<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 5, 1997
REGISTRATION NO. 333-08519
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WELLPOINT HEALTH NETWORKS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-4635504
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
------------------------
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)
------------------------
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)
------------------------
Copies to:
<TABLE>
<S> <C>
WILLIAM L. HUDSON, ESQ. WINTHROP B. CONRAD, JR., ESQ.
GIBSON, DUNN & CRUTCHER LLP JOHN J. MCCARTHY, JR., ESQ.
ONE MONTGOMERY STREET DAVIS POLK & WARDWELL
SAN FRANCISCO, CALIFORNIA 94104 450 LEXINGTON AVENUE
(415) 393-8200 NEW YORK, N.Y. 10017
(212) 450-4000
</TABLE>
================================================================================
AMENDMENT FILED PURSUANT TO RULE 414(D) OF THE SECURITIES ACT OF 1933
<PAGE> 2
On June 10, 1997, the shareholders of WellPoint Health Networks Inc., a
California corporation ("WellPoint California"), approved the reincorporation of
such company in Delaware (the "Reincorporation"). The Reincorporation was
effected via a merger involving WellPoint Health Networks Inc., a Delaware
corporation (the "Company") which was wholly owned by WellPoint California prior
to such merger, and a wholly owned subsidiary of the Company organized solely
for purposes of effecting such merger ("Merger Subsidiary"). As a result of the
merger, Merger Subsidiary was merged into WellPoint California, Merger
Subsidiary disappeared and WellPoint California became the surviving entity and
a wholly owned subsidiary of the Company. The merger was effected on August 4,
1997. By this amendment, the Company hereby adopts this Registration Statement
No. 333-08519 on Form S-3 as its own for all purposes of the Securities Act of
1933 and the Securities Exchange Act of 1934. This adoption is made pursuant to
Rule 414(d) as promulgated under the Securities Act of 1933.
<PAGE> 3
PROSPECTUS
$1,000,000,000
WELLPOINT HEALTH NETWORKS INC.
WellPoint Health Networks Inc., a Delaware 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.
------------------------
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.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
AUGUST 5, 1997
<PAGE> 4
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, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
and information statements and other information filed by the Company with the
Commission pursuant to the Exchange Act may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located 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 also be obtained from the Public Reference Branch of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Company is required to file electronic versions of such material with
the Commission through the Commission's Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system. The Commission maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Electronic
filings are publicly available at http://www.sec.gov within 24 hours of
acceptance. The Company's stock is listed on the New York Stock Exchange.
Reports, proxy and information statements and other information filed by the
Company can also be inspected 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 233 South Beaudry
Avenue, Los Angeles, California 90012.
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. 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.
REINCORPORATION
The Company was reincorporated in Delaware effective August 4, 1997 (the
"Reincorporation"). The Reincorporation was effected via a merger (the "Merger")
involving the Company, WellPoint Health Networks Inc., a California company
("WellPoint California"), which was the parent of the Company prior to the
Merger, and a wholly owned subsidiary of the Company organized solely for
purposes of effecting the Merger ("Merger Subsidiary"). Pursuant to the Merger,
Merger Subsidiary was merged into WellPoint California, Merger Subsidiary
disappeared and WellPoint California is the surviving entity and a wholly owned
subsidiary of the Company. As a result of the Merger, the Company is
substantially a holding company and the former shareholders of WellPoint
California became the stockholders of the Company. As used in this Prospectus,
the "Company" means WellPoint Health Networks Inc., a Delaware corporation, as
of or after August 4, 1997, and WellPoint Health Networks Inc., a California
corporation, (and its predecessors) prior to August 4, 1997.
2
<PAGE> 5
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of the Company's predecessor, WellPoint California,
filed with the Commission (File No. 1-14340) are incorporated herein by
reference:
(i) WellPoint California's Annual Report on Form 10-K for the year
ended December 31, 1996;
(ii) WellPoint California's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997;
(iii) WellPoint California's Current Reports and Form 8-K filed
January 2, 1997 and March 14, 1997 (as amended by Amendment No. 1 on Form
8-K/A filed May 14, 1997); and
(iv) WellPoint California's definitive Proxy Statement on Schedule 14A
filed May 8, 1997.
The following documents of the Company filed with the Commission (File No.
001-13803) are incorporated herein by reference:
(i) The Company's Registration Statement on Form 8-B filed June 12,
1997; and
(ii) The Company's Current Report on Form 8-K filed August 5, 1997.
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 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, Attention: Secretary. The Company's telephone number is
(818) 703-4000.
3
<PAGE> 6
THE COMPANY
GENERAL
WellPoint is one of the nation's largest publicly traded managed health
care companies with approximately 5.9 million medical members, 12.9 million
pharmacy members and 3.0 million dental members as of March 31, 1997. The
Company offers a diversified mix of managed care products, including health
maintenance organizations ("HMOs"), preferred provider organizations ("PPOs")
and point-of-service ("POS") and other hybrid plans, and indemnity plans. The
Company's managed care plans incorporate a full range of financial incentives
and cost controls for both members and providers. The Company also provides a
broad array of specialty and other products, including pharmacy, dental, life,
workers' compensation, disability, behavioral health, COBRA and flexible
benefits account administration. In addition, the Company offers managed care
services for self-funded employers, including underwriting, actuarial services,
network access, medical cost management, claims processing and administrative
services. The Company's diversified mix of products and services has been
developed to meet the needs of a broad range of individuals, employer groups and
their employees. The Company's operations, with the exception of specialty
products, are organized into two internal business units with a geographic
focus. The Company markets its products in California primarily under the name
Blue Cross of California and outside of California primarily under the name
UNICARE.
