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Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
METRO-GOLDWYN-MAYER INC.
(Exact name of Registrant as specified in its charter)
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DELAWARE 95-4605850
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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2500 Broadway Street
Santa Monica, California 90404
(310) 449-3000
(Address, including zip code, and telephone number, including area code, of
Registrant's Principal Executive Offices)
ROBERT BRADA, ESQ.
Executive Vice President and General Counsel
METRO-GOLDWYN-MAYER INC.
2500 Broadway Street
Santa Monica, California 90404
(310) 449-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
JANET S. MCCLOUD, ESQ.
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, CA 90067
(310) 553-3000
Approximate date of commencement of proposed sale to public: As soon as
practicable after this registration statement becomes effective. If any of the
securities being registered on this Form are to be offered pursuant to dividend
or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Amount Maximum Maximum
Title of Each Class of to be Offering Price Aggregate Amount of Filing
Securities to be Registered Registered(1) Per Unit(2) Offering Price (1) Fee
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Common Stock, $0.01 par value, and
Debt Securities (2) (2) $750,000,000 $198,000 (3)
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(1) In no event will the aggregate maximum offering price of all securities to
be registered pursuant to this Registration Statement, and not previously
registered, exceed $750 million The securities registered hereunder may be
sold separately or together.
(2) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act.
(3) Calculated pursuant to Rule 457(o) of the Securities Act.
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and we are not soliciting offers to buy these +
+securities in any state where the offer as sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
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SUBJECT TO COMPLETION, DATED APRIL 28, 2000
[LOGO]
METRO-GOLDWYN-MAYER INC.
$750,000,000
Common Stock
and Debt Securities
We may use this prospectus to offer and sell from time to time, separately
or together, shares of our common stock and one or more series of our debt
securities, consisting of debentures, notes, bonds or other evidences of
indebtedness. These securities will have a total initial public offering price
not to exceed $750,000,000 and will be offered and sold at prices and on terms
to be determined at the time of sale. The terms of any offering will be set
forth in one or more prospectus supplements to this prospectus.
If the offering is for our common stock, the prospectus supplement will
also set forth the total number of shares offered, the offering price and the
terms of the offering. Our common stock trades on the New York Stock Exchange
under the symbol "MGM." On April 27, 2000, the closing price of our common stock
was $_____ per share.
If the offering is for debt securities, the prospectus supplement will set
forth the specific title, series, total principal amount, maturity, interest
rate (or the way interest is to be calculated), time of payment of interest,
whether the debt securities are to be represented by certificates, authorized
denominations, terms for redemption, sinking fund requirements, guarantees by
our subsidiaries, covenants and the initial public offering price. The
prospectus supplement will also contain information, where applicable, about
certain U.S. federal income tax considerations relating to the offered
securities.
As will be described in more detail in any prospectus supplement, the
securities may be offered through an underwriter or underwriting syndicates
represented by one or more managing underwriters, or through dealers. The
securities may also be sold directly or through agents to investors. See "Plan
of Distribution."
This prospectus may not be used to consummate sales of offered securities
unless accompanied by a prospectus supplement.
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Investment in these securities involves a high degree of risk. See "Risk
Factors" beginning on page 3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ______, 2000.
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Table Of Contents
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PAGE
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About this Prospectus............................................. 2
Forward-looking Statements........................................ 2
Risk Factors...................................................... 3
Use of Proceeds................................................... 8
Ratio of Earnings to Fixed Charges................................ 8
The Company....................................................... 10
Description of Debt Securities.................................... 11
Legal Matters..................................................... 21
Experts........................................................... 21
Where You Can Find More Information............................... 21
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ABOUT THIS PROSPECTUS
This prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, we may from time to time over approximately the next two
years, sell any combination of the securities described in this prospectus in
one or more offerings up to a total dollar amount of $750,000,000. This
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement also may add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"Where You Can Find More Information About the Company" on page 22 below.
You should rely only on the information or representations incorporated by
reference or provided in this prospectus and in the accompanying prospectus
supplement. We have not authorized anyone to provide you with different
information. You may obtain copies of the Registration Statement, or any
document which we have filed as an exhibit to the Registration Statement or to
any other SEC filing, either from the SEC or from the Secretary of the company
as described below. We are not making an offer of these securities in any state
where the offer is not permitted. You should not assume that the information in
this prospectus or in the accompanying prospectus supplement is accurate as of
any date other than the dates printed on the front of each such document.
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference forward-looking
statements, within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. Forward-looking statements typically can be
identified by the use of forward-looking words, such as "may," "will," "could,"
"project," "believe," "anticipate," "expect," "estimate," "continue,"
"potential," "plan," "intend," "forecast" and the like. These statements appear
in a number of places in this prospectus and the information incorporated by
reference and include statements regarding our current intentions, plans,
strategies, beliefs and expectations.
Forward-looking statements do not guarantee future performance and involve
risks and uncertainties that could cause actual results to differ materially
from those anticipated. The information contained in this prospectus, including
the information contained in "Risk Factors" beginning on p. 3, or incorporated
by reference, identifies important factors that could cause such differences.
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RISK FACTORS
Before you invest in our securities, you should be aware that there are
various risks, including those described below. We urge you to carefully
consider these risk factors, together with all of the other information included
in this prospectus and the information incorporated in this prospectus by
reference, before you decide to invest in our securities.
We have had significant losses, and we may have future losses.
We have not reported an operating profit for any fiscