.5 Effectuation of Subordination by Trustee................................................. 63
SECTION 14.6 Knowledge of Trustee..................................................................... 63
SECTION 14.7 Trustee May Hold Senior Indebtedness..................................................... 64
SECTION 14.8 Rights of Holders of Senior Indebtedness Not Impaired.................................... 64
</TABLE>
v.
<PAGE> 9
THIS INDENTURE, dated as of _______ ___, 1996 between
WellPoint Health Networks Inc., a California corporation (the "Company"), and
[ ] as trustee (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issue from time
to time of its unsecured subordinated debentures, notes or other evidences of
indebtedness (the "Securities") to be issued in one or more Series; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed for the equal and
ratable benefit of the Holders from time to time of the Securities or of Series
thereof as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended, or the definitions of which in the Securities Act of 1933, as
amended, are referred to in the Trust Indenture Act of 1939, as amended,
including terms defined therein by reference to the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise clearly requires), shall have the meanings assigned to such terms in
said Trust Indenture Act and in said Securities Act as in force at the date of
this Indenture. All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole, as supplemented and amended
from time to time, and not to any particular Article, Section or other
subdivision. The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.
"Board of Directors" means either the Board of Directors of
the Company or any duly authorized committee of that Board or any duly
authorized committee created by that Board.
1.
<PAGE> 10
"Business Day" means, except as may otherwise be provided in
the form of Securities of any particular Series, with respect to any Place of
Payment or place of publication, any day, other than a Saturday or Sunday, or a
day on which banking institutions are authorized or required by law or
regulation to close in that Place of Payment, place of publication or where the
principal corporate trust office of the Trustee is located.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties on
such date.
"Common Shares" means the shares of common stock, par value
$.01 per share, of the Company as they exist on the date of this Indenture, or
any other shares of capital stock of the Company into which such shares shall be
reclassified or changed.
"Company" means WellPoint Health Networks Inc., a California
corporation, until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Notice" means the confirmation of the Company, signed
by an officer, received by the Trustee, of the terms of the issuance of any
Securities.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of execution of this
Indenture is located at [ ].
"defaulted interest" has the meaning specified in Section 2.7.
"Depository" shall mean, with respect to Securities of any
Series for which the Company shall determine that such Securities will be issued
as a Depository Security, The Depository Trust Company, New York, New York, or
another clearing agency or any successor registered under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
which, in each case, shall be designated by the Company pursuant to Sections 2.3
and 2.12.
"Depository Security" shall mean, with respect to any Series
of Securities, a Security 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 Indenture and pursuant to a resolution
of the Board of Directors as contemplated by Section 2.3, which (i) shall be
registered as to principal and interest in the name of the Depository or its
nominee and (ii) shall represent, and shall be denominated in an amount equal to
the aggregate principal amount of, all of the Outstanding Securities of such
Series.
2.
<PAGE> 11
"defeasance" has the meaning specified in Section 10.1(B).
"Dollar" means the coin or currency of the United States of
America which as of the time of payment is legal tender for the payment of
public and private debts.
"Event of Default" has the meaning specified in Section 5.1.
"Government Obligations" means, unless otherwise specified
pursuant to Section 2.3, securities which are (i) direct obligations of the
United States government or (ii) obligations of a Person controlled or
supervised by, or acting as an agency or instrumentality of, the United States
government, the payment of which obligations is unconditionally guaranteed by
such government, and which, in either case, are full faith and credit
obligations of such government, and which are not callable or redeemable at the
option of the issuer thereof.
"Holder," " Holder of Securities," "Registered Holder,"
"Securityholder" or other similar terms mean the Person in whose name at the
time a particular Security is registered in the Security register.
"Indenture" means this instrument as originally executed or as
it may from time to time be amended or supplemented as herein provided, as so
amended or supplemented or both, and shall include the forms and terms of
particular Series of Securities established as contemplated by Section 2.3.
"Officers' Certificate" means a certificate signed on behalf
of the Company by the chairman of the Board of Directors or the vice chairman or
the president or any vice president and by the treasurer, the controller, any
assistant treasurer, the secretary or any assistant secretary of the Company and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 11.5.
"Opinion of Counsel" means a written opinion of legal counsel
who may be an employee of or counsel to the Company and who shall be reasonably
acceptable to the Trustee. Each Opinion of Counsel shall include the statements
provided for in Section 11.5, if and to the extent required hereby.
"original issue date" of any Security (or portion thereof)
means the date set forth as such on such Security.
"Original Issue Discount Security" means 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 pursuant to
Section 5.1.
"Outstanding," when used with reference to Securities, shall,
subject to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered under this Indenture, except
3.
<PAGE> 12
(a) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment
or redemption of which moneys in the necessary amount and in the
required currency shall have been deposited in trust with the Trustee
or with any Paying Agent (other than the Company) or shall have been
set aside, segregated and held in trust by the Company for the holders
of such Securities (if the Company shall act as its own Paying Agent),
provided that if such securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice;
(c) Securities in substitution for which other
Securities shall have been authenticated and delivered, or which shall
have been paid, pursuant to the terms of Section 2.9 (except with
respect to any such Security as to which proof satisfactory to the
Trustee and the Company 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);
(d) Securities converted into Common Shares or
Preferred Shares in accordance with or as contemplated by this
Indenture; and
(e) Securities with respect to which the Company has
effected defeasance as provided in Article Ten.
"Paying Agent" means any Person (which may include the
Company) authorized by the Company to pay the principal of or interest, if any,
on any Security on behalf of the Company.
"Person" or "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," when used with respect to the Securities
of any Series, means the place or places where the principal of and interest, if
any, on the Securities of that Series are payable as specified pursuant to
Section 3.2.
"Preferred Shares" means any shares of capital stock issued by
the Company that are entitled to a preference or priority over the Common Shares
upon any distribution of the Company's assets, whether by dividend or upon
liquidation.
"principal" whenever used with reference to the Securities or
any Security or any portion thereof, shall be deemed to include "and premium, if
any."
4.
<PAGE> 13
"Responsible Officer" when used with respect to the Trustee
shall mean any officer within the corporate trust department (or any successor
department) of the Trustee including any vice president, assistant vice
president, assistant secretary, senior trust officer, trust officer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred at the
Corporate Trust Office because of his or her knowledge of and familiarity with
the particular subject.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any securities
authenticated and delivered under this Indenture.
"Senior Indebtedness" means (i) the principal of and premium,
if any, and unpaid interest on indebtedness for money borrowed, (ii) purchase
money and similar obligations, (iii) obligations under capital leases or leases
of property or assets made as part of any sale and leaseback transaction, (iv)
guarantees, assumptions or purchase commitments relating to, or other
transactions as a result of which the Company is responsible for the payment of,
such indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings; and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts,
and similar arrangements, unless, in each case, the instrument by which the
Company incurred, assumed or guaranteed the indebtedness or obligations
described in clauses (i) through (vii) hereof expressly provides that such
indebtedness or obligation is not senior in right of payment to the Securities.
"Series" or "Series of Securities" means all Securities of a
similar tenor authorized by a particular resolution of the Board of Directors.
"Subsidiary" means (i) a corporation, a majority of whose
capital stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly owned by the
Company, by one or more Subsidiaries of the Company or by the Company and one or
more Subsidiaries of the Company, (ii) a partnership, joint venture or similar
entity in which the Company, a Subsidiary of the Company or the Company and one
or more Subsidiaries of the Company, directly or indirectly, holds a majority
interest in the equity capital or profits or other similar interests of such
entity, or (iii) any other person (other than a corporation) in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such person.
"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof until a successor Trustee shall have become such pursuant
to the provision hereof,
5.
<PAGE> 14
and thereafter "Trustee" shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, "Trustee" as
used with respect to the Securities of any Series shall mean the Trustee with
respect to Securities of that Series.
"Trust Indenture Act of 1939" or "TIA" (except as otherwise
provided in, Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as
amended as in force at the date as of which this Indenture was originally
executed.
"United States of America" means the United States of America
(including the states and the District of Columbia), its territories,
possessions, the Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
"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 of "vice president."
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each Series
shall be substantially in such form (including temporary or definitive global
form) as shall be established by or pursuant to a resolution of the Board of
Directors or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture (the provisions of which shall be
appropriate to reflect the terms of the Series of Securities represented
thereby) and may have imprinted or otherwise reproduced thereon such legend or
legends, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing such Securities as
evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as (determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
This is one of the Securities of the Series designated herein
and referred to in the within-mentioned Indenture.
6.
<PAGE> 15
[ ,] as Trustee
By:________________________________
Authorized Signatory
or
[ ,] as Trustee
By:________________________________,
as Authentication Agent
By:________________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more Series. There
shall be established in or pursuant to a resolution of the Board of Directors
and set forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
Series,
(1) the title of the Securities of the Series (which title
shall distinguish the Securities of the Series from all other Securities issued
by the Company);
(2) any limit upon the aggregate principal amount of the
Securities of the Series that may be 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 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) if other than 100% of their principal amount, the
percentage of their principal amount at which the Securities of the Series will
be offered for sale to the public;
(4) the date or dates on which the principal of the Securities
of the Series is payable or the method of determination thereof;
(5) the rate or rates (which may be fixed or variable), or the
method or methods of determination thereof, at which the Securities of the
Series shall bear interest, if any, the date or dates from which such interest
shall accrue, the interest
7.
<PAGE> 16
payment dates on which such interest shall be payable and the record dates for
the determination of Holders to whom interest is payable;
(6) the place or places where the principal and interest, if
any, on Securities of the Series shall be payable (if other than as provided in
Section 3.2);
(7) the price or prices at which, the period or periods within
which and the terms and conditions upon which Securities of the Series may be
redeemed, in whole or in part, at the option of the Company;
(8) if other than the principal amount thereof, the portion of
the principal amount of Securities of the Series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 5.1 or
provable in bankruptcy pursuant to Section 5.2;
(9) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the Series whether pursuant to any sinking fund or
analogous provisions or pursuant to other provisions set forth therein or at the
option of a Holder thereof and the price or prices at which and the period or
periods within which and the terms and conditions upon which Securities of the
Series shall be redeemed, purchased or repaid, in whole or in part;
(10) if other than denominations of $1,000, and any integral
multiple thereof, the denominations in which Securities of the Series shall be
issuable;
(11) the form of the Securities, including such legends as
required by law or as the Company deems necessary or appropriate and the form of
any temporary global security which may be issued;
(12) whether, and under what circumstances, the Securities of
any Series shall be convertible into Securities of any other Series and, if so,
the terms and conditions upon which such conversion will be effected including
the initial conversion price or rate, the conversion period and other provisions
in addition to or in lieu of those described herein;
(13) if other than the Trustee, any trustees, authenticating
or Paying Agents, transfer agents or registrars or any other agents with respect
to the Securities of such Series;
(14) if the Securities of such Series do not bear interest,
the applicable dates for purposes of Section 4.1 hereof;
(15) whether the Securities of such Series are to be issuable
in whole or in part in the form of one or more Depository Securities, and, in
such case, the Depository for such Securities;
8.
<PAGE> 17
(16) the application, if any, of Section 10.1(B)(ii) to the
Securities of the Series;
(17) the obligation, if any, of the Company to permit the
conversion of the Securities of such Series into the Company's Common Shares or
Preferred Shares (and the class thereof), as the case may be, and the terms and
conditions upon which such conversion shall be effected (including, without
limitation, the initial conversion price or rate, the conversion period, any
adjustment of the applicable conversion price or rate and any requirements
relative to reservation of shares for purposes of conversion); and
(18) any other terms or conditions upon which the Securities
of the Series are to be issued (which terms shall not be inconsistent with the
provisions of this Indenture).
All Securities of any one Series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such resolution of the Board of Directors or in any such
indenture supplemental hereto. All Securities of any one Series need not be
issued at the same time, and unless otherwise provided, a Series may be reopened
for issuances of additional Securities of such Series.
SECTION 2.4 Authentication and Delivery of Securities. At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Securities of any Series executed by the Company to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery such Securities to or upon the written order of the
Company, signed by both (a) the chairman of its Board of Directors, or its
president or any vice president and (b) its treasurer or any assistant
treasurer, secretary or any assistant secretary without any further action by
the Company. In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive and (subject to Section 6.1) shall be fully
protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of
Directors relating to such Series, in each case certified by the
secretary or an assistant secretary of the Company;
(2) a supplemental indenture, if any;
(3) an Officers' Certificate setting forth the form and terms
of the Securities of such Series as required pursuant to Sections 2.1
and 2.3, respectively, and prepared in accordance with Section 11.5;
and
(4) an Opinion of Counsel, prepared in accordance with Section
11.5, which shall state
9.
<PAGE> 18
(a) that the form or forms and terms of such
Securities have been established by or pursuant to a
resolution of the Board of Directors or by a supplemental
indenture as permitted by Sections 2.1 and 2.3 in conformity
with the provisions of this Indenture and in conformity with
such resolution; and
(b) that such Securities have been duly authorized,
and, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any
conditions specified in such opinion of counsel, will
constitute valid and binding obligations of the Company
enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general
equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
The Trustee shall have the right to decline to authenticate
and deliver any Securities under this Section if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under this Indenture in a manner not reasonably acceptable to the
Trustee.
SECTION 2.5 Execution of Securities. The Securities shall be
signed on behalf of the Company by both (a) the chairman of its Board of
Directors or its president or any vice president and (b) its treasurer or any
assistant treasurer or its secretary or any assistant secretary, under its
corporate seal which may, but need not, be attested. Such signatures may be the
manual or facsimile signatures of such officers. The seal of the Company may be
in the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical and other minor errors or
defects in any such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Company who shall have signed any
of the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to be
such officer of the Company; and any Security may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Company, although at the date of
the execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited and executed by the Trustee by the manual
signature of one of its authorized signatories shall be entitled to the benefits
of this Indenture or be valid or obligatory for
10.
<PAGE> 19
any purpose. Such certificate by the Trustee upon any Security executed by the
Company shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been
duly authenticated and delivered hereunder but never issued and sold by the
Company, the Company shall deliver such Security to the Trustee for cancellation
as provided in Section 2.10 together with a written statement (which need not
comply with Section 11.5 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of the Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of the Indenture.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities shall be issuable in denominations as shall be
specified as contemplated by Section 2.3. In the absence of any such
specification with respect to the Securities of any Series, Securities shall be
issuable in denominations of $1,000 and any integral multiple thereof, and
interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The Securities shall be numbered, lettered, or otherwise distinguished
in such manner or in accordance with such plan as the officers of the Company
executing the same may determine with the approval of the Trustee as evidenced
by the execution and authentication thereof.