The Company is a corporation organized under the laws of the State of
Delaware. The Company's principal executive offices are located at 21555 Oxnard
Street, Woodland Hills, California 91367 (telephone number: (818) 703-4000).
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the
net proceeds to be received by the Company from the sale of the Offered
Securities will be used to repay long-term indebtedness or 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>
QUARTER ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- ---------------------------------------- -------------
1992 1993 1994 1995 1996 1996 1997
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
71.5 68.9 61.7 49.8 9.0 92.8 7.6
</TABLE>
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.
4
<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 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.
5
<PAGE> 8
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 Debt Securities 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 Debt Securities,
provided that such 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
6
<PAGE> 9
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)
deposits, 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 Senior
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 Debt Securities, (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 Debt 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, (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.
7
<PAGE> 10
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 "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).
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 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
8
<PAGE> 11
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 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)
9
<PAGE> 12
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 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
10
<PAGE> 13
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 or leases of property or
assets made as part of any sale and leaseback transaction, (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.
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
11
<PAGE> 14
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.
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
12
<PAGE> 15
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.
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).
13
<PAGE> 16
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.
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
14
<PAGE> 17
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 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,
15
<PAGE> 18
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 Gibson, Dunn & Crutcher 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, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996, 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 combined financial statements of the Group Benefits Operations of John
Hancock Mutual Life Insurance Company and subsidiaries at December 31, 1996 and
1995 and for the years then ended, included in the Company's Amendment No. 1 on
Form 8-K/A to its Current Report on Form 8-K dated March 1, 1997, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such combined
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
16
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is a Delaware corporation. Section 145 of the General
Corporation Law of the state of Delaware (the "Delaware Law") empowers a
Delaware corporation to indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceedings, whether civil, criminal, administrative or investigative (other
than action by or in the right of such corporation), by reason of the fact that
such person was an officer or director of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe his
conduct was illegal. A Delaware corporation may indemnify officers and directors
in an action by or in the right of the corporation under the same conditions,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation in the
performance of his duty. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
The Company's certificate of incorporation provides that the liability of
the Company's directors to the Company or the Company's stockholders for
monetary damages for breach of fiduciary duty will be eliminated to the fullest
extent permissible under Delaware law except for (i) breaches of the duty of
loyalty; (ii) acts or omissions not in good faith or involving intentional
misconduct or knowing violations of the law; (iii) the payment of unlawful
dividends or unlawful stock repurchases or redemptions; or (iv) transactions in
which a director received an improper personal benefit.
The effect of these provisions is to eliminate the rights of the Company
and its stockholders (through stockholders' derivative suits on behalf of the
Company) to recover monetary damages against a director for breach of fiduciary
duty of care as a director (including breaches resulting from negligent or
grossly negligent behavior) except in certain limited situations. These
provisions do not limit or eliminate the rights of the Company or any
stockholder to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care. These provisions will not
alter the liability of directors under federal securities law.
The Company's bylaws provide that the Company will indemnify each present
and former director and officer of the Company or a predecessor company and each
of their respective subsidiaries, as such companies exist or have existed, and
such agents of the Company as the Board of Directors shall determine, to the
fullest extent provided by Delaware law.
In addition, the Company has entered into indemnification agreements with
its directors and certain officers that provide for the maximum indemnification
permitted by law.
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.
II-1
<PAGE> 20
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 the
requirements for filing on Form S-3 and has duly caused this Post-effective
Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, California, on the 5th day of August,
1997.
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 or her true and lawful
attorneys-in-fact and agents, each with full power of substitution, for him or
her and in his or her 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 or she might or could do in person, hereby ratifying
and confirming what each of said attorneys-in-fact and agents or any of them, or
his, her 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
Post-effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities indicated on the 5th day of August,
1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ -------------------------------------------------
<C> <S>
/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, Finance and Information
- ------------------------------------------ Services (Chief Financial Officer)
Howard G. Phanstiel
/s/ S. LOUISE MCCRARY Vice President, Chief Accounting Officer and
- ------------------------------------------ Controller (Chief Accounting Officer)
S. Louise McCrary
/s/ DAVID R. BANKS Director
- ------------------------------------------
David R. Banks
</TABLE>
II-2
<PAGE> 21
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ -------------------------------------------------
<C> <S>
/s/ W. TOLIVER BESSON Director
- ------------------------------------------
W. Toliver Besson
/s/ ROGER E. BIRK Director
- ------------------------------------------
Roger E. Birk
/s/ SHEILA P. BURKE Director
- ------------------------------------------
Sheila P. Burke
/s/ STEPHEN L. DAVENPORT Director
- ------------------------------------------
Stephen L. Davenport
/s/ JULIE A. HILL Director
- ------------------------------------------
Julie A. Hill
/s/ ELIZABETH A. SANDERS Director
- ------------------------------------------
Elizabeth A. Sanders
</TABLE>
II-3
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. EXHIBIT PAGE
- ----------- -------------------------------------------------------------------- ------------
<C> <S> <C>
1.1* Underwriting Agreement (superseding previously filed Exhibit 1.1)...