Each Security shall be dated the date of its authentication.
Unless otherwise provided as contemplated by Section 2.3,
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 the payment of such interest.
The term "record date" as used with respect to any interest
payment date (except for a date for payment of defaulted interest) shall mean
the date specified as such in the terms of the Securities of any particular
Series, or, if no such date is so specified, the close of business on the
fifteenth day preceding such interest payment date, whether or not such record
date is a Business Day.
Any interest on any Security of any Series which is payable,
but is not punctually paid or duly provided for, on any interest payment date
(called "defaulted interest" for purposes of this Section) shall forthwith cease
to be payable to the Registered Holder on the relevant record date by virtue of
his having been such Holder; and such defaulted interest may be paid by the
Company, at its election in each case, as provided in clause (1) or clause (2)
below:
11.
<PAGE> 20
(1) 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 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 Security of such Series 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 in
respect of Securities of such Series 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 thereof to be mailed, first class
postage prepaid, to each Registered Holder 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 in respect of Securities of such Series shall
be paid to the person in whose names such Securities (or their
respective predecessor Securities) are registered on such special
record date and such defaulted interest shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any defaulted interest on
the Securities of any Series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
the Securities of that Series 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
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon 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 2.8 Registration, Transfer and Exchange. The Company
will cause to be kept at each office or agency to be maintained for the purpose
as provided in Section 3.2 a register or registers in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for the
registration and the registration of the transfer of, the Securities. The
Trustee is hereby appointed Security registrar for purposes of registering, and
registering transfers of, the Securities.
12.
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Upon surrender for registration of transfer of any Security of
any Series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Company shall execute and the Trustee shall
authenticate and make available for delivery in the name of the transferee or
transferees a new Security or Securities of the same Series and of a like tenor
and containing the same terms (other than the principal amount thereof, if more
than one Security is executed, authenticated and delivered with respect to any
security so presented, in which case the aggregate principal amount of the
executed, authenticated and delivered Securities shall equal the principal
amount of the Security presented in respect thereof) and conditions.
All Securities issued upon any 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 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.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Securities, other than exchanges
pursuant to Sections 2.11, 8.5 or 12.3 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a 15-day period prior to the day of
mailing of the relevant notice of redemption or (ii) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except,
in the case of any Security to be redeemed in part, the portion thereof not
redeemed.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become mutilated
or defaced or be destroyed, lost or stolen, the Company shall execute, and upon
the written request of any officer of the Company, the Trustee shall
authenticate and make available for delivery a new Security of the same Series
and of like tenor and principal amount and with the same terms and conditions,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated or defaced Security or in lieu of and substitution for the
Security so destroyed, lost or stolen. In every case the applicant for a
substitute Security shall furnish to the Company and to the Trustee and to any
agent of the Company or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Security and of the ownership thereof.
13.
<PAGE> 22
Upon the issuance of any substitute Security, 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. In case any Security
which has matured or is about to mature or has been called for redemption in
full shall become mutilated or defaced or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
or defaced Security); provided, however, that unless otherwise provided pursuant
to Section 2.3, the applicant for such payment shall furnish to the Company and
to the Trustee and any agent of the Company or the Trustee such security or
indemnity as any of them may require to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee and any agent of the Company or the Trustee evidence
to their satisfaction of the destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security of any Series issued pursuant to the
provisions of this Section by virtue of the fact that any Security is destroyed,
lost or stolen shall constitute an 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 (but
shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such Series
duly authenticated and delivered hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, destroyed, lost or stolen Securities and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities. All Securities
surrendered for payment, redemption, registration of transfer or exchange, or
for credit against any payment in respect of a sinking or analogous fund, shall,
if surrendered to the Company or any agent of the Company or the Trustee, be
delivered to the Trustee for cancellation or, if surrendered to the Trustee,
shall be cancelled by it; and no Securities shall be issued in lieu thereof,
except as expressly permitted by any of the provisions of this Indenture. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold and
all Securities so delivered shall be promptly cancelled by the Trustee. The
Trustee shall return cancelled Securities held by it to the Company. If the
Company shall acquire any of the Securities, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any Series, the Company may execute and the Trustee
shall authenticate and make available for delivery temporary Securities for such
Series
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(printed, lithographed, typewritten or otherwise reproduced, in each case in
form reasonably acceptable to the Trustee). Temporary Securities of any Series
may be issued of any authorized denomination, and substantially in the form of
the definitive Securities of such Series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company with the reasonable concurrence of the Trustee.
Temporary Securities may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Security shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Company shall execute and shall
furnish definitive securities of such Series and thereupon temporary Securities
of such Series may be surrendered in exchange therefor without charge at each
office or agency to be maintained by the Company for that purpose pursuant to
Section 3.2, and the Trustee shall authenticate and make available for delivery
in exchange for such temporary Securities of such Series a like aggregate
principal amount of definitive Securities of the same Series of authorized
denominations. Until so exchanged, the temporary Securities of any Series shall
be entitled to the same benefits under this Indenture as definitive Securities
of such Series.
SECTION 2.12 Securities in Global Form. If Securities of a
Series are issuable in global form, as specified as contemplated by Section 2.3,
then, notwithstanding clause (10) of Section 2.3 and the provisions of Section
2.7, such Security shall represent such of the Outstanding Securities of such
series as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Outstanding Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby may be made by the Trustee in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or in the company order to be delivered to the Trustee
pursuant to Section 2.4. Subject to the provisions of Section 2.4, the Trustee
shall deliver and redeliver any Security in definitive global form in the manner
and upon written instructions given by the Person or Persons specified therein
or in the applicable company order. If a company order pursuant to Section 2.4
has been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 11.5 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 2.6 shall apply
to any Security represented by a Security in global form if such Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 11.5 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 2.6.
15.
<PAGE> 24
Notwithstanding the provisions of Sections 2.3 and 2.7, unless
otherwise specified as contemplated by Section 2.3, payment of principal of and
any interest on any Security in definitive global form shall be made to the
Person or Persons specified therein.
Except as provided in the preceding paragraph, the Company,
the Trustee and any agent of the Company and the Trustee shall treat a Person as
the Holder of such principal amount of outstanding Securities represented by a
definitive global Security as shall be specified in a written statement of the
Holder of such definitive global Security.
ARTICLE THREE
COVENANTS OF THE COMPANY
SECTION 3.1 Payment of Principal and Interest. The Company
covenants and agrees for the benefit of each particular Series of Securities
that it will duly and punctually pay or cause to be paid the principal of, and
interest on, each of the Securities of such Series in accordance with the terms
of the Securities of such Series and this Indenture.
SECTION 3.2 Offices for Payment, etc. So long as any of the
Securities remain outstanding, the Company will maintain the following for each
Series: an office or agency (a) where the Securities may be presented for
payment or conversion, (b) where the Securities may be presented for
registration of transfer and for exchange as in this Indenture provided, and (c)
where notices and demands to or upon the Company in respect of the Securities or
of this Indenture may be served. The Company will give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. In case the Company shall fail to so designate or maintain any
such office or agency or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the Corporate Trust Office. Unless otherwise specified
pursuant to Section 2.3, the Trustee is hereby appointed Paying Agent.
SECTION 3.3 Paying Agents. Whenever the Company shall appoint
a Paying Agent other than the Trustee with respect to the Securities of any
Series, it will cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such Agent
for the payment of the principal of or interest on the Securities of such Series
(whether such sums have been paid to it by the Company or by any other obligor
on the Securities of such Series) in trust for the benefit of the Holders of the
Securities of such Series or of the Trustee, and upon the occurrence of an Event
of Default and upon the written request of the Trustee, pay over all such sums
received by it to the Trustee, and
16.
<PAGE> 25
(b) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities of such series) to make any
payment of the principal of or interest on the Securities of such Series when
the same shall be due and payable.
The Company will, on or prior to each due date of the
principal of or interest on the Securities of such Series, deposit in a timely
manner with the Paying Agent a sum sufficient to pay such principal or interest
so becoming due, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect
to the Securities of any Series, it will, on or before each due date of the
principal of or interest on the Securities of such Series, set aside, segregate
and hold in trust for the benefit of the Holders of the Securities of such
Series a sum sufficient to pay such principal or interest so becoming due. The
Company will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the
Company may at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of Securities hereunder, or
for any other reason, pay or cause to be paid to the Trustee all sums held in
trust for any such Series by the Company or any Paying Agent hereunder, as
required by this Section, such sums to be held by the Trustee upon the trusts
herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.4 Written Statement to Trustee. The Company shall
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, a brief certificate (which need not comply
with Section 11.5) from the principal executive, financial or accounting officer
of the Company as to his or her knowledge, after due inquiry, of the Company's
compliance with all conditions and covenants under the Indenture (such
compliance to be determined without regard to any period of grace or requirement
of notice provided under the Indenture).
SECTION 3.5 Calculation of Original Issue Discount. The
Company shall file with the Trustee promptly at the end of each calendar year a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on Outstanding Securities as of the end of
such year.
17.
<PAGE> 26
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.1 Company to Furnish Trustee Information as to Names
and Addresses of Securityholders. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Securities of each Series:
(a) semiannually and not more than 15 days after each record
date for the payment of interest on such Securities, as hereinabove
specified, as of such record date, and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after receipt by the Company of any such
request, such list to be as of a date not more than 15 days prior to
the time such information is furnished,
provided that if and so long as the Trustee shall be the Security registrar for
such Series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders'
Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of each Series of Securities contained in the most recent list furnished
to it as provided in Section 4.1 or maintained by the Trustee in its capacity as
Security registrar for such Series, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) In case 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 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 a particular Series (in which
case the applicants must all hold Securities of such Series) or with Holders of
all Securities with respect to their rights under this Indenture or under such
Securities and such application 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 to such applicants access to the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, or
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<PAGE> 27
(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 the provisions
of subsection (a) of this Section, 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 to such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such Series or all Securities, as the
case may be, whose name and address appear in the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section, 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 Securities, as the case may
be, or could 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 such 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 all such Securityholders 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) Each and every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of the Company or 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 the
provisions of subsection (b) of this Section, 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
such subsection (b).
SECTION 4.3 Reports by the Company. The Company
covenants:
(a) to file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the annual
reports and of the information, documents, and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange
19.
<PAGE> 28
Act of 1934, as amended, or if the Company is not required to file
information, documents, or reports pursuant to either of such Sections,
then to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such of the supplementary and periodic information, documents, and
reports which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, or in respect of a security listed
and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents, and reports with
respect to compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to time by
such rules and regulations; and
(c) to transmit by mail to the Holders of Securities in the
manner and to the extent required by Sections 6.6 and 11.4, within 30
days after the filing thereof with the Trustee, such summaries of any
information, documents, and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section as may be required
to be transmitted to such Holders by rules and regulations prescribed
from time to time by the Commission.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default. "Event of Default" with respect to Securities of
any Series wherever used herein, means any one of the following events which
shall have occurred and be continuing (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
it is either inapplicable to a particular Series or it is specifically deleted
or modified in or pursuant to the supplemental indenture or resolution of the
Board of Directors establishing such Series of Securities or in the form of
Security for such Series:
(a) default in the payment of any installment of interest upon
any of the Securities of such Series as and when the same shall become
due and payable, and continuance of such default for a period of 30
days; or
(b) default in the payment of all or any part of the principal
of any of the Securities of such Series as and when the same shall
become due and payable, either at maturity, upon any redemption, by
declaration or otherwise; or
20.
<PAGE> 29
(c) default in the performance, or breach of any covenant or
warranty of the Company contained in the Securities of such Series or
in this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture
solely for the benefit of a Series of Securities other than that
Series), 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 that 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
(d) default under any bond, debenture, note or other evidence
of indebtedness of the Company or any other Subsidiary, or under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness of the Company
or any Subsidiary, whether such indebtedness now exists or is hereafter
created, which default involves the failure to pay principal on
indebtedness at the final maturity thereof after the expiration of any
applicable grace period with respect thereto, or which has resulted in
indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise become due and payable in an aggregate
amount in excess of $30,000,000;
(e) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company 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 for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking
21.
<PAGE> 30
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the
benefit of creditors; or
(g) any other Event of Default provided with respect to
Securities of such Series in the supplemental indenture or resolution
of the Board of Directors establishing such Series.
If an Event of Default occurs and is continuing with respect to the Securities
of any Series, then and in each and every such case, unless the principal of all
Securities of such Series shall have already become due and payable, either the
Trustee for such Series or the Holders of not less than 25% in aggregate
principal amount at maturity of the Securities of such Series then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Holders), may declare the principal of all the Securities of such Series to
be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable. This provision, however, is
subject to the condition that if at any time after the principal of the
Securities of such Series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all the Securities of such Series and the principal of
any and all Securities of such Series which shall have become due otherwise than
by such acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, upon overdue
installments of interest, at the rate borne by the Securities of such Series to
the date of such payment or deposit) and in Dollars such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel and all other expenses and liabilities incurred, and all
advances made, by the Trustee, its agents, attorneys and counsel and any and all
defaults under this Indenture, other than the nonpayment of the principal of
Securities of such Series which shall have become due by such acceleration,
shall have been remedied, then and in every such case the Holders of a majority
in aggregate principal amount at maturity of the Securities of such Series then
Outstanding, by written notice to the Company and to the Trustee for the
Securities of such Series, may waive all defaults and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt. The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any Series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days, or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
Series when the same shall have become due and payable, whether upon maturity of
the Securities of such Series or upon any redemption or by declaration or
otherwise, then upon demand of the Trustee for the Securities of such Series,
the Company will pay to the Trustee for the Securities of such
22.
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Series for the benefit of the Holders of the Securities of such Series the whole
amount that then shall have become due and payable on all Securities of such
Series for principal of or interest, as the case may be (with interest to the
date of such payment upon the overdue principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest specified in the Securities of
such Series); and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including reasonable
compensation to, and all expenses and liabilities incurred and all advances made
by, the Trustee and each predecessor Trustee and their respective agents,
attorneys and counsel.
Until such demand is made by the Trustee, the Company may pay
the principal of and interest on the Securities of any Series to the persons
entitled thereto, whether or not the principal of and interest on the Securities
of such Series are overdue.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee for the Securities of such series, in its own name
and as trustee of an express trust, shall be entitled and empowered to institute
any action or proceedings at law or in equity for the collection of the sums so
due and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or other obligor upon such Securities and collect in the manner provided
by law out of the property of the Company or other obligor upon such Securities,
wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the
Company or any other obligor upon the Securities under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Company or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to the
Company or other obligor under the Securities of any Series, or to the creditors
or property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of any 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 pursuant to the provisions of this Section,
shall be entitled and empowered, by intervention in such proceedings or
otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Securities
of any Series, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to, and all expenses
and liabilities incurred and all advances made by, the Trustee and each
predecessor Trustee, and their respective agents, attorneys and
counsel) and of the Securityholders allowed in any judicial
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proceedings relative to the Company or other obligor upon all
Securities of any Series, or to the creditors or property of the
Company or such other obligor, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Securityholders and
of the Trustee on their behalf; and any trustee, receiver, or
liquidator, custodian or other similar official is hereby authorized by
each of the Holders to make payments to the Trustee for the Securities
of such Series, and, in the event that such Trustee shall consent to
the making of payments directly to the Securityholders, to pay to such
Trustee such amounts as shall be sufficient to cover reasonable
compensation to, and all expenses and liabilities incurred and all
advances made by, such Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel and all other amounts due to
such Trustee or any predecessor Trustee pursuant to Section 6.7.
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 of any Series 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.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee for
the Securities of such Series without the possession of any of the Securities of
such Series or the production thereof at any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Securities in
respect of which such action was taken.
In any proceedings brought by the Trustee for the Securities
of such Series (and also any proceedings involving the interpretation of any
provision of this Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the Holders of the Securities in respect of which
such action was taken, and it shall not be necessary to make any Holders of such
Securities parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by
the Trustee for the Securities of such Series pursuant to this Article in
respect of the Securities of any series shall be applied in the following order
at the date or dates fixed by such Trustee and, in case of the distribution of
such moneys on account of principal or interest, upon presentation of the
several Securities in respect of which moneys have been collected and stamping
(or otherwise noting) thereon the payment, or issuing Securities of such Series
in reduced principal amounts in exchange for the presented Securities of like
Series if only partially paid, or upon surrender thereof if fully paid:
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FIRST: To the payment of costs and expenses applicable to such
Series in respect of which moneys have been collected, including
reasonable compensation to, and all expenses and liabilities incurred
and all advances made by, the Trustee and each predecessor Trustee and
their respective agents and attorneys and all other amounts due to the
Trustee or any predecessor Trustee pursuant to Section 6.7;
SECOND: To the payment of the amounts then due and unpaid to
the holders of Senior Indebtedness, to the extent required by Article
Fourteen;
THIRD: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities of such Series in respect
of which moneys have been collected, such payments to be made ratably
to the persons entitled thereto, without discrimination or preference,
according to the amounts then due and payable on such Securities for
principal and interest; and
FOURTH: To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.
SECTION 5.4 Restoration of Rights on Abandonment of
Proceedings. In case the Trustee for the Securities of any Series shall have
proceeded to enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case, subject to the
determination in any such proceeding, the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
SECTION 5.5 Limitations on Suits by Securityholders. No Holder
of any Security of any Series shall have any right by virtue or by availing of
any provision of this Indenture to institute any action or proceeding at law or
in equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of an Event of Default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of not less than 25% in aggregate principal amount of the Securities of
such Series then Outstanding shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee indemnity reasonable to it, as it may require,
against the costs, expenses and liabilities to be incurred therein or thereby
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute any such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee during such 60-day period by Holders of a majority in principal amount
of the Securities of such Series then Outstanding; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security with every other taker and Holder of a Security and the Trustee, that
no
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one or more Holders of Securities of any Series shall have any right in any
manner whatever, by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other such Holder of Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities of the applicable Series.
SECTION 5.6 Unconditional Right of Securityholders to
Institute Certain Suits. Notwithstanding any provision in this Indenture and any
provision of any Security, the right of any Holder of any Security to receive
payment of the principal of and (subject to Section 2.7) interest on such
Security at the respective rates, in the respective amount on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 5.7 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default. Except as provided in Section 2.9 and Section 5.5, 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 given 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.
No delay or omission of the Trustee or of any Securityholder
to exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.5, every power and remedy given by this
Indenture or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
the Securityholders.
SECTION 5.8 Control by Securityholders. The Holders of a
majority in aggregate principal amount of the Securities of each Series affected
(with each Series treated as a separate class) at the time Outstanding 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 by
this Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that the Trustee shall have the right to decline to follow any such direction if
the Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all Series so affected not joining in the giving of said
direction, it being understood that the Trustee shall have no
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duty to ascertain whether or not such actions or forebearances are unduly
prejudicial to such Holders.
SECTION 5.9 Waiver of Past Defaults. The Holders of a majority
in aggregate principal amount of the Securities of such Series at the time
outstanding may on behalf of the Holders of all the Securities of such Series
waive any past default hereunder or its consequences, except a default in the
payment of the principal of or interest on any of the Securities of such Series.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 5.10 Right of Court to Require Filing of Undertaking
to Pay 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, suffered 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 and expenses, 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 of any Series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such Series, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security.
SECTION 5.11 Suits for Enforcement. In case an Event of
Default has occurred, has not been waived and is continuing, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing with
respect to the Securities of any Series, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with
respect to the Securities of any Series:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into the document against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and any
statements, the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, 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 examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 6.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.8.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section
6.1.
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(e) No provision of this Indenture shall require the Trustee
to extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder 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 6.2 Rights of Trustee.
(a) The Trustee may rely on, and shall be protected in relying
upon, any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) Subject to the provisions of Section 6.1(c), the Trustee
shall not be liable for any action it takes or omits to take in good faith which
it believes to be authorized or within its rights or powers.
(d) Before the Trustee acts or refrains from acting, the
Trustee may consult with counsel of its selection and the 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 in accordance with such advice or Opinion
of Counsel.
(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 Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee indemnity reasonable to it against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(f) 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.
(g) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, Officer's Certificate, or other certificate, statement, instrument,
opinion, report, notice, request, consent,
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order, approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders of not
less than a majority in aggregate principal amount of the Securities then
outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if advanced by the Trustee, shall
be repaid by the Company upon demand.
(h) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(i) The Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions or agreements on
the part of the Company, except as otherwise set forth herein, but the Trustee
may require of the Company full information and advice as to the performance of
the covenants, conditions and agreements contained herein and shall be entitled
in connection herewith to examine the books, records and premises of the
Company.
(j) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or willful default.
(k) Except for (i) a default under Sections 5.1(a) or (b)
hereof, or (ii) any other event of which the Trustee has "actual knowledge" and
which event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any default or event unless specifically notified in
writing of such event by the Company or the Holders of not less than 25% in
aggregate principal amount of the Securities Outstanding; as used herein, the
term "actual knowledge" means the actual fact or statement of knowing, without
any duty to make any investigation with regard thereto.
SECTION 6.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, registrar or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 6.10 and 6.11.
SECTION 6.4 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, it shall not be responsible for any statement in the
registration statement for the Securities under the Securities Act of 1933, as
amended, or in the Indenture or the Securities (other than its certificate of
authentication).
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SECTION 6.5 Notice of Defaults. If a default occurs and is
continuing with respect to any Securities of any Series and if the Trustee has
actual knowledge of such default, the Trustee shall give to each Securityholder
of such Series notice of the default within 90 days after such default occurs.
Except in the case of a default described in Section 5.1(a) or (b), the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of such Series.
SECTION 6.6 Reports by Trustee to Holders. Within 60 days
after each [ ] 1 beginning with the [ ] 1 following the date of this Indenture,
the Trustee shall mail to each Securityholder of any Series and each other
person specified in TIA Section 313(c) a brief report dated as of such [ ] 1
that complies with TIA Section 313(a) to the extent required thereby. The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the Commission and each
securities exchange on which the Securities of any Series are listed. The
Company agrees promptly to notify the Trustee whenever the Securities of any
Series become listed on any securities exchange and of any delisting thereof.
SECTION 6.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time, and the Trustee
shall be entitled to, in Dollars such compensation as shall be agreed
to in writing between the Company and the Trustee 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) 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, advances and
disbursements of its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its negligence
or willful misconduct; and
(c) to indemnify the Trustee in Dollars for, and to hold it
harmless against, any loss, liability or expense arising out of or in
connection with the acceptance or administration of this trust or the
performance of its duties hereunder, including the costs and expenses
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent that any such loss, liability or
expense may be attributable to its negligence or willful misconduct.
As security for the performance of the obligations of the
Company in this Section 6.7, the Trustee shall have a lien prior to the
Securities on all money or property
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held or collected by the Trustee, except that held in trust to pay the principal
of or interest, if any, on particular Securities.
"Trustee" for purpose of this Section 6.7 includes any
predecessor trustee, provided that the negligence or bad faith of any Trustee
shall not be attributable to any other Trustee.
The Company's payment obligations pursuant to this Section 6.7
shall constitute additional indebtedness hereunder and shall survive the
discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a default specified in Sections 5.1(d) and 5.1(e), such expenses
(including reasonable fees and expenses of counsel) are intended to constitute
expenses of administration under bankruptcy law.
SECTION 6.8 Replacement of Trustee. The Trustee may resign at
any time with respect to Securities of one or more Series by so notifying the
Company; provided, however, no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this Section 6.8. The
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any Series may remove the Trustee with respect to such Series at
the time outstanding by so notifying the Trustee and the Company. The Company
shall remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, with respect to the Securities of one or
more Series, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee with respect to the Securities of such Series.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture with respect to the Securities of such Series. The
successor Trustee shall mail a notice of its succession to Securityholders so
affected. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee, subject to the lien provided for in Section
6.7.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a
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majority in aggregate Principal Amount of the Securities at the time outstanding
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 6.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
SECTION 6.9 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
SECTION 6.10 Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a)(1). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. Neither the Company nor
any person directly or indirectly controlling, controlled by or under common
control with the Company shall serve as Trustee hereunder. The Trustee shall
comply with TIA Section 310(b).
SECTION 6.11 Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by a specified percentage in principal amount of the Securityholders of any or
all Series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage of
Securityholders in person or by 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. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Article.
(b) The ownership of Securities shall be proved by the
Security register.
SECTION 7.2 Proof of Execution of Instruments. Subject to
Sections 6.1 and 6.2, the execution of any instrument by a Securityholder or his
agent or proxy
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may be proved in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee.
SECTION 7.3 Holders to Be Treated as Owners. The Company, the
Trustee and any agent of the Company or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security register
for such Series as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of and interest on such Security and for all other purposes; and
neither the Company nor the Trustee nor any agent of the Company or the Trustee
shall be affected by any notice to the contrary. All such payments so made to
any such person, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Security.
SECTION 7.4 Securities Owned by Company Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have concurred
in any direction, consent or waiver under this Indenture, Securities which are
owned by the Company or any other obligor on the Securities with respect to
which such determination is being made or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities with respect to which such
determination is being made shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver only Securities which the Trustee knows are so
owned 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 so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any other obligor on
the Securities.
SECTION 7.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all Series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor, irrespective of whether or not any notation
in regard thereto is made upon any such Security. Any action taken by the
Holders of the
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percentage in aggregate principal amount of the Securities of any or all Series,
as the case may be, specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and the Holders of
all the Securities affected by such action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Company, when authorized by a resolution of its Board of
Directors, and the Trustee for the Securities of any and all Series may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of the execution thereof), in form satisfactory to such
Trustee, for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more Series any
property or assets;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article Nine;
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of
the Holders of Securities of any or all Series and, if such additional
covenants are to be for the benefit of less than all the Series of
Securities, stating that such covenants are being added solely for the
benefit of such Series;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Directors may deem necessary
or desirable and which shall not materially and adversely affect the
interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any Series
as permitted by Sections 2.1 and 2.3; or
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more Series 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 the one Trustee,
pursuant to the requirements of Section 6.8.
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The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each Series affected by such supplemental
indenture (voting as one class), the Company, when authorized by a resolution of
its Board of Directors, and the Trustee for such Series of Securities may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of each such Series; provided,
however, that no such supplemental indenture shall (a) extend the final maturity
of any Security, or reduce the principal amount thereof or any premium thereon,
or reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof, or impair or affect the right of any
Securityholder to institute suit for payment thereof or, if the Securities
provide therefor, any right of repayment at the option of the Securityholder
without the consent of the Holder of each Security so affected, or (b) reduce
the aforesaid percentage of Securities of any Series, the consent of the Holders
of which is required for any such supplemental indenture, without the consent of
the Holders of each Security so affected, or (c) reduce the amount of principal
payable upon acceleration of the maturity of any Original Issue Discount
Security.
Upon the request of the Company, accompanied by a copy of a
resolution of the Board of Directors certified by the secretary or an assistant
secretary of the Company authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee for such Series of Securities of
evidence of the consent of securityholders as aforesaid and other documents, if
any, required by Section 7.1, the Trustee for such Series of Securities shall
join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects such Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case such Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
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It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Company shall give notice in the manner and to the extent provided in Section
11.4 to the Holders of Securities of each Series affected thereby at their
addresses as they shall appear on the Security register of the Company, setting
forth in general terms the substance of such supplemental indenture. Any failure
of the Company to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
of Securities of each Series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Eight complies with the
applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any Series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear, upon the direction of the Company, a notation in form
satisfactory to the Trustee for the Securities of such Series as to any matter
provided for by such supplemental indenture. If the Company or the Trustee shall
so determine, new Securities of any Series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of such Series then outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Company May Consolidate, etc. on Certain Terms.
The Company may consolidate with, or sell, convey or lease all or substantially
all of its assets to, or merge with or into, any other corporation, provided
that in any such case,
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(i) either the Company shall be the continuing corporation, or the successor
corporation shall be organized and validly existing under the laws of the United
States of America or any State thereof or the District of Columbia and shall
expressly assume the due and punctual payment of the principal of and interest
on all the securities according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed or observed by the Company by supplemental indenture
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation, and (ii) the Company or such successor corporation, as the case may
be, shall not, immediately after such merger or consolidation, or such sale,
conveyance or lease, be in material default in the performance or observance of
any such covenant or condition.