2.1 Recapitalization Agreement dated as of March 31, 1995 by and among
Blue Cross of California, WellPoint Health Networks Inc., Western
Health Partners, 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 and Plan of Reorganization dated as of July 22, 1997 by
and among WellPoint Health Networks Inc., a California corporation,
WLP Acquisition Corp., a California corporation, and the Company
(incorporated by reference from Exhibit 99.1 to the Company's Form
8-K filed on August 5, 1997, File No. 001-13803)....................
2.3 Agreement of Merger (incorporated by reference from Exhibit 3.3 to
the Company's Form 8-K filed on August 5, 1997, File No.
001-13803)..........................................................
4.1 Restated Certificate of Incorporation of the Company (incorporated
by reference from Exhibit 3.1 to the Company's Form 8-K filed on
August 5, 1997, File No. 001-13803) (superseding previously filed
Exhibit 4.1)........................................................
4.2 Bylaws of the Company (incorporated by reference from Appendix B to
WellPoint California's Schedule 14A filed on May 8, 1997, File No.
333-03292-01).......................................................
4.3 Form of Senior Indenture (superseding previously filed Exhibit
4.3)................................................................
4.4 Form of Subordinated Indenture (superseding previously filed Exhibit
4.4)................................................................
4.5 Form of Standard Debt Warrant Provisions (superseding previously
filed Exhibit 4.5)..................................................
5.1 Opinion of Gibson, Dunn & Crutcher LLP (superseding previously filed
Exhibit 5.1)........................................................
12.1 Statement regarding computation of ratios of earnings to fixed
charges (superseding previously filed Exhibit 12.1).................
23.1 Consent of Coopers & Lybrand L.L.P. (superseding previously filed
Exhibit 23.1).......................................................
23.2 Consent of Gibson, Dunn & Crutcher LLP (included in its Opinion set
forth as Exhibit 5.1) (superseding previously filed Exhibit 23.2)...
23.3 Consent of Ernst & Young LLP
24.1 Powers of Attorney (see signature page included in the Registration
Statement)..........................................................
25.1 Statement of Eligibility of Trustee on Form T-1 for The Bank of New
York as Trustee (superseding previously filed Exhibit 25.1).........
</TABLE>
- ---------------
* To be filed via Form 8-K.
<PAGE> 1
Exhibit 4.3
WELLPOINT HEALTH NETWORKS INC.
AND
THE BANK OF NEW YORK
Trustee
----------------------
Senior Debt Securities
-----------------------
INDENTURE
Dated as of _______, 1997
-----------------------
<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 _______,
1997 between WellPoint Health Networks Inc. and The Bank of New York, as
Trustee.
SECTION OF ACT SECTION OF INDENTURE
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
- ------------
* This cross reference sheet shall not, for any purpose, be deemed to be a part
of the Indenture.
i.
<PAGE> 3
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
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 I DEFINITIONS................................................................................... 1
SECTION 1.1 Certain Terms Defined............................................................... 1
ARTICLE II 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........................................... 8
SECTION 2.5 Execution of Securities............................................................. 9
SECTION 2.6 Certificate of Authentication....................................................... 9
SECTION 2.7 Denomination and Date of Securities; Payments of Interest........................... 10
SECTION 2.8 Registration, Transfer and Exchange................................................. 11
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities........................... 11
SECTION 2.10 Cancellation of Securities.......................................................... 12
SECTION 2.11 Temporary Securities................................................................ 12
SECTION 2.12 Securities in Global Form........................................................... 13
SECTION 2.13 CUSIP Numbers....................................................................... 13
ARTICLE III COVENANTS OF THE COMPANY...................................................................... 14
SECTION 3.1 Payment of Principal and Interest................................................... 14
SECTION 3.2 Offices for Payment, Etc............................................................ 14
SECTION 3.3 Paying Agents....................................................................... 14
SECTION 3.4 Written Statement to Trustee........................................................ 15
SECTION 3.5 Waiver of Certain Covenants......................................................... 15
SECTION 3.6 Limitation on Liens................................................................. 15
SECTION 3.7 Limitation on Sale and Lease-Back Transactions...................................... 16
SECTION 3.8 Calculation of Original Issue Discount.............................................. 17
ARTICLE IV SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY............................................. 17
SECTION 4.1 Company to Furnish Trustee Information as to Names and Addresses of
Securityholders..................................................................... 17
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists............................... 17
SECTION 4.3 Reports by the Company.............................................................. 18
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT....................................................................................... 19
SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default............... 19
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt....................... 21
SECTION 5.3 Application of Proceeds............................................................. 22
SECTION 5.4 Restoration of Rights on Abandonment of Proceedings................................. 23
SECTION 5.5 Limitations on Suits by Securityholders............................................. 23
SECTION 5.6 Unconditional Right of Securityholders to Institute Certain Suits................... 23
SECTION 5.7 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default............. 23
SECTION 5.8 Control by Securityholders.......................................................... 24
SECTION 5.9 Waiver of Past Defaults............................................................. 24
SECTION 5.10 Right of Court to Require Filing of Undertaking to Pay Costs........................ 24
</TABLE>
iii.
<PAGE> 5
<TABLE>
<S> <C>
SECTION 5.11 Suits for Enforcement............................................................... 24
ARTICLE VI CONCERNING THE TRUSTEE........................................................................ 25
SECTION 6.1 Duties of Trustee................................................................... 25
SECTION 6.2 Rights of Trustee................................................................... 26
SECTION 6.3 Individual Rights of Trustee........................................................ 27
SECTION 6.4 Trustee's Disclaimer................................................................ 27
SECTION 6.5 Notice of Defaults.................................................................. 27
SECTION 6.6 Reports by Trustee to Holders....................................................... 27
SECTION 6.7 Compensation and Indemnity.......................................................... 27
SECTION 6.8 Replacement of Trustee.............................................................. 28
SECTION 6.9 Successor Trustee by Merger......................................................... 29
SECTION 6.10 Eligibility; Disqualification....................................................... 29
SECTION 6.11 Preferential Collection of Claims Against Company................................... 29
ARTICLE VII CONCERNING THE SECURITYHOLDERS................................................................ 29
SECTION 7.1 Evidence of Action Taken by Securityholders......................................... 29
SECTION 7.2 Proof of Execution of Instruments................................................... 29
SECTION 7.3 Holders to Be Treated as Owners..................................................... 29
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding.................................. 30
SECTION 7.5 Right of Revocation of Action Taken................................................. 30
ARTICLE VIII SUPPLEMENTAL INDENTURES....................................................................... 30
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders.......................... 30
SECTION 8.2 Supplemental Indentures with Consent of Securityholders............................. 31
SECTION 8.3 Effect of Supplemental Indenture.................................................... 32
SECTION 8.4 Documents to Be Given to Trustee.................................................... 32
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures........................ 32
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE..................................................... 32
SECTION 9.1 Company May Consolidate, Etc. on Certain Terms...................................... 32
SECTION 9.2 Successor Corporation Substituted................................................... 33
SECTION 9.3 Opinion of Counsel to Trustee....................................................... 33
ARTICLE X SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS..................................... 33
SECTION 10.1 Satisfaction and Discharge of Indenture............................................. 33
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities................. 36
SECTION 10.3 Repayment of Moneys Held by Paying Agent............................................ 36
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and Paying Agent......................... 36
SECTION 10.5 Reinstatement of Company's Obligations.............................................. 37
ARTICLE XI MISCELLANEOUS PROVISIONS...................................................................... 37
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of Company Exempt
from Individual Liability........................................................... 37
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Securityholders......... 37
SECTION 11.3 Successors and Assigns of Company Bound by Indenture................................ 37
SECTION 11.4 Notices and Demands on Company, Trustee and Securityholders......................... 37
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained
Therein............................................................................. 38
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays..................................... 39
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939............. 39
</TABLE>
iv.
<PAGE> 6
<TABLE>
<S> <C>
SECTION 11.8 Delaware Law to Govern.............................................................. 39
SECTION 11.9 Counterparts........................................................................ 39
SECTION 11.10 Effect of Headings; Gender.......................................................... 39
ARTICLE XII REDEMPTION OF SECURITIES AND SINKING FUNDS..................................................... 39
SECTION 12.1 Applicability of Article............................................................ 39
SECTION 12.2 Notice of Redemption; Partial Redemptions........................................... 39
SECTION 12.3 Payment of Securities Called for Redemption......................................... 40
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption....... 41
SECTION 12.5 Mandatory and Optional Sinking Funds................................................ 41
SECTION 12.6 Repayment at the Option of the Holders.............................................. 43
SECTION 12.7 Conversion Arrangement on Call for Redemption....................................... 43
ARTICLE XIII CONVERSION OF SECURITIES....................................................................... 44
SECTION 13.1 Applicability of Article............................................................ 44
SECTION 13.2 Right of Holders to Convert Securities into Common Shares........................... 44
SECTION 13.3 Issuance of Common Shares on Conversions............................................ 44
SECTION 13.4 No Payment or Adjustment for Interest or Dividends.................................. 45
SECTION 13.5 Adjustment of Conversion Price...................................................... 45
SECTION 13.6 No Fractional Shares to Be Issued................................................... 48
SECTION 13.7 Preservation of Conversion Rights upon Consolidation, Merger, Sale or
Conveyance.......................................................................... 48
SECTION 13.8 Notice to Holders of the Securities of a Series Prior to Taking Certain Types
of Action........................................................................... 49
SECTION 13.9 Covenant to Reserve Shares for Issuance on Conversion of Securities................. 49
SECTION 13.10 Compliance with Governmental Requirements........................................... 49
SECTION 13.11 Payment of Taxes upon Certificates for Shares Issued upon Conversion................ 50
SECTION 13.12 Trustee's Duties with Respect to Conversion Provisions.............................. 50
SECTION 13.13 Conversion of Securities into Preferred Stock....................................... 50
</TABLE>
v.
<PAGE> 7
THIS INDENTURE, dated as of _________ __, 1997 between
WELLPOINT HEALTH NETWORKS INC., a Delaware 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 I
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.