SECTION 9.2 Successor Corporation Substituted. In case of any
such consolidation, merger, sale, lease or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Company prior to such
succession any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall make available for delivery any Securities
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance the Company (or
any successor corporation which shall theretofore have become such in the manner
described in this Article) shall be discharged from all obligations and
covenants under this Indenture and the Securities and may be liquidated and
dissolved.
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive an Opinion of
Counsel, prepared in accordance with Section 11.5, as conclusive evidence that
any such consolidation, merger, sale, lease or conveyance, and any such
assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
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ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture.
(A) If at any time (a) the Company shall have paid or caused
to be paid the principal of and interest on all the Securities of any Series
Outstanding hereunder (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9) as and
when the same shall have become due and payable, or (b) the Company shall have
delivered to the Trustee for cancellation all Securities of any Series
theretofore authenticated (other than any Securities of such Series which have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.9) or (c) (i) all the Securities of such Series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and (ii) the Company shall
have irrevocably deposited or caused to be deposited with the Trustee as trust
funds the entire amount (other than moneys repaid by the Trustee or any Paying
Agent to the Company in accordance with Section 10.4) or Government Obligations
maturing as to principal and interest in such amounts and at such times as will
ensure the availability of cash sufficient to pay at maturity or upon redemption
all Securities of such Series (other than any Securities of such Series which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.9) not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such date
of maturity as the case may be, and if, in any such case, the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company with
respect to Securities of such Series, then this Indenture shall cease to be of
further effect with respect to Securities of such Series (except as to (i)
rights of registration of transfer and exchange, and the Company's right of
optional redemption (provided the Company provides sufficient funds to effect
such optional redemption), (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Securities, (iii) rights of Holders to receive payments of
principal thereof and interest thereon upon the original stated due dates
therefor (but not upon acceleration) and remaining rights of the Holders to
receive mandatory sinking fund payments, if any, (iv) the rights, obligations
and immunities of the Trustee hereunder and (v) the rights of the
Securityholders of such Series as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them), and,
subject to Section 10.5, the Trustee, on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel and at the cost and expense of
the Company, shall execute proper instruments acknowledging such satisfaction of
and discharging this Indenture with respect to such Series; provided, that the
rights of Holders of the Securities to receive amounts in respect of principal
of and interest on the Securities held by them shall not be delayed longer than
required by then-applicable mandatory rules or policies of any securities
exchange upon which the Securities are listed. The Company agrees to reimburse
the Trustee for any costs or
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expenses thereafter reasonably and properly incurred and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture and the Securities of such Series.
(B) (i) In addition to the provisions of Section 10.1(A), the
Company may, at its option by or pursuant to, or otherwise in a manner or by
such Persons as may be authorized pursuant to, one or more resolutions duly
adopted by the Board of Directors, at any time with respect to the Securities of
any Series, elect to have defeasance under subsection (ii) of this Section
10.1(B) be applied to the Outstanding Securities of such Series provided that
provision therefor is made for such application pursuant to Section 2.3 and the
applicable conditions thereto as set forth in this Section 10.1(B) have been
satisfied.
(ii) Upon the Company's exercise of the option
referenced in Section 10.1(B)(i) applicable to this subsection, the Company may
terminate its obligations under the Outstanding Securities of any Series and
this Indenture with respect to such Series on the date the conditions set forth
below are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the Outstanding Securities of such Series
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense and request of the Company, shall execute proper instruments
acknowledging the same), except for the following: (1) the rights of Holders of
Outstanding Securities of such Series to receive payments in respect of the
principal of and interest on such Securities when such payments are due, (2) the
Company's obligations with respect to such Securities under Sections 2.8, 2.9,
3.2, 6.7, 10.4 and 10.5, (3) the rights, powers, trusts, duties and immunities
of the Trustee hereunder, and (4) this Section 10.1(B).
(iii) The following shall be the conditions to the
application of Section 10.1(B) (ii) to the Outstanding Securities of such
Series:
(1) The Company shall have irrevocably deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 6.10 who shall agree to comply with the
provisions of this Section 10.1(B) applicable to it) under the terms of
an irrevocable trust agreement, as trust funds in trust solely for the
purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
Securities of such Series, (I) cash in the currency or currency unit
required, or (II) Government Obligations maturing as to principal and
interest in such amounts (payable in the currency in which the
Securities of such Series are payable) and at such times as are
sufficient, to pay the principal of and interest on the Outstanding
Securities of such Series to maturity or redemption, as the case may
be, or (III) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and
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which shall be applied by the Trustee (or other qualifying trustee) to
pay and discharge, (x) the principal of and each installment of
principal of and interest, if any, on the Outstanding Securities of
such Series on the stated maturity of such principal or installment of
principal or interest, if any, and (y) any mandatory sinking fund
payments or analogous payments applicable to the Outstanding Securities
of such Series on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities.
Such irrevocable trust agreement shall include, among other things, (a)
provision for the payments referenced in clauses (x) and (y) of the
immediately preceding sentence, (b) the payment of the reasonable
expenses of the Trustee incurred or to be incurred in connection with
carrying out such trust provisions, (c) rights of registration,
transfer, substitution and exchange of Securities of such Series in
accordance with the terms stated in this Indenture and (d) continuation
of the rights and obligations and immunities of the Trustee as against
the Holders of Securities of such Series as stated in this Indenture.
(2) No Event of Default or event which with notice or
lapse of time or both would constitute an Event of Default with respect
to the Securities of such Series shall have occurred and be continuing
on the date of such deposit or, insofar as Sections 5.1(d) and 5.1(e)
are concerned, at any time during the period ending on the 91st day
after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(3) Such defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party
or by which it is bound.
(4) The Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that Securityholders of such Series
will not recognize income, gain or loss for Federal income tax purposes
as a result of such deposit and discharge and will be subject to
Federal income tax on the same amounts and in the same manner and at
the same time as would have been the case if such deposit and
defeasance had not occurred.
(5) The Company shall have delivered to the Trustee
an Officers' Certificate and Opinion of Counsel, each stating that all
conditions precedent provided for herein relating to the deposit and
defeasance contemplated by this Section 10.1(B) have been complied
with.
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 10.4, all moneys deposited with the
Trustee pursuant to Section 10.1 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the Holders of the particular Securities of
such Series for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become
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due thereon for principal and interest; but such money need not be segregated
from other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
Securities of any Series, all moneys then held by any Paying Agent (other than
the Company) under the provisions of this Indenture with respect to such Series
of Securities shall, upon demand of the Company, be paid to the Trustee and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and
Paying Agent. Any moneys deposited with or paid to the Trustee or any Paying
Agent (including the Company acting as its own Paying Agent) for the payment of
the principal of or interest on any Security of any Series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, promptly be repaid to the
Company by the Trustee for such Series or such Paying Agent (except that with
respect to any amounts then held by the Company in trust as its own Paying Agent
no such request need be given and at such time the Company shall be discharged
from its duty to hold such moneys in trust as Paying Agent), and the Holder of
the Security of such Series shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Company for any payment which such Holder may be
entitled to collect, and all liability of the Trustee or any Paying Agent with
respect to such moneys shall thereupon cease. Anything in this Article Ten to
the contrary notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon the written request of the Company any money or
Government Obligations held by it as provided in Section 10.1(B)(iii) 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 such defeasance or covenant defeasance, as the case may be, in accordance
with the provisions of this Indenture.
SECTION 10.5 Reinstatement of Company's Obligations. If the
Trustee is unable to apply any funds or Government Obligations in accordance
with Section 10.1 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 of any Series for which such application is
prohibited shall be revived and reinstated as if no deposit had occurred
pursuant to Section 10.1 until such time as the Trustee is permitted to apply
all such funds or Government Obligations in accordance with Section 10.1;
provided, however, that if the Company has made any payment of interest on or
principal of any of such Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the
Securityholders of such Securities to receive such payment from the funds or
Government Obligations held by the Trustee.
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ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and
Directors of Company Exempt from Individual Liability. No recourse under or upon
any obligation, covenant or agreement contained in this Indenture, in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders thereof
and as part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, firm or
corporation, other than the parties hereto, any Paying Agent and their
successors hereunder and the Holders of the Securities any legal or equitable
right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Company Bound by
Indenture. All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Company, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Company may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Company is filed by the Company
with the Trustee) to WellPoint Health Networks Inc., 21555 Oxnard Street,
Woodland Hills, CA 91367, Attention: Corporate Secretary. Any notice, direction,
request or demand by the Company or any Securityholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed by first-class mail, postage
prepaid to such Holders as their names and addresses appear in the Security
register within the time prescribed. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the
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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 Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders, and
any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Company
and Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
reasonably acceptable to the Trustee shall be deemed to be a sufficient giving
of such notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, 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, have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (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 such person, 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
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement 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 that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters or information with respect to which is in the
possession of the Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company, unless such counsel
knows
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that the certificate, statement or opinion or representations with respect to
the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.
Unless otherwise specified in a Security, if the date of maturity of interest on
or principal of the Securities of any Series or the date fixed for redemption or
repayment of any such Security shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required by the Trust Indenture Act of 1939, as amended, such required
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act of 1939, as amended, that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be.
SECTION 11.8 California Law to Govern. This Indenture and each
Security shall be deemed to be a contract under the internal laws of the State
of California (without regard to conflicts of laws provisions thereof), and for
all purposes shall be construed in accordance with the laws of such State.
SECTION 11.9 Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings; Gender. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof. The use of the masculine, feminine or
neuter gender herein shall not limit in any way the applicability of any term or
provision hereof.
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ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any Series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a Series except as otherwise specified as contemplated by Section 2.3 for
Securities of such Series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice
of redemption to the Holders of Securities of any Series required to be redeemed
or to be redeemed as a whole or in part at the option of the Company shall be
given by giving notice of such redemption as provided in Section 11.4, at least
15 days and not more than forty-five days prior to the date fixed for redemption
to such Holders of Securities of such Series. Failure to give notice by mail, or
any defect in the notice to the Holder of any Security of a Series designated
for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such Series.
The notice of redemption to each such Holder shall specify the
date fixed for redemption, the "CUSIP" number or numbers for such Securities,
the redemption price, the Place or Places of Payment, that payment will be made
upon presentation and surrender of such Securities, that such redemption is
pursuant to the mandatory or optional sinking fund, or both, if such be the
case, that interest accrued to the date fixed for redemption will be paid as
specified in such notice, that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue and, if applicable, that a
Holder of Securities who desires to convert Securities for redemption must
satisfy the requirements for conversion contained in such Securities, the then
existing conversion price or rate and the date and time when the option to
convert shall expire. If less than all of the Securities of any Series are to be
redeemed, the notice of redemption shall specify the numbers of the Securities
of such Series to be redeemed. In case any Security of a Series is to be
redeemed in part, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such Series in principal amount equal to the unredeemed Portion
thereof will be issued.
The notice of redemption of Securities of any Series to be
redeemed at the option 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.
If such notice is to be given by the Trustee, the Company shall provide notice
of such redemption to the Trustee at least forty-five days prior to the date
fixed for redemption (unless a shorter notice shall be satisfactory to the
Trustee). If such notice is given by the Company, the Company shall provide a
copy of such notice given to the Holders of such redemption to the Trustee at
least 3 Business Days prior to the date such notice is given to such
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Holders, but in any event at least 15 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee).
Unless otherwise specified pursuant to Section 2.3, not later
than the redemption date specified in the notice of redemption given as provided
in this Section, the Company will have on deposit with the Trustee or with one
or more Paying Agents (or, if the Company is acting as its own Paying Agent, set
aside, segregate and hold in trust as provided in Section 3.4) in funds
available on such date an amount of money sufficient to redeem on the redemption
date all the Securities of such Series so called for redemption at the
appropriate redemption price, together with accrued interest to the date fixed
for redemption. If less than all the Outstanding Securities of a Series are to
be redeemed, the Company will deliver to the Trustee at least forty-five days
prior to the date fixed for redemption an Officers' Certificate stating the
aggregate principal amount of Securities to be redeemed.
If less than all the Securities of a Series are to be
redeemed, the Trustee shall select, in such manner as it shall deem appropriate
and fair, Securities of such Series to be redeemed in whole or in part and the
Trustee shall promptly notify the Company in writing of the Securities of such
Series selected for redemption and, in the case of any Securities of such Series
selected for partial redemption, the principal amount thereof to be redeemed.
However, if less than all the Securities of any Series with differing issue
dates, interest rates and stated maturities are to be redeemed, the Company in
its sole discretion shall select the particular securities to be redeemed and
shall notify the Trustee in writing thereof at least forty-five days prior to
the relevant redemption date. Securities may be redeemed in part in multiples
equal to the minimum authorized denomination for Securities of such Series or
any multiple thereof. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities of
any Series shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which has
been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Company shall default in the payment of such
Securities at the redemption price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue, and, except as provided in Sections 6.1 and 10.4, such
Securities shall cease from and after the date fixed for redemption to be
entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a Place of
Payment specified in said notice, said Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with interest accrued thereon to the date fixed for
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redemption; provided that if for any Securities the date fixed for redemption is
a regular interest payment date, payment of interest becoming due on such date
shall be payable to the Holders of such Securities registered as such on the
relevant record date subject to the terms and provisions of Section 2.7 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest borne by the Security.
Upon presentation of any Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to or on the order of the Holder thereof, at the expense of the
Company, a new Security or Securities, of authorized denominations, in principal
amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility
for Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 30 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Company or (b) an entity specifically
identified in such written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any Series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of Securities
of any Series is herein referred to as an "optional sinking fund payment." The
date on which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any Series of Securities in cash, the Company may
at its option (a) deliver to the Trustee securities of such Series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Company or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such Series (not previously so credited)
redeemed by the Company through any optional redemption provision contained in
the terms of such Series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.
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On or before the forty-fifth day next preceding each sinking
fund payment date for any Series of Securities, the Company will deliver to the
Trustee a written statement (which need not contain the statements required by
Section 11.5) signed by an authorized officer of the Company (a) specifying the
portion of the mandatory sinking fund payment to be satisfied by payment of cash
(except as otherwise specified pursuant to Section 2.3 for the Securities of
such Series), and the portion to be satisfied by delivery or credit of
Securities of such Series, (b) stating that none of the Securities of such
Series for which credit is sought has theretofore been so credited, (c) stating
that no defaults in the payment of interest or Events of Default with respect to
such Series have occurred (which have not been waived or cured) and are
continuing, (d) stating whether or not the Company intends to exercise its right
to make an optional sinking fund payment with respect to such Series and, if so,
specifying the amount of such optional sinking fund payment which the Company
intends to pay on or before the next succeeding sinking fund payment date and
(e) specifying such sinking fund payment date. Any Securities of such Series to
be credited and required to be delivered on the Trustee in order for the Company
to be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to Section
2.10 to the Trustee with such written statement. Such written statement shall be
irrevocable and upon its receipt by the Trustee the Company shall become
unconditionally obligated to make all the cash payments or payments therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Company, on or before any such forty-fifth day, to deliver such
written statement and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Company (i) that the mandatory sinking fund payment
for such Series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of such
Series in respect thereof and (ii) that the Company will make no optional
sinking fund payment with respect to such Series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $100,000 (or a lesser sum if the Company shall so request) with
respect to the Securities of any particular Series, such cash shall be applied
on the next succeeding sinking fund payment date to the redemption of Securities
of such Series at the sinking fund redemption price together with accrued
interest to the date fixed for redemption. If such amount shall be $100,000 or
less and the Company makes no such request then it shall be carried over until a
sum in excess of $100,000 is available. The Trustee shall select, in the manner
provided in Section 12.2 and giving effect to any exclusions required pursuant
to Section 12.4, for redemption on such sinking fund payment date a sufficient
principal amount of Securities of such Series to absorb said cash, as nearly as
may be possible, and shall (if requested in writing by the Company) inform the
Company of the serial numbers of the Securities of such Series (or portions
thereof) so selected. The Trustee, in the name and at the expense of the Company
(or the Company, if it shall so notify the Trustee in writing), shall cause
notice of redemption of the Securities of such Series to be given in
substantially the manner provided in Section 12.2 (and with the effect
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provided in Section 12.3) for the redemption of Securities of such Series at the
option of the Company. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such Series shall be added to the
next cash sinking fund payment for such Series and, together with such payment,
shall be applied in accordance with the provisions of this Section. Any and all
sinking fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such Series shall
be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest on, the Securities of
such Series at maturity.
Unless otherwise specified pursuant to Section 2.3, not later
than the sinking fund payment date, the Company shall have paid to the Trustee
in cash or shall otherwise provide in funds available on such date for the
payment of all principal and interest accrued to the date fixed for redemption
on Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a Series with sinking fund moneys or mail or publish any notice of
redemption of Securities for such Series by operation of the sinking fund during
the continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the mailing or publication of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it shall have
received from the Company a sum sufficient for such redemption. Except as
aforesaid, any moneys in the sinking fund for such Series at the time when any
such default or Event of Default shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and held for the
payment of all such Securities. In case such Event of Default shall have been
waived as provided in Section 5.9 or the default cured on or before the sixtieth
day preceding the sinking fund payment date in any year, such moneys shall
thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
SECTION 12.6 Repayment at the Option of the Holders.
Securities of any Series which are repayable at the option of the Holders
thereof before their stated maturity shall be repaid in accordance with the
terms of the Securities of such Series.
The repayment of any principal amount of Securities pursuant
to such option of the Holder to require repayment of Securities before their
stated maturity, for purposes of Section 10.1, shall not operate as a payment,
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the Company, at its option, shall deliver or surrender the same
to the Trustee with a directive that such Securities be cancelled.
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SECTION 12.7 Conversion Arrangement on Call for Redemption. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to the Trustee or the Paying Agent in trust for the Holders
of Securities, on or before 10:00 a.m. California time on the redemption date,
an amount not less than the redemption price, together with interest, if any,
accrued to the redemption date of such Securities, in immediately available
funds. Notwithstanding anything to the contrary contained in this Article
Twelve, the obligation of the Company to pay the redemption price of such
Securities, including all accrued interest, if any, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any Securities not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and surrendered by such purchasers for conversion,
all as of immediately prior to the close of business on the last day on which
Securities of such series called for redemption may be converted in accordance
with this Indenture and the terms of such Securities, subject to payment to the
Trustee or Paying Agent of the above-described amount. The Trustee or the Paying
Agent shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it in the same manner as it would pay moneys
deposited with it by the Company for the redemption of Securities. Without the
Trustee's and the Paying Agent's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee and the Paying Agent as set forth
in this Indenture, and the Company agrees to indemnify the Trustee and the
Paying Agent from, and hold them harmless against, any loss, liability or
expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Trustee and the
Paying Agent (including the fees and expenses of their agents and counsel) in
the defense of any claim or liability arising out of or in connection with the
exercise or performance of any of their powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
SECTION 13.1 Applicability of Article. Securities of any
series which are convertible into Common Shares at the option of the Holder of
such Securities shall be convertible in accordance with their terms and (unless
otherwise specified as contemplated by Section 2.3 for the Securities of any
series) in accordance with this Article. Each reference in this Article Thirteen
to "a Security" or "the Securities" refers to the Securities of the particular
Series that is convertible into Common Shares. If more than one Series of
Securities with conversion privileges are Outstanding at any time, the
provisions of this Article Thirteen shall be applied separately to each such
series.
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SECTION 13.2 Right of Holders to Convert Securities into
Common Shares. Subject to and upon compliance with the terms of the Securities
and the provisions of Section 12.7 and this Article Thirteen, at the option of
the Holder thereof, any Security of any series of any authorized denomination
which is convertible into Common Shares, or any portion of the principal amount
thereof which is $1,000 or any integral multiple of $1,000, may, at any time
during the period specified in the Securities of such series, or in case such
Security or portion thereof shall have been called for redemption, then in
respect of such Security or portion thereof until and including, but not after
(unless the Company shall default in payment due upon the redemption thereof)
the close of business on the redemption date (except that in the case of
repayment at the option of the Holder, if specified in the terms of the relevant
Security, such right shall terminate upon the Company's receipt of written
notice of the exercise of such option), be converted into duly authorized,
validly issued, fully paid and nonassessable Common Shares, as specified in such
Security, at the conversion price or conversion rate for each $1,000 principal
amount of Securities (such initial conversion rate reflecting an initial
conversion price specified in such Security) in effect on the conversion date,
or, in case an adjustment in the conversion price has taken place pursuant to
the provisions of this Article Thirteen, then at the applicable conversion price
as so adjusted, upon surrender of the Security or Securities, the principal
amount of which is so to be converted, to the Company at any time during usual
business hours at the office or agency to be maintained by it in accordance with
the provisions of Section 3.2, accompanied by a written notice of election to
convert as provided in Section 13.3 and, if the Holder requests that the Common
Shares be registered in a name other than that of the Holder, by a written
instrument or instruments of transfer in form satisfactory to the Company and/or
the Trustee, as applicable, duly executed by the Holder thereof or his attorney
duly authorized in writing. All Securities surrendered for conversion shall, if
surrendered to the Company or any conversion agent, be delivered to the Trustee
for cancellation and cancelled by it, or shall, if surrendered to the Trustee,
be cancelled by it, as provided in Section 2.10.
The initial conversion price or conversion rate in respect of
a Series of Securities shall be as specified in the Securities of such Series.
The conversion price or conversion rate will be subject to adjustment on the
terms set forth in Section 13.5 or such other or different terms, if any, as may
be specified by Section 2.3 for Securities of such Series. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of any portion of it.
SECTION 13.3 Issuance of Common Shares on Conversions. As
promptly as practicable after the surrender, as herein provided, of any Security
or Securities for conversion into Common Shares, the Company shall deliver or
cause to be delivered at its said office or agency to or upon the written order
of the Holder of the Security or Securities so surrendered a certificate or
certificates representing the number of duly authorized, validly issued, fully
paid and nonassessable Common Shares into which such Security or Securities may
be converted in accordance with the terms thereof and the provisions of this
Article Thirteen. Prior to delivery of such certificate or certificates, the
Company shall require written notice at its said office or agency from the
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Holder of the Security or Securities so surrendered stating that the Holder
irrevocably elects to convert such Security or Securities, or, if less than the
entire principal amount thereof is to be converted, stating the portion thereof
to be converted. Such notice shall also state the name or names (with address
and social security or other taxpayer identification number) in which said
certificate or certificates are to be issued. Such conversion shall be deemed to
have been made at the time that such Security or Securities shall have been
surrendered for conversion and such notice shall have been received by the
Company or the Trustee, the rights of the Holder of such Security or Securities
as a Holder shall cease at such time, the Person or Persons entitled to receive
the Common Shares upon conversion of such Security or Securities shall be
treated for all purposes as having become either record holder or holders of
such Common Shares at such time and such conversion shall be at the conversion
price in effect at such time. In the case of any Security of any Series which is
converted in part only, upon such conversion, the Company shall execute and,
upon the Company's request and at the Company's expense, the Trustee or an
authenticating agent shall authenticate and deliver to the Holder thereof, as
requested by such Holder, a new Security or Securities of such Series of
authorized denominations in aggregate principal amount equal to the unconverted
portion of such Security.
If the last day on which such Security may be converted is not
a Business Day in a place where the conversion agent for that Security is
located, such Security may be surrendered to that conversion agent on the next
succeeding day that is a Business Day.
The Company shall not be required to deliver certificates for
Common Shares upon conversion while its stock transfer books are closed for a
meeting of shareholders or for the payment of dividends or for any other
purpose, but certificates for Common Shares shall be delivered as soon as the
stock transfer books shall again be opened.
SECTION 13.4 No Payment or Adjustment for Interest or
Dividends. Unless otherwise specified as contemplated by Section 2.3 for
Securities of such Series, Securities surrendered for conversion into Common
Shares during the period from the close of business on any regular record date
(or special record date) next preceding any interest payment date to the opening
of business on such interest payment date (except Securities called for
redemption on a redemption date within such period) when surrendered for
conversion must be accompanied by payment (by certified or official bank check
to the order of the Company payable in clearing house funds at the location
where the Securities are surrendered) of an amount equal to the interest thereon
which the Holder is entitled to receive on such interest payment date. Payment
of interest shall be made, on such interest payment date or such other payment
date (as set forth in Section 2.7), as the case may be, to the Holder of the
Securities as of such regular record date or special record date, as applicable.
Except where Securities surrendered for conversion must be accompanied by
payment as described above, no interest on converted Securities will be payable
by the Company on any interest payment date subsequent to the date of
conversion. No other payment or adjustment for interest or
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dividends is to be made upon conversion. Notwithstanding the foregoing, upon
conversion of any Original Issue Discount Security, the fixed number of Common
Shares into which such Security is convertible delivered by the Company to the
Holder thereof shall be applied, first, to the portion attributable to the
accrued original issue discount relating to the period from the date of issuance
to the date of conversion of such Security, and, second, to the portion
attributable to the balance of the principal amount of such Security.
SECTION 13.5 Adjustment of Conversion Price. Unless otherwise
specified as contemplated by Section 2.3 for Securities of such Series, the
conversion price for Securities convertible into Common Shares shall be adjusted
from time to time as follows:
(a) In case the Company shall (x) pay a dividend or
make a distribution on Common Shares in Common Shares, (y) subdivide
the outstanding Common Shares into a greater number of shares or (z)
combine the outstanding Common Shares into a smaller number of shares,
the conversion price for the Securities of such Series shall be
adjusted so that the Holder of any such Security thereafter surrendered
for conversion shall be entitled to receive the number of Common Shares
which he would have owned or have been entitled to receive after the
happening of any of the events described above had such Security been
converted immediately prior to the record date in the case of a
dividend or the effective date in the case of subdivision or
combination. An adjustment made pursuant to this subsection (a) shall
become effective immediately after the record date in the case of a
dividend, except as provided in subsection (h) below, and shall become
effective immediately after the effective date in the case of a
subdivision or combination.
(b) In case the Company shall issue rights or
warrants to all holders of Common Shares entitling them (for a period
expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Shares at a price per share less than
the current market price per share of Common Shares (as defined for
purposes of this subsection (b) in subsection (e) below), at the record
date for the determination of stockholders entitled to receive such
rights or warrants, the conversion price in effect immediately prior
thereto shall be adjusted so that the same shall equal the price
determined by multiplying the conversion price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of Common Shares outstanding on such record date plus the
number of Common Shares which the aggregate offering price of the total
number of Common Shares so offered would purchase at such current
market price, and the denominator of which shall be the number of
Common Shares outstanding on such record date plus the number of
additional Common Shares receivable upon exercise of such rights or
warrants. Such adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately,
except as provided in subsection (h) below, after such record date. In
determining whether any rights or
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warrants entitle the Holders of the Securities of such Series to
subscribe for or purchase Common Shares at less than such current
market price, and in determining the aggregate offering price of such
Common Shares, there shall be taken into account any consideration
received by the Company for such rights or warrants plus the exercise
price thereof, the value of such consideration or exercise price, as
the case may be, if other than cash, to be determined by the Board of
Directors.
(c) In case the Company shall distribute to all
holders of Common Shares any shares of capital stock of the Company
(other than Common Shares) or evidences of its indebtedness or assets
(excluding cash dividends or distributions paid from retained earnings
of the Company) or rights or warrants to subscribe for or purchase any
of its securities (excluding those rights or warrants referred to in
subsection (b) above) (any of the foregoing being herein in this
subsection (c) called the "Special Securities"), then, in each such
case, unless the Company elects to reserve such Special Securities for
distribution to the Holders of Securities of such Series upon the
conversion so that any such Holder converting such Securities will
receive upon such conversion, in addition to the Common Shares to which
such Holder is entitled, the amount and kind of Special Securities
which such Holder would have received if such Holder had, immediately
prior to the record date for the distribution of the Special
Securities, converted Securities into Common Shares, the conversion
price shall be adjusted so that the same shall equal the price
determined by multiplying the conversion price in effect immediately
prior to such record date by a fraction the numerator of which shall be
the current market price per share (as defined for purposes of this
subsection (c) in subsection (e) below) of Common Shares on the record
date mentioned above less the then fair market value (as determined by
the Board of Directors, whose determination shall, if made in good
faith, be conclusive) of the portion of the Special Securities so
distributed applicable to one Common Share, and the denominator of
which shall be the current market price per Common Shares (as defined
in subsection (e) below); provided, however, that in the event the then
fair market value (as so determined) of the portion of the Special
Securities so distributed applicable to one Common Share is equal to or
greater than the current market price per Common Share (as defined in
subsection (e) below) on the record date mentioned above, in lieu of
the foregoing adjustment, adequate provision shall be made so that each
Holder of Securities of such Series shall have the right to receive the
amount and kind of Special Securities such holder would have received
had he converted such Securities immediately prior to the record date
for the distribution of the Special Securities. Such adjustment shall
become effective immediately, except as provided in subsection (h)
below, after the record date for the determination of stockholders
entitled to receive such distribution.