"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
1.
<PAGE> 8
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 Delaware
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.
"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).
2.
<PAGE> 9
"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 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
3.
<PAGE> 10
(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 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.
"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.
4.
<PAGE> 11
"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.
"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."
5.
<PAGE> 12
ARTICLE II
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.
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,
6.
<PAGE> 13
(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 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;
7.
<PAGE> 14
(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 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
8.
<PAGE> 15
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 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.
9.
<PAGE> 16
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:
(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.
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
10.
<PAGE> 17
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.
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
11.
<PAGE> 18
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 (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
12.
<PAGE> 19
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.
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 III
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.
13.
<PAGE> 20
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 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.
14.
<PAGE> 21
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 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;
15.
<PAGE> 22
(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."
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 respect of Sale and Leaseback Transactions would not exceed
15% of the Consolidated Net Tangible Assets of the Company and its Subsidiaries.
16.
<PAGE> 23
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 IV
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 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
17.
<PAGE> 24
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 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).
18.
<PAGE> 25
ARTICLE V
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
(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
19.
<PAGE> 26
(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.
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
20.
<PAGE> 27
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 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
21.
<PAGE> 28
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:
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 majority in
22.
<PAGE> 29
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 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
23.
<PAGE> 30
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.
ARTICLE VI
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.
24.
<PAGE> 31
(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.
(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.
25.
<PAGE> 32
(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 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.
26.
<PAGE> 33
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 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;
27.
<PAGE> 34
(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 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 VII
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
28.
<PAGE> 35
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 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 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.
29.
<PAGE> 36
ARTICLE VIII
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.
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
30.
<PAGE> 37
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.
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
31.
<PAGE> 38
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 IX
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.
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.
32.
<PAGE> 39
ARTICLE X
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 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
33.
<PAGE> 40
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 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.
34.
<PAGE> 41
(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(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 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
35.
<PAGE> 42
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.
ARTICLE XI
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.
36.
<PAGE> 43
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 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 that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate,
37.
<PAGE> 44
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 Delaware Law to Govern. This Indenture and each
Security shall be deemed to be a contract under the internal laws of the State
of Delaware (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.
ARTICLE XII
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
38.
<PAGE> 45
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 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
39.
<PAGE> 46
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 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
40.
<PAGE> 47
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
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 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
41.
<PAGE> 48
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.
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.
42.
<PAGE> 49
ARTICLE XIII
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.
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
Holder of the Security or Securities so surrendered stating that the Holder
irrevocably elects to convert
43.
<PAGE> 50
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 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
44.
<PAGE> 51
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 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.
45.
<PAGE> 52
(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, 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 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'
46.
<PAGE> 53
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.
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
47.
<PAGE> 54
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);
(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.
48.
<PAGE> 55
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.
* * * * *
49.
<PAGE> 56
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
WELLPOINT HEALTH NETWORKS INC.
By:____________________________________
Name:
Title:
THE BANK OF NEW YORK
as Trustee
By:____________________________________
Name:
Title:
50.
<PAGE> 1
Exhibit 4.4
WELLPOINT HEALTH NETWORKS INC.
AND
[ ]
Trustee
---------------------------------
Subordinated Debt Securities
---------------------------------
INDENTURE
Dated as of ________ ___, 1997
---------------------------------
<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 ______ ___, 1997 between
WellPoint Health Networks Inc. and [ ], as Trustee.
SECTION OF ACT SECTION OF INDENTURE
- -------------------------- -----------------------
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
316(a)(1)(B) 5.9
316(a)(2) N/A
316(b) 5.6
316(c) 2.7
- --------
* This cross reference sheet shall not, for any purpose, be deemed to be a
part of the Indenture.
i.
<PAGE> 3
SECTION OF ACT SECTION OF INDENTURE
- -------------------------- -----------------------
317(a)(1) 5.2
317(a)(2) 5.2
317(b) 3.2 and 3.3
318(a) 1.7
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
Page
ARTICLE I DEFINITIONS........................................................ 1
SECTION 1.1 Certain Terms Defined...................................... 1
ARTICLE II SECURITIES...................................................... 5
SECTION 2.1 Forms Generally............................................ 5
SECTION 2.2 Form of Trustee's Certificate of Authentication............ 5
SECTION 2.3 Amount Unlimited; Issuable in Series....................... 6
SECTION 2.4 Authentication and Delivery of Securities.................. 7
SECTION 2.5 Execution of Securities.................................... 8
SECTION 2.6 Certificate of Authentication.............................. 8
SECTION 2.7 Denomination and Date of Securities; Payments of Interest.. 8
SECTION 2.8 Registration, Transfer and Exchange........................ 10
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.. 10
SECTION 2.10 Cancellation of Securities................................. 11
SECTION 2.11 Temporary Securities....................................... 11
SECTION 2.12 Securities in Global Form.................................. 11
ARTICLE III COVENANTS OF THE COMPANY........................................ 12
SECTION 3.1 Payment of Principal and Interest.......................... 12
SECTION 3.2 Offices for Payment, etc................................... 12
SECTION 3.3 Paying Agents.............................................. 12
SECTION 3.4 Written Statement to Trustee............................... 13
SECTION 3.5 Calculation of Original Issue Discount..................... 13
ARTICLE IV SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE......................................................... 13
SECTION 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Securityholders............................... 13
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists...... 14
SECTION 4.3 Reports by the Company..................................... 15
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT......................................................... 15
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default................................ 15
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee
May Prove Debt............................................. 17
SECTION 5.3 Application of Proceeds.................................... 18
SECTION 5.4 Restoration of Rights on Abandonment of Proceedings........ 19
SECTION 5.5 Limitations on Suits by Securityholders.................... 19
SECTION 5.6 Unconditional Right of Securityholders to
Institute Certain Suits.................................... 19
SECTION 5.7 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default...................................... 20
iii.
<PAGE> 5
SECTION 5.8 Control by Securityholders............................... 20
SECTION 5.9 Waiver of Past Defaults.................................. 20
SECTION 5.10 Right of Court to Require Filing of Undertaking
to Pay Costs............................................. 20
SECTION 5.11 Suits for Enforcement.................................... 21
ARTICLE VI CONCERNING THE TRUSTEE......................................... 21
SECTION 6.1 Duties of Trustee........................................ 21
SECTION 6.2 Rights of Trustee........................................ 22
SECTION 6.3 Individual Rights of Trustee............................. 23
SECTION 6.4 Trustee's Disclaimer..................................... 23
SECTION 6.5 Notice of Defaults....................................... 23
SECTION 6.6 Reports by Trustee to Holders............................ 23
SECTION 6.7 Compensation and Indemnity............................... 24
SECTION 6.8 Replacement of Trustee................................... 24
SECTION 6.9 Successor Trustee by Merger.............................. 25
SECTION 6.10 Eligibility; Disqualification............................ 25
SECTION 6.11 Referential Collection of Claims Against Company......... 25
ARTICLE VII CONCERNING THE SECURITYHOLDERS................................. 25
SECTION 7.1 Evidence of Action Taken by Securityholders.............. 25
SECTION 7.2 Proof of Execution of Instruments........................ 25
SECTION 7.3 Holders to Be Treated as Owners.......................... 26
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding....... 26
SECTION 7.5 Right of Revocation of Action Taken...................... 26
ARTICLE VIII SUPPLEMENTAL INDENTURES........................................ 26
SECTION 8.1 Supplemental Indentures Without Consent
of Securityholders....................................... 26
SECTION 8.2 Supplemental Indentures with Consent
of Securityholders....................................... 27
SECTION 8.3 Effect of Supplemental Indenture......................... 28
SECTION 8.4 Documents to Be Given to Trustee......................... 28
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures.................................. 28
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE...................... 28
SECTION 9.1 Company May Consolidate, etc............................. 28
SECTION 9.2 Successor Corporation Substituted........................ 29
SECTION 9.3 Opinion of Counsel to Trustee............................ 29
ARTICLE X SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS...... 29
SECTION 10.1 Satisfaction and Discharge of Indenture.................. 29
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities.................................... 31
SECTION 10.3 Repayment of Moneys Held by Paying Agent................. 31
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee
and Paying Agent......................................... 32
SECTION 10.5 Reinstatement of Company's Obligations................... 32
iv.
<PAGE> 6
ARTICLE XI MISCELLANEOUS PROVISIONS...................................... 32
SECTION 11.1 Incorporators, Stockholders, Officers and Directors
of Company Exempt from Individual Liability.............. 32
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Securityholders........................... 32
SECTION 11.3 Successors and Assigns of Company Bound
by Indenture............................................. 33
SECTION 11.4 Notices and Demands on Company, Trustee
and Securityholders...................................... 33
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein....................... 33
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.......... 34
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939.............................. 34
SECTION 11.8 Delaware Law to Govern................................... 34
SECTION 11.9 Counterparts............................................. 34
SECTION 11.10 Effect of Headings; Gender............................... 34
ARTICLE XII REDEMPTION OF SECURITIES AND SINKING FUNDS.................... 34
SECTION 12.1 Applicability of Article................................. 34
SECTION 12.2 Notice of Redemption; Partial Redemptions................ 34
SECTION 12.3 Payment of Securities Called for Redemption.............. 36
SECTION 12.4 Exclusion of Certain Securities from Eligibility
for Selection for Redemption............................. 36
SECTION 12.5 Mandatory and Optional Sinking Funds..................... 36
SECTION 12.6 Repayment at the Option of the Holders................... 38
SECTION 12.7 Conversion Arrangement on Call for Redemption............ 38
ARTICLE XIII CONVERSION OF SECURITIES...................................... 39
SECTION 13.1 Applicability of Article................................. 39
SECTION 13.2 Right of Holders to Convert Securities
into Common Shares....................................... 39
SECTION 13.3 Issuance of Common Shares on Conversions................. 39
SECTION 13.4 No Payment or Adjustment for Interest or Dividends....... 40
SECTION 13.5 Adjustment of Conversion Price........................... 40
SECTION 13.6 No Fractional Shares to Be Issued........................ 43
SECTION 13.7 Preservation of Conversion Rights upon
Consolidation, Merger, Sale or Conveyance................ 43
SECTION 13.8 Notice to Holders of the Securities of a Series
Prior to Taking Certain Types of Action.................. 44
SECTION 13.9 Covenant to Reserve Shares for Issuance
on Conversion of Securities.............................. 44
SECTION 13.10 Compliance with Governmental Requirements................ 44
SECTION 13.11 Payment of Taxes upon Certificates for
Shares Issued upon Conversion............................ 45
SECTION 13.12 Trustee's Duties with Respect to Conversion Provisions... 45
SECTION 13.13 Conversion of Securities into Preferred Stock............ 45
ARTICLE XIV SUBORDINATION OF SECURITIES................................... 45
SECTION 14.1 Securities Subordinated to Senior Indebtedness........... 45
SECTION 14.2 Subrogation.............................................. 46
SECTION 14.3 Obligation of the Company Unconditional.................. 47
SECTION 14.4 Payments on Securities Permitted......................... 47
SECTION 14.5 Effectuation of Subordination by Trustee................. 47
v.