(d) If, pursuant to subsection (b) or (c) above, the
conversion price shall have been adjusted because the Company has
declared a dividend, or made a distribution, on the outstanding Common
Shares in the form of any right
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or warrant to purchase securities of the Company, or the Company has
issued any such right or warrant, then, upon the expiration of any such
unexercised right or unexercised warrant, the conversion price shall
forthwith be adjusted to equal the conversion price that would have
applied had such right or warrant never been declared, distributed or
issued.
(e) For the purpose of any computation under
subsection (b) above, the current market price per Common Share on any
date shall be deemed to be the average of the reported last sales
prices for the thirty consecutive Trading Days (as defined below)
commencing forty-five Trading Days before the date in question. For the
purpose of any computation under subsection (c) above, the current
market price per Common Share on any date shall be deemed to be the
average of the reported last sales prices for the ten consecutive
Trading Days before the date in question. The reported last sales price
for each day (whether for purposes of subsection (b) or subsection (c))
shall be the reported last sales price, regular way, or, in case no
sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in either case as reported on the New
York Stock Exchange Composite Tape or, if the Common Shares are not
listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which the Common Shares are
listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the National Market of the
National Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or, if the Common Shares are not quoted on such
National Market, the average of the closing bid and asked prices on
such day in the over- the-counter market as reported by NASDAQ or, if
bid and asked prices for the Common Shares on each such day shall not
have been reported through NASDAQ, the average of the bid and asked
prices for such day as furnished by any New York Stock Exchange member
firm regularly making a market in the Common Shares selected for such
purpose by the Board of Directors or a committee thereof or, if no such
quotations are available, the fair market value of the Common Shares as
determined by a New York Stock Exchange member firm regularly making a
market in the Common Shares selected for such purpose by the Board of
Directors or a committee thereof or, if no such quotations are
available, the fair market value of the Common Shares as determined by
a New York Stock Exchange member firm regularly making a market in the
Common Shares selected for such purpose by the Board of Directors or a
committee thereof. As used herein, the term "Trading Day" with respect
to the Common Shares means (x) if the Common Shares are listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or such
other national securities exchange is open for business or (y) if the
Common Shares are quoted on the National Market of the NASDAQ, a day on
which trades may be made on such National Market or (z) otherwise, any
day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
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(f) No adjustment in the conversion price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments
which by reason of this subsection (f) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment; and, provided, further, that adjustment shall be required
and made in accordance with the provisions of this Article Thirteen
(other than this subsection (f)) not later than such time as may be
required in order to preserve the tax free nature of a distribution to
the holders of Common Shares. All calculations under this Article
Thirteen shall be made to the nearest cent or to the nearest 1/100 of a
share, as the case may be, with one-half cent and 1/200 of a share,
respectively, being rounded upward. Anything in this Section 13.5 to
the contrary notwithstanding, the Company shall be entitled to make
such reductions in the conversion price, in addition to those required
by this Section 13.5, as it in its discretion shall determine to be
advisable in order that any stock dividend, subdivision of shares,
distribution of rights or warrants to purchase stock or securities, or
distribution of other assets (other than cash dividends) hereafter made
by the Company to its shareholders shall not be taxable.
(g) Whenever the conversion price is adjusted, as
herein provided, the Company shall promptly file with the Trustee, at
the Corporate Trust Office of the Trustee, and with the office or
agency maintained by the Company for the conversion of Securities of
such Series pursuant to Section 3.2, an Officers' Certificate, setting
forth the conversion price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the correctness of such
adjustment. Neither the Trustee nor any conversion agent shall be under
any duty or responsibility with respect to any such certificate or any
facts or computations set forth therein, except to exhibit said
certificate from time to time to any Holder of a Security of such
Series desiring to inspect the same. The Company shall promptly cause a
notice setting forth the adjusted conversion price to be mailed to the
Holders of Securities of such Series, as their names and addresses
appear upon the Security register of the Company.
(h) In any case in which this Section 13.5 provides
that an adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence of such
event (y) issuing to the Holder of any Security of such Series
converted after such record date and before the occurrence of such
event the additional Common Shares issuable upon such conversion by
reason of the adjustment required by such event over and above the
Common Shares issuable upon such conversion before giving effect to
such adjustment and (z) paying to such holder any amount in cash in
lieu of any fractional Common Shares pursuant to Section 13.6 hereof.
SECTION 13.6 No Fractional Shares to Be Issued. No fractional
Common Shares shall be issued upon any conversion of Securities. If more than
one
57.
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Security of any Series shall be surrendered for conversion at one time by the
same Holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Securities of such Series (or specified portions thereof to the extent permitted
hereby) so surrendered. Instead of a fraction of a share of Common Stock which
would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment (computed
to the nearest cent, with one-half cent being rounded upward) in respect of such
fraction of a share in an amount equal to the same fractional interest of the
reported last sales price (as defined in Section 13.5(e)) of the Common Shares
on the Trading Day (as defined in Section 13.5(e)) next preceding the day of
conversion.
SECTION 13.7 Preservation of Conversion Rights upon
Consolidation, Merger, Sale or Conveyance. In case of any consolidation of the
Company with, or merger of the Company into, any other corporation (other than a
consolidation or merger in which the Company is the continuing corporation), or
in the case of any sale or transfer of all or substantially all of the assets of
the Company, the corporation formed by such consolidation or the corporation
into which the Company shall have been merged or the corporation which shall
have acquired such assets, as the case may be, shall execute and deliver to the
Trustee, a supplemental indenture, in accordance with the provisions of Articles
Eight and Nine as they relate to supplemental indentures, providing that the
Holder of each Security then Outstanding of a Series which was convertible into
Common Shares shall have the right thereafter to convert such Security into the
kind and amount of shares of stock and other securities and property, including
cash, receivable upon such consolidation, merger, sale or transfer by a holder
of the number of Common Shares of the Company into which such Securities might
have been converted immediately prior to such consolidation, merger, sale or
transfer. Such supplemental indenture shall conform to the provisions of the
Trust Indenture Act of 1939 as then in effect and shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article Thirteen. Neither the Trustee nor any conversion
agent shall have any liability or responsibility for determining the correctness
of any provision contained in any such supplemental indenture relating either to
the kind or amount of shares of stock or other securities or property receivable
by Holders of the Securities upon the conversion of their Securities after any
such consolidation, merger, sale or transfer, or to any adjustment to be made
with respect thereto and, subject to the provisions of Section 313 of the Trust
Indenture Act of 1939, may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected in relying upon, an Officers'
Certificate with respect thereto and an Opinion of Counsel with respect to legal
matters related thereto. If in the case of any such consolidation, merger, sale
or transfer, the stock or other securities and property receivable by a Holder
of the Securities includes stock or other securities and property of a
corporation other than the successor or purchasing corporation, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Securities as the Board of Directors shall reasonably consider necessary.
The above provisions of
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<PAGE> 67
this Section 13.7 shall similarly apply to successive consolidations, mergers,
sales or transfers.
SECTION 13.8 Notice to Holders of the Securities of a Series
Prior to Taking Certain Types of Action. With respect to the Securities of any
Series, in case:
(a) the Company shall authorize the issuance to all holders of
Common Shares of rights or warrants to subscribe for or purchase shares of its
capital stock or of any other right;
(b) the Company shall authorize the distribution to all
holders of Common Shares of evidences of indebtedness or assets (except for cash
dividends or distributions paid from retained earnings of the Company);
(c) of any subdivision or combination of Common Shares or of
any consolidation or merger to which the Company is a party and for which
approval by the shareholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Trustee and at the office or
agency maintained for the purpose of conversion of Securities of such Series
pursuant to Section 3.2, and shall cause to be mailed to the Holders of
Securities of such Series, at their last addresses as they shall appear on the
Security register of the Company, at least ten days prior to the applicable
record date hereinafter specified, a notice stating (i) the date as of which the
holders of Common Shares to be entitled to receive any such rights, warrants or
distribution are to be determined, or (ii) the date on which any such
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action is expected to become effective, and the
date as of which it is expected that holders of record of Common Shares shall be
entitled to exchange their Common Shares for securities or other property, if
any, deliverable upon such subdivision, combination, consolidation, merger,
sale, transfer, dissolution, liquidation, winding up or other action. The
failure to give the notice required by this Section 13.8 or any defect therein
shall not affect the legality or validity of any distribution, right, warrant,
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action, or the vote upon any of the foregoing.
SECTION 13.9 Covenant to Reserve Shares for Issuance on
Conversion of Securities. The Company covenants that at all times it will
reserve and keep available out of each class of its authorized Common Shares,
free from preemptive rights, solely for the purpose of issue upon conversion of
Securities of any Series as herein provided, such number of Common Shares as
shall then be issuable upon the conversion of all Outstanding Securities of such
Series. The Company covenants that all Common Shares which shall be so issuable
shall, when issued or delivered, be duly and validly issued
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Common Shares into which Securities of such Series are convertible, and shall be
fully paid and nonassessable, free of all liens and charges and not subject to
preemptive rights and that, upon conversion, the appropriate capital stock
accounts of the Company will be duly credited.
SECTION 13.10 Compliance with Governmental Requirements. The
Company covenants that if any Common Shares required to be reserved for purposes
of conversion of Securities hereunder require registration or listing with or
approval of any governmental authority under any Federal or State law, pursuant
to the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or any national or regional securities exchange on which the
Common Shares are listed at the time of delivery of any Common Shares, before
such shares may be issued upon conversion, the Company will use its best efforts
to cause such shares to be duly registered, listed or approved, as the case may
be.
SECTION 13.11 Payment of Taxes upon Certificates for Shares
Issued upon Conversion. The issuance of certificates for Common Shares upon the
conversion of Securities shall be made without charge to the converting Holders
for any tax (including, without limitation, all documentary and stamp taxes) in
respect of the issuance and delivery of such certificates, and such certificates
shall be issued in the respective names of, or in such names as may be directed
by, the holders of the Securities converted; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the Holder of the Security converted, and the Company shall
not be required to issue or deliver such certificate unless or until the Person
or Persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
SECTION 13.12 Trustee's Duties with Respect to Conversion
Provisions. The Trustee and any conversion agent shall have no duty,
responsibility or liability to any Holder to determine whether any facts exist
which may require any adjustment of the conversion rate, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor any conversion agent shall be
accountable with respect to the registration under securities laws, listing,
validity or value (or the kind or amount) of any Common Shares, or of any other
securities or property, which may at any time be issued or delivered upon the
conversion of any Security, and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee and any conversion agent, subject
to the provisions of Section 313 of the TIA, shall not be responsible for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article Thirteen.
60.
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SECTION 13.13 Conversion of Securities into Preferred Stock.
Notwithstanding anything to the contrary in this Article Thirteen, the Company
may issue Securities that are convertible into Preferred Shares, including
Preferred Shares convertible into Common Shares, in which case all terms and
conditions relating to the conversion of Securities into Preferred Shares,
including any terms similar to those provided in Sections 13.1 through 13.12,
shall be as provided in or pursuant to an appropriate resolution of the Board of
Directors or in any indenture supplemental hereto or as otherwise contemplated
by Section 2.3.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
SECTION 14.1 Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of Securities, by his
acceptance thereof, likewise covenants and agrees, that the indebtedness
represented by the Securities and the payment of any and all amounts payable in
respect of each and all of the Securities is hereby expressly subordinated, to
the extent and in the manner hereinafter set forth, in right of payment to the
prior payment in full of Senior Indebtedness, whether outstanding on the date of
this Indenture or thereafter incurred, assumed or guaranteed.
In the event (a) of any distribution of assets of the Company
upon any dissolution, winding up, liquidation or reorganization of the Company
whether in a bankruptcy, insolvency, reorganization or receivership proceeding
or upon an assignment for the benefit of creditors or any other marshalling of
the assets and liabilities of the Company or otherwise, except a distribution in
connection with a merger or consolidation or a conveyance or transfer of all or
substantially all of the properties of the Company which complies with the
requirements of Article Nine, or (b) that a default shall have occurred and be
continuing with respect to the payment of any amount payable in respect of any
Senior Indebtedness, or (c) that the principal of the Securities of any Series
shall have been declared due and payable pursuant to Section 5.1 and such
declaration shall not have been rescinded and annulled as provided in Section
5.1, then:
(1) in a circumstance described in the foregoing clause (a) or
(b) the holders of all Senior Indebtedness, and in the circumstance described in
the foregoing clause (c) the holders of all Senior Indebtedness outstanding at
the time the principal of such Securities (or in the case of Original Issue
Discount Securities, such portion of the principal amount) shall have been so
declared due and payable, shall first be entitled to receive payment of the full
amount due thereon, or provision shall be made for such payment in money or
money's worth, before the Holders of any of the Securities are entitled to
receive any payment in respect of the indebtedness evidenced by the Securities;
(2) any payment by, or distribution of assets of, the Company
of any kind or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities of the
Company or any other
61.
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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 Senior Indebtedness, provided
that the rights of the holders of the Senior Indebtedness are not altered by
such reorganization or readjustment), to which the Holders of any of the
Securities would be entitled except for the provisions of this Article shall be
paid or delivered by the person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly
to the holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instrument evidencing any of such Senior Indebtedness may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of such
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, before any payment or distribution is made to the
Holders of the indebtedness evidenced by the Securities under this Indenture;
and
(3) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or character,
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 Senior Indebtedness, provided that the rights
of the holders of Senior Indebtedness are not altered by such reorganization or
readjustment), shall be received by the Holders of any of the Securities before
all Senior Indebtedness is paid in full, such payment or distribution shall be
paid over to the holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
ratably as aforesaid, for application to the payment of all Senior Indebtedness
remaining unpaid until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or distribution (or
provision therefor) to the holders of such Senior Indebtedness.
SECTION 14.2 Subrogation. Subject to the payment in full of
all Senior Indebtedness to which the indebtedness evidenced by the Securities is
in the circumstances subordinated as provided in Section 14.1, the Holders of
the Securities shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to such Senior Indebtedness until all
amounts owing on the Securities shall be paid in full, and, as between the
Company, its creditors other than holders of such Senior Indebtedness, and the
Holders of the Securities, no such payment or distribution made to the holders
of such Senior Indebtedness by virtue of this Article which otherwise would have
been made to the Holders of the Securities shall be deemed to be a payment by
the Company on account of such Senior Indebtedness, it being understood that the
provisions of this Article are and are intended solely for the purpose of
defining the
62.
<PAGE> 71
relative rights of the Holders of the Securities, on the one hand, and the
holders of Senior Indebtedness.
SECTION 14.3 Obligation of the Company Unconditional. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest on and any additional
amounts owing in respect of the Securities as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders of the Securities and creditors of the
Company other than the holders of Senior Indebtedness nor shall anything herein
or therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee 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 any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or agent or other person making any
payment or distribution, delivered to the Trustee or to the Holders of the
Securities, for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount paid or distributed thereon and all other facts pertinent thereto or to
this Article.
SECTION 14.4 Payments on Securities Permitted. Nothing
contained in this Article or elsewhere in this Indenture, or in any of the
Securities, shall affect the obligation of the Company to make, or prevent the
Company from making, payment of the principal of or interest on or any
additional amounts owing in respect of the Securities in accordance with the
provisions hereof and thereof, except as otherwise provided in this Article.
SECTION 14.5 Effectuation of Subordination by Trustee. Each
Holder of Securities, by his acceptance thereof, authorizes and directs the
Trustee in 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 14.6 Knowledge of Trustee. Notwithstanding the
provisions of this Article or any other provisions of this Indenture, the
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be charged with knowledge of the existence of any
facts which would prohibit the making of any
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<PAGE> 72
payment of moneys to or by the Trustee, or the taking of any other action by the
Trustee, unless and until the Trustee shall have received written notice thereof
from the Company, any Holder of Securities, any paying or conversion agent of
the Company or the holder or representative of any class of Senior Indebtedness;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least three Business Days prior to the date upon
which, by the terms hereof, any money may become payable for any purpose
(including, without limitation, the payment of the principal of or interest on,
or additional amounts owing in respect of, any Security) then, anything herein
contained to the contrary notwithstanding, the Trustee shall have all power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it during or after such three Business Day period.
SECTION 14.7 Trustee May Hold Senior Indebtedness. The Trustee
in its individual capacity shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness at the time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
313 of the TIA or elsewhere in this Indenture shall deprive the Trustee of any
of its rights as such holder.
Nothing in this Article shall subordinate any claims of, or
payments to, the Trustee (under or pursuant to Section 6.7) to Senior
Indebtedness.
SECTION 14.8 Rights of Holders of Senior Indebtedness Not
Impaired. No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
non- compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
64.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
WELLPOINT HEALTH NETWORKS INC.
By:___________________________
Name:
Title:
ATTEST:
By:_________________________
Name:
Title:
[ ,]
as Trustee
By:___________________________
Name:
Title:
ATTEST:
By:_________________________
Name:
Title:
65.
<PAGE> 1
Exhibit 4.5
WELLPOINT HEALTH NETWORKS INC.
STANDARD DEBT SECURITIES WARRANT
AGREEMENT PROVISIONS
________________, 1996
<PAGE> 2
From time to time, WellPoint Health Networks Inc., a
California corporation (the "Company"), may enter into one or more warrant
agreements that provide for the issuance and sale of warrants ("Warrants") to
purchase debt securities of the Company ("Debt Securities"). The standard
provisions set forth herein may be included or incorporated by reference in any
such warrant agreement (a "Warrant Agreement"). The Warrant Agreement, including
the provisions incorporated therein by reference, is herein referred to as this
"Agreement." The person named as the "Warrant Agent" in the first paragraph of
the Warrant Agreement is herein referred to as the "Warrant Agent." Unless
otherwise defined in this Agreement or in the Warrant Agreement, as the case may
be, terms defined in the Warrant Agreement are used herein as therein defined
and terms defined herein are used in the Warrant Agreement as herein defined.
SECTION 1. Issuance of Warrant Certificates. Each Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced thereby
shall represent the right, subject to the provisions contained herein and
therein, to purchase a Debt Security in the principal amount set forth in the
Warrant Agreement.
SECTION 2. Execution and Delivery of Warrant Certificates.
Each Warrant Certificate, whenever issued, shall be in registered form
substantially in such form or forms as shall be established by the Company from
time to time pursuant to one or more resolutions of the Board of Directors of
the Company or in one or more warrant agreements supplemental hereto, and in
each case shall be dated as of the date of issuance thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as the
officers of the Company executing the Warrant Certificate may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with (i)
any law or with any rule or regulation made pursuant thereto or (ii) any rule or
regulation of any stock exchange on which the Warrant Certificates may be
listed, or to conform to usage. The Warrant Certificates shall be signed on
behalf of the Company by its Chairman of the Board of Directors, a Vice Chairman
of the Board of Directors, its President, a Vice President or its Treasurer and
attested by its Secretary or Assistant Secretary, under its corporate seal. Such
signatures may be manual or facsimile signatures of such authorized officers and
may be imprinted or otherwise reproduced on the Warrant Certificates. The seal
of the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no
Warrant evidenced thereby shall be exercisable, until such Warrant Certificate
has been countersigned by the manual signature of the Warrant Agent. Such
signature by the Warrant Agent upon any Warrant Certificate executed by the
Company shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly delivered hereunder.
2.
<PAGE> 3
If any officer of the Company who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to be
such officer before the Warrant Certificates so signed shall have been
countersigned and delivered to the Warrant Agent, such Warrant Certificates
nevertheless may be countersigned and delivered as though the person who signed
such Warrant Certificates had not ceased to be such officer of the Company. Any
Warrant Certificate may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution of this
Agreement any such person was not an officer.
SECTION 3. Countersignature of Warrant Certificates. The
Warrant Agent shall, upon receipt of Warrant Certificates, duly executed on
behalf of the Company, countersign the Warrant Certificates evidencing Warrants
to purchase the principal amount of the Debt Securities set forth in the Warrant
Agreement and shall deliver such Warrant Certificates to the appropriate person
or entity upon the order of the Company. After the original issuance of the
Warrant Certificates, the Warrant Agent shall countersign a Warrant Certificate
only if the Warrant Certificate is issued in exchange or substitution for, or in
connection with the registration of transfer of, one or more previously
countersigned Warrant Certificates, as hereinafter provided.
SECTION 4. Warrant Price. The exercise price of each Warrant
and any other form of consideration other than lawful money of the United States
of America by which the exercise price may be paid shall be as set forth in the
Warrant Agreement. The purchase price (including moneys and such other
consideration) of the Debt Securities upon exercise of the Warrants is referred
to in this Agreement as the "Warrant Price" and is payable in full at the time
of exercise.
SECTION 5. Duration of Warrant Certificates. Warrant
Certificates may be exercised in whole at any time, and in part from time to
time, during the period set forth in the Warrant Agreement (the "Expiration
Date"). Each Warrant Certificate not exercised on or before the Expiration Date
shall become void, and all rights of the holder thereunder and under this
Agreement shall cease.
SECTION 6. Exercise of Warrant Certificates.
(a) Prior to the Expiration Date, a Warrant
Certificate, if countersigned by the Warrant Agent, may be exercised in whole or
in part by providing certain information set forth on the reverse side of the
Warrant Certificate and, unless otherwise provided pursuant to Section 4, by
paying in full (in cash or by certified or official bank check in New York
Clearing House funds or by bank wire transfer in immediately available funds),
in United States dollars, the Warrant Price for the Debt Securities as to which
the Warrant Certificate is exercised, to the Warrant Agent at its corporate
trust office at the address set forth in the Warrant Agreement. The payment must
specify the name of the holder and the number of Warrants exercised by such
3.
<PAGE> 4
holder. Warrants will be deemed to have been exercised upon receipt of the
Warrant Price, subject to receipt within five business days thereafter of the
Warrant Certificate properly completed and duly executed at the corporate trust
office of the Warrant Agent. If the Warrant Agent receives moneys in payment of
the purchase price for Warrants, the Warrant Agent shall deposit all funds
received by it in the account of the Company maintained with it for such
purpose. If the Warrant Agent receives consideration other than moneys for
Warrants, the Warrant Agent shall deliver such consideration directly to the
Company. In either case, the Warrant Agent shall advise the Company by telex or
telecopy at the end of each day as to the Warrant Certificates that have been
exercised and the amount of moneys deposited to its account or the type and
amount of other consideration to be delivered to it.
(b) The Warrant Agent shall, from time to time, as
promptly as practicable, advise the Company and the Trustee of (i) the number of
Warrants exercised, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of the Debt
Securities to which such holder is entitled upon such exercise, (iii) delivery
of Warrant Certificates evidencing the balance, if any, of the Warrants
remaining after such exercise and (iv) such other information as the Company or
the Trustee shall reasonably require.
(c) A Warrant Certificate may be exercised in part to
purchase Debt Securities only in the denominations authorized pursuant to the
indenture under which the Debt Securities are issued (the "Indenture").
(d) As soon as practicable after receipt of payment
of the Warrant Price and the Warrant Certificate properly completed and duly
executed at the corporate trust office of the Warrant Agent, the Company shall
issue, pursuant to the indenture, to or upon the order of the holder of such
Warrant Certificate, the Debt Securities in authorized denominations to which
such holder is entitled, in fully registered form in such name or names as may
be directed by such holder, and if such Warrant Certificate was not exercised in
full, upon request of the holder a new Warrant Certificate evidencing the number
of Warrants remaining unexercised shall be issued if sufficient time remains
prior to the Expiration Date.
(e) The Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrants and of Debt Securities upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue of any Warrant Certificates or any certificates for Debt Securities
in a name other than the registered holder of a Warrant Certificate surrendered
upon the exercise of a Warrant, and the Company shall not be required to issue
or deliver such certificates unless or until the person or persons requesting
the issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has been
paid.
4.
<PAGE> 5
SECTION 7. No Rights as Securityholders Conferred by Warrant
Certificates. No Warrant Certificate shall entitle the holder thereof to any of
the rights of a holder of Debt Securities, including the right to receive the
payment of principal of, or interest on, the Debt Securities or to enforce any
of the covenants of the Debt Securities or the Indenture except as otherwise
provided in the Indenture.
SECTION 8. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the ownership and the loss, theft,
destruction or mutilation of the Warrant Certificate, and of indemnity
reasonably satisfactory to them, and, in the case of mutilation, upon surrender
thereof to the Warrant Agent for cancellation, then, in the absence of notice to
the Company or the Warrant Agent that such Warrant Certificate has been acquired
by a bona fide purchaser, the Company shall execute, and an authorized officer
of the Warrant Agent shall manually countersign and deliver, in exchange for or
in lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate of the same tenor and for a like number of Warrants. Upon
the issuance of any new Warrant Certificate 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 expense (including
the fees and expenses of the Warrant Agent) in connection therewith. Every
substitute Warrant Certificate executed and delivered pursuant to this Section
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section are exclusive and shall
preclude (to the extent lawful) any and all other rights or remedies with
respect to the replacement of mutilated, lost, stolen or destroyed Warrant
Certificates.
SECTION 9. Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any holder of any
Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the
holder of any Debt Security or the holder of any other Warrant Certificate, may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any audit, action or proceeding against the Company to enforce or
otherwise in respect of, his right to exercise his Warrant Certificate in the
manner provided in his Warrant Certificate and in his Agreement.
SECTION 10. Call of Warrants by the Company. If so provided in
the Warrant Agreement, the Company shall have the right to call and repurchase
any or all Warrants at the price (the "Call Price") and on or after the date
(the "Call Date") and upon the terms (the "Call Terms") as shall be established
from time to time in or pursuant to resolutions of the Board of Directors of the
Company or in the Warrant Agreement before the issuance of such Warrants. Notice
of such Call Price, Call Date
5.
<PAGE> 6
and Call Terms shall be given to registered holders of Warrants in writing by
the Company or the Warrant Agent.
SECTION 11. Optional Reduction of Warrant Price. Subject to
the limits, if any, established from time to time by the Board of Directors of
the Company or in the Warrant Agreement, the Company shall have the right, at
any time or from time to time, voluntarily to reduce the then current Warrant
Price to such amount (the "Reduced Warrant Price") and for such period or
periods of time, which may be through the close of business on the Expiration
Date (the "Reduced Warrant Price Period"), as may be deemed appropriate by the
Board of directors of the Company. Notice of any such Reduced Warrant Price and
Reduced Warrant Price Period shall be given to registered holders of Warrants in
writing by the Company or the Warrant Agent. After the termination of the
Reduced Warrant Price Period, the Warrant Price shall be such Warrant Price that
would have been in effect had there been no reduction in the Warrant Price
pursuant to the provisions of this Section 11.
SECTION 12. Exchange and Transfer. Upon surrender at the
corporate trust office of the Warrant Agent, Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants and the transfer of Warrants may be registered in whole
or in part; provided that such other Warrant Certificates shall evidence the
same aggregate number of Warrants as the Warrant Certificates surrendered for
exchange or registration of transfer. The Warrant Agent shall keep, at its
corporate trust office, books in which it shall register Warrant Certificates
and exchanges and transfers of outstanding Warrant Certificates, upon surrender
of the Warrant Certificates to the Warrant Agent at its corporate trust office
for exchange or registration of transfer, properly endorsed or accompanied by
appropriate instruments of registration of transfer and written instructions for
transfer, all in form satisfactory to the Company and the Warrant Agent. No
service charge shall be made for any exchange or registration of transfer of
Warrant Certificates, but the Company may require payment of a sum sufficient to
cover any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration of transfer. Whenever any
Warrant Certificates are surrendered for exchange or registration of transfer,
an authorized officer of the Warrant Agent shall mutually countersign and
deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificate duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange or
registration of transfer that will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange or
registration of transfer of Warrant Certificates shall be the valid obligations
of the Company, evidencing the same obligations and entitled to the same
benefits under this Agreement as the Warrant Certificates surrendered for such
exchange or registration of transfer.
6.
<PAGE> 7
SECTION 13. Treatment of Holders of Warrant Certificates.