<PAGE> 7
SECTION 14.6 Knowledge of Trustee..................................... 47
SECTION 14.7 Trustee May Hold Senior Indebtedness..................... 48
SECTION 14.8 Rights of Holders of Senior Indebtedness Not Impaired.... 48
vi.
<PAGE> 8
THIS INDENTURE, dated as of _______ ___, 1997 between WellPoint Health
Networks Inc., a Delaware 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 I
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.
"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.
1.
<PAGE> 9
"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 Delaware 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.
"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.
2.
<PAGE> 10
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
(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.
3.
<PAGE> 11
"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."
"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, 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.
4.
<PAGE> 12
"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 II
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each Series shall be
substantially in such form (including temporary or definitive globalform) 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.
[ ,] 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.
5.
<PAGE> 13
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 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;
6.
<PAGE> 14
(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 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
(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
7.
<PAGE> 15
(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 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.
8.
<PAGE> 16
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:
(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.
9.
<PAGE> 17
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.
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
10.
<PAGE> 18
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 anytime
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 (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
11.
<PAGE> 19
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.
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 III
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
12.
<PAGE> 20
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 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.
ARTICLE IV
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
13.
<PAGE> 21
(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
(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
14.
<PAGE> 22
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
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 V
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
15.
<PAGE> 23
(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 "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 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
16.
<PAGE> 24
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 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
17.
<PAGE> 25
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 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:
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
18.
<PAGE> 26
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 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
19.
<PAGE> 27
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 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
20.
<PAGE> 28
enforce any of such rights, either at law or inequity 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.
ARTICLE VI
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:
(i) 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
(1) 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.
(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.
21.
<PAGE> 29
(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 whichit
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 counselor 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 misconductor
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, 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 up on 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.
22.
<PAGE> 30
(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).
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
23.
<PAGE> 31
(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 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 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.
24.
<PAGE> 32
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 Referential 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 VII
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 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.
25.
<PAGE> 33
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
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 VIII
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;
26.
<PAGE> 34
(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.
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.
27.
<PAGE> 35
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 IX
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, 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
28.
<PAGE> 36
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.
ARTICLE X
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
29.
<PAGE> 37
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 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 (i) 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 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
30.
<PAGE> 38
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 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
31.
<PAGE> 39
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.
ARTICLE XI
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
32.
<PAGE> 40
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 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 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
33.
<PAGE> 41
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 Delaware Law to Govern. This Indenture and each Security
shall be deemed to be a contract under the internal laws of the State of
Delaware (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.
ARTICLE XII
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
34.
<PAGE> 42
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 beredeemed 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 beredeemed 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 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 beredeemed, 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
35.
<PAGE> 43
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.
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
36.
<PAGE> 44
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 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.
37.
<PAGE> 45
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.
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 XIII
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.
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
38.
<PAGE> 46
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 maybe
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
maybe 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.
39.
<PAGE> 47
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 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
40.
<PAGE> 48
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 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, 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
41.
<PAGE> 49
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.
(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
42.
<PAGE> 50
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 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 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);
43.
<PAGE> 51
(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, be fore
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.
44.
<PAGE> 52
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.
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 XIV
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;
45.
<PAGE> 53
(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 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 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
46.
<PAGE> 54
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 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.
47.
<PAGE> 55
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:
48.
<PAGE> 1
EXHIBIT 4.5
WELLPOINT HEALTH NETWORKS INC.
STANDARD DEBT SECURITIES WARRANT
AGREEMENT PROVISIONS
, 1997
1.
<PAGE> 2
From time to time, WellPoint Health Networks Inc., a Delaware
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.
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
2.
<PAGE> 3
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 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
3.
<PAGE> 4
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.
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
4.
<PAGE> 5
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 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,
5.
<PAGE> 6
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.
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
6.
<PAGE> 7
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 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.
7.
<PAGE> 8
(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 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
8.
<PAGE> 9
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.
(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
9.
<PAGE> 10
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, 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
10.
<PAGE> 11
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 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.
11.
<PAGE> 1
EXHIBIT 5.1
August 5, 1997
WellPoint Health Networks Inc.