Every holder of a Warrant Certificate, by accepting the same, consents and
agrees with the Company, the Warrant Agent and with every subsequent holder of
such Warrant Certificate that, until the transfer of the Warrant Certificate is
registered on the books of the Warrant Agent, the Company and the Warrant Agent
may treat the registered holder as the absolute owner thereof for any purpose
and as the person entitled to exercise the rights represented by the Warrants
evidenced thereby, any notice to the contrary notwithstanding.
SECTION 14. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exercise, registration of transfer or exchange
shall, if surrendered to the Company, be delivered to the Warrant Agent, and all
Warrant Certificates surrendered or so delivered to the Warrant Agent shall be
promptly canceled by the Warrant Agent and shall not be reissued and, except as
expressly permitted by this Agreement, no Warrant Certificate shall be issued
hereunder in lieu thereof. The Warrant Agent shall deliver to the Company from
time to time, or otherwise dispose of, canceled Warrant Certificates in a manner
satisfactory to the Company.
SECTION 15. Warrant Agent. The Company hereby appoints the
Warrant Agent as the Warrant Agent of the Company in respect of the Warrant
Certificates upon the terms and subject to the conditions herein set forth, and
the Warrant Agent hereby accepts such appointment. The Warrant Agent shall have
the powers and authority granted to and conferred upon it in the Warrant
Certificates and by this Agreement, and such further powers and authority to act
on behalf of the Company as the Company may hereafter grant to or confer upon
it. All of the terms and provisions with respect to such powers and authority
contained in the Warrant Certificates are subject to and governed by the terms
and provisions hereof.
SECTION 16. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following (to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of the
Warrant Certificates shall be subject):
(a) Performance by the Company. The Company agrees
that it will take any corporate action that may be reasonably necessary in order
to fulfill its obligations under this Agreement and the Warrant Certificates,
and that it will not take any action that would impair its ability to perform
its obligations under this Agreement and the Warrant Certificates.
(b) Compensation and Indemnification. The Company
agrees promptly to pay the Warrant Agent the compensation to be agreed upon with
the Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred by the Warrant Agent in connection with the services
rendered hereunder by the
7.
<PAGE> 8
Warrant Agent. The Company also agrees to indemnify the Warrant Agent, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Warrant Agent, arising out of or in
connection with its acting as the Warrant Agent hereunder, as well as the costs
and expenses of defending against any claim of liability in the premises.
(c) Agent for the Company. In acting under this
Warrant Agreement and in connection with the Warrant Certificates, the Warrant
Agent is acting solely as an agent of the Company, and the Warrant Agent does
not assume any obligation or relationship of agency or trust for or with any of
the owners or holders of the Warrant Certificates.
(d) Counsel. The Warrant Agent may consult with
counsel satisfactory to it, and the opinion of such 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 accordance with the opinion of
such counsel.
(e) Documents. The Warrant Agent shall be protected
and shall incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper
parties.
(f) Certain Transactions. The Warrant Agent and its
officers, directors and employees may act as Trustee under the Indenture and may
become the owner of, or acquire any interest in, any Warrant Certificates, with
the same rights that it or they would have if it were not the Warrant Agent
hereunder, and, to the extent permitted by applicable law, they may engage or be
interested in any financial or other transaction with the Company and may act
on, or as depositary, trustee or agent for, any committee or body of holders of
the Debt Securities or other obligations of the Company as freely as if it were
not the Warrant Agent.
(g) No Liability for Interest. Except as set forth in
the Warrant Agreement, the Warrant Agent shall not be under any liability for
interest on any moneys or other consideration at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
(h) No Liability for Invalidity. The Warrant Agent
shall not incur any liability with respect to the validity of this Agreement or
any of the Warrant Certificates.
(i) No Responsibility for Representations. The
Warrant Agent shall not be responsible for any of the recitals or
representations contained herein or in the Warrant Certificates (except the
Warrant Agent shall be responsible for any
8.
<PAGE> 9
representations of the Warrant Agent herein and for its countersignature on the
Warrant Certificates), all of which are made solely by the Company.
(j) No Implied Obligations. The Warrant Agent shall
be obligated to perform such duties as are herein and in the Warrant
Certificates specifically set forth, but no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability, the payment
of which within a reasonable time is not, in its reasonable opinion, assured to
it. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of the proceeds of the
Warrant Certificates. The Warrant Agent shall have no duty or responsibility in
case of any default by the Company in the performance of its covenants or
agreements contained in the Warrant Certificates or in the case of the receipt
of any written demand from a holder of a Warrant Certificate with respect to
such default, including any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or, except as provided in Section
19 hereof, to make any demand upon the Company.
SECTION 17. Resignation and Appointment of Successor Warrant
Agent.
(a) The Company agrees, for the benefit of the
holders from time to time of the Warrant Certificates, that at all times there
shall be a Warrant Agent hereunder until all the Warrant Certificates are no
longer exercisable.
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided that such date shall not be less than 60 days after the date on which
such notice is given unless the Company agrees to accept less notice. The
Warrant Agent may be removed at any time by the filing with it of an instrument
in writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall take
effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a bank or trust company organized and
doing business under the laws of the United States of America or of any State,
in good standing, and authorized under such laws to exercise corporate trust
powers) and the acceptance of such appointment by such successor Warrant Agent.
Upon its resignation or removal, the Warrant Agent shall be entitled to the
payment by the Company of the compensation agreed to under Section 16(b) hereof
for, and to the reimbursement of all reasonable out-of-pocket expenses incurred
in connection with, the services rendered hereunder by the Warrant Agent.
9.
<PAGE> 10
(c) If at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or shall file a petition seeking relief under the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under any other
applicable federal or state bankruptcy law or similar law or make an assignment
for the benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the Federal Bankruptcy Code, as now constituted or hereafter amended, or
under any other applicable federal or state bankruptcy or similar law or if any
public officer shall have taken charge or control of the Warrant Agent or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Warrant Agent, qualified in accordance with the terms
of this Agreement, shall be appointed by the Company by an instrument in
writing, filed with the successor Warrant Agent. Upon the appointment of a
successor Warrant Agent and acceptance by the latter of such appointment, the
Warrant Agent so superseded shall cease to be the Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Warrant Agent shall be entitled to receive, all
moneys, securities and other property on deposit with or held by such
predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the Warrant
Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that it
shall be qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 18. Amendment. This Agreement may be amended by the
parties hereto, without the consent of the holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or in regard to matters
or questions arising under this Agreement as the Company and the Warrant Agent
may deem necessary or desirable,
10.
<PAGE> 11
provided such action shall not adversely affect the interests of the holders of
the Warrant Certificates.
SECTION 19. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent receives any notice or demand addressed to the
Company by the holder of a Warrant Certificate pursuant to the provisions of the
Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.
SECTION 20. Addresses. Any communication to the Warrant Agent
with respect to this Agreement shall be addressed to the address set forth in
the Warrant Agreement, and any such communication to the Company shall be
addressed to the Company at the following address:
WellPoint Health Networks Inc.
21555 Oxnard Street
Woodland Hills, CA 91367
or such other address as shall be specified in writing by the Warrant Agent or
by the Company.
SECTION 21. Delivery of Prospectus. If the Company is required
under applicable federal or state securities laws to deliver a prospectus upon
exercise of Warrants, the Company will furnish to the Warrant Agent sufficient
copies of a prospectus, and the Warrant Agent agrees that upon the exercise of
any Warrant Certificate by the holder thereof, the Warrant Agent will deliver to
such holder, prior to or concurrently with the delivery of the Debt Securities
issued upon such exercise, a copy of the prospectus.
SECTION 22. Obtaining of Governmental Approvals. The Company
will from time to time take all action that may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under federal and state laws, which
may be or become requisite in connection with the issuance, sale, transfer and
delivery of the Warrant Certificates, the exercise of the Warrants, and the
issuance, sale, transfer and delivery of the Debt Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
SECTION 23. Persons Having Rights Under Warrant Agreement.
Nothing in this Agreement is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof. All covenants, conditions, stipulations, promises and
agreements contained in this Agreement
11.
<PAGE> 12
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and their successors and of the holders of the Warrant Certificates.
SECTION 24. Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
SECTION 25. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 26. Inspection of Agreement. A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
SECTION 27. Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be construed in
accordance with the laws of such State.
12.
<PAGE> 1
EXHIBIT 5.1
July 19, 1996
WellPoint Health Networks Inc.
21555 Oxnard Street
Woodland Hills, CA 91367
Re: WellPoint Health Networks Inc. Registration
Statement on Form S-3 filed with the
Securities and Exchange Commission on July 19, 1996
Ladies and Gentlemen:
We have acted as counsel to WellPoint Health Networks Inc., a
California corporation (the "Company"), in connection with its registration
under the Securities Act of 1933, as amended, of debt securities and warrants to
purchase debt securities (together the "Offered Securities") with an aggregate
public offering price of $1,000,000,000, all as described in the Company's
Registration Statement on Form S-3.
In connection with this opinion, we have examined and relied
upon the Registration Statement and related Prospectus, the Company's Amended
and Restated Articles of Incorporation, the Company's Bylaws and originals or
copies certified to our satisfaction of such records, documents, certificates,
memorandum or other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below.
On the basis of the foregoing, and in reliance thereon, we
advise you that, in our opinion, when the Offered Securities have been issued
and sold as contemplated by the above Registration Statement and upon the
receipt of the requisite consideration therefor, the Offered Securities will be
valid and legally binding obligations of WellPoint Health Networks Inc. and, if
applicable, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to this firm under the
caption of "Legal Matters" therein.
<PAGE> 2
July 19, 1996
Page 2
It is understood that this opinion is to be used only in
connection with the offer and sale of the Offered Securities while the
Registration Statement is in effect.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
Exhibit 12.1
WELLPOINT HEALTH NETWORKS INC.
CALCULATION OF EARNINGS TO FIXED CHARGES
[dollars in millions]
<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
------------------ ----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings from continuing operations
(including extraordinary items)
before income taxes............... $101.0 $ 99.9 $302.8 $352.0 $291.8 $289.1 $244.6
Interest on borrowings............... - - - - - - -
One-third of rents................... 1.1 1.6 6.2 5.8 4.3 4.1 4.0
------ ------ ------ ------ ------ ------ ------
$102.1 $101.5 $309.0 $357.8 $296.1 $293.2 $248.6
====== ====== ====== ====== ====== ====== ======
Fixed Charges:
Interest on borrowings............ $ - $ - $ - $ - $ - $ - $ -
One-third of rents................ 1.1 1.6 6.2 5.8 4.3 4.1 4.0
------ ------ ------ ------ ------ ------ ------
$ 1.1 $ 1.6 $ 6.2 $ 5.8 $ 4.3 $ 4.1 $ 4.0
====== ====== ====== ====== ====== ====== ======
Ratio of earnings to fixed charges... 92.82 63.44 49.84 61.69 68.86 71.51 62.15
====== ====== ====== ====== ====== ====== ======
</TABLE>
24.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on
Form S-3 of our reports dated February 20, 1996, on our audits of the
consolidated financial statements of WellPoint Health Networks Inc. and the
financial statements of Blue Cross of California Commercial Operations and our
report dated February 23, 1996, except for Note 12 as to which the date is March
1, 1996, on our audits of the Post- Reorganization combined financial statements
of the Life & Health Benefits Management Division of Massachusetts Mutual Life
Insurance Company and Subsidiaries. We also consent to the reference to our Firm
under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Los Angeles, California
July 18, 1996
25.
<PAGE> 1
Exhibit 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [__]
______________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_______________
WELLPOINT HEALTH NETWORKS, INC.
(Exact name of obligor as specified in its charter)
California 95-3760-980
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
21555 Oxnard Street
Woodland Hills, California 91367
(Address of principal executive offices) (Zip code)
_______________
Debt Securities
(Title of the identure securities)
================================================================================
<PAGE> 2
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
<TABLE>
- ----------------------------------------------------------------------------------------
<CAPTION>
Name Address
- ----------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affilia-
tion.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Insasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 3rd day of July, 1996.
THE BANK OF NEW YORK
/s/DONNA MARIE WHITE
By: ______________________
Name: DONNA MARIE WHITE
Title: ASSISTANT TREASURER
-4-
<PAGE> 5
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business December 31, 1995, published in accordance
with a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ............. $ 4,500,312
Interest-bearing balances ...................................... 643,938
Securities:
Held-to-maturity securities .................................... 806,221
Available-for-sale securities .................................. 2,036,768
Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank:
Federal funds sold ............................................. 4,166,720
Securities purchased under agreements to resell ................ 50,413
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 27,068,535
LESS: Allowance for loan and lease losses .............. 520,024
LESS: Allocated transfer risk reserve .................... 1,000
Loans and leases, net of unearned income and allowance,
and reserve .................................................. 26,547,511
Assets held in trading accounts .................................. 758,462
Premises and fixed assets (including capitalized leases) ......... 615,330
Other real estate owned .......................................... 63,769
Investments in unconsolidated subsidiaries and associated
companies ...................................................... 223,174
Customers liability to this bank on acceptances outstanding ...... 900,795
Intangible assets ................................................ 212,220
Other assets ..................................................... 1,186,274
-----------
Total assets ..................................................... $42,711,907
===========
LIABILITIES
Deposits
In domestic offices ............................................ $21,248,127
Noninterest-bearing .................................. 9,172,079
Interest-bearing .................................... 12,076,048
In foreign offices, Edge and Agreement subsidiaries, and IBFs .. 9,535,088
Noninterest-bearing ..................................... 64,417
Interest-bearing ..................................... 9,470,671
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased ........................................ 2,095,668
Securities sold under agreements to repurchase ................. 69,212
Demand notes issued to the U.S. Treasury ......................... 107,340
Trading liabilities .............................................. 615,718
Other borrowed money:
With original maturity of one year or less ..................... 1,638,744
With original maturity of more than one year ................... 120,863
Bank's liability on acceptances executed and outstanding ......... 909,527
Subordinated notes and debentures ................................ 1,047,860
Other liabilities ................................................ 1,836,573
-----------
Total liabilities ................................................ 39,224,720
-----------
EQUITY CAPITAL
Common stock ..................................................... 942,284
Surplus .......................................................... 525,666
Undivided profits and capital reserves ........................... 1,995,316
Net unrealized holding gains (leases) on available-for-sale
securities ..................................................... 29,668
Cumulative foreign currency translation adjustments .............. ( 5,747)
-----------
Total equity capital ............................................. 3,487,187
-----------
Total liabilities and equity capital ............................. $42,711,907
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best or our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
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