21555 Oxnard Street
Woodland Hills, CA 91367
Re: WellPoint Health Networks Inc. Post-Effective
Amendment No. 1 Registration Statement on Form S-3
filed with the Securities and Exchange Commission
on August 5, 1997
Ladies and Gentlemen:
We have acted as counsel to WellPoint Health Networks Inc., a Delaware
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
Post-Effective Amendment No. 1 to its 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 Restated
Certificate 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
"duly and validly issued, fully paid and nonassessable and will constitute
binding obligations of WellPoint Health Networks Inc., subject to the effect of
(a) applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws and court decisions of general application including, without
limitation, statutory or other laws regarding fraudulent or preferential
transfers and (b) the application of general principles of equity (regardless
of whether enforcement is considered in proceedings in equity or at law)."
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
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/ Gibson, Dunn & Crutcher LLP
GIBSON, DUNN & CRUTCHER LLP
<PAGE> 1
WELLPOINT HEALTH NETWORKS INC.
EXHIBIT 12.1 - STATEMENT REGARDING COMPUTATION OF
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three Months
Ended
(Dollars in millions) Year Ended December 31, March 31,
--------------------------------------------------- -----------------
1996 1995 1994 1993 1992 1997 1996
------- ------- ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings from continuing
operations before
income taxes $ 339.5 $ 302.8 $ 352.0 $ 291.8 $ 289.1 $ 85.3 $ 101.0
Interest on borrowings 36.6 - - - - 10.8 -
One-third of rents 6.1 6.2 5.8 4.3 4.1 2.2 1.1
------- ------- ------- ------- ------- ------ -------
Earnings $ 382.2 $ 309.0 $ 357.8 $ 296.1 $ 293.2 $ 98.3 $ 102.1
======= ======= ======= ======= ======= ====== =======
Interest on borrowings $ 36.6 $ - $ - $ - $ - $ 10.8 $ -
One-third of rents 6.1 6.2 5.8 4.3 4.1 2.2 1.1
------- ------- ------- ------- ------- ------ -------
Fixed Charges $ 42.7 $ 6.2 $ 5.8 $ 4.3 $ 4.1 $ 13.0 $ 1.1
======= ======= ======= ======= ======= ====== =======
Ratio of earnings
to fixed charges 9.0 49.8 61.7 68.9 71.5 7.6 92.8
======= ======= ======= ======= ======= ====== =======
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
WellPoint Health Networks Inc., on Post Effective Amendment No. 1 to Form S-3
(File No. 333-08519) of our report dated February 14, 1997, on our audits of
the consolidated financial statements of WellPoint Health Networks Inc. We also
consent to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand LLP
- -----------------------------
COOPERS & LYBRAND L.L.P.
Los Angeles, California
July 31, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Post
Effective Amendment No. 1 to the Registration Statement (Form S-3 No. 333-08519)
and related Prospectus of WellPoint Health Networks Inc. and to the
incorporation by reference therein of our report dated May 12, 1997, with
respect to the combined financial statements of The Group Benefits Operations
of John Hancock Mutual Life Insurance Company and subsidiaries included in
Amendment No. 1 on Form 8-K/A to WellPoint Health Networks Inc.'s Current
Report on Form 8-K dated March 1, 1997, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
--------------------------------
ERNST & YOUNG LLP
Boston, Massachusetts
August 1, 1997
<PAGE> 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)
Delaware 95-4635504
(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 indenture 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 10005
</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
AFFILIATION.
None.
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 17 C.F.R.
229.10(D).
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.
-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 31st day of July, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
-----------------------------------
Name: Vivian Georges
Title: Assistant Vice President
-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 March 31, 1997, 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 depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 8,249,820
Interest-bearing balances .......... 1,031,026
Securities:
Held-to-maturity securities ........ 1,118,463
Available-for-sale securities ...... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell .... 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ........................... 32,895,077
LESS: Allowance for loan and
lease losses ..................... 633,877
LESS: Allocated transfer risk
reserve .......................... 429
Loans and leases, net of unearned
income, allowance, and reserve ... 32,260,771
Assets held in trading accounts ...... 1,715,214
Premises and fixed assets (including
capitalized leases) ................ 684,704
Other real estate owned .............. 21,738
Investments in unconsolidated
subsidiaries and associated
companies .......................... 195,761
Customers' liability to this bank on
acceptances outstanding ............ 1,152,899
Intangible assets .................... 683,503
Other assets ......................... 1,526,113
-----------
Total assets ......................... $54,746,131
===========
LIABILITIES
Deposits:
In domestic offices ................ $25,614,961
Noninterest-bearing ................ 10,564,652
Interest-bearing ................... 15,050,309
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,103,615
Noninterest-bearing ................ 560,944
Interest-bearing ................... 14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase 2,093,286
Demand notes issued to the U.S. ......
Treasury ........................... 239,354
Trading liabilities .................. 1,399,064
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,075,092
With remaining maturity of more than
one year ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,160,012
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,840,245
-----------
Total liabilities .................... 50,560,708
===========
EQUITY CAPITAL
Common stock ......................... 942,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... (19,449)
Cumulative foreign currency transla-
tion adjustments ................... (13,034)
-----------
Total equity capital ................. 4,185,423
-----------
Total liabilities and equity
capital ............................ $54,746,131
===========
</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 of 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.
Alan R. Griffith }
J. Carter Bacot } Directors
Thomas A. Renyi }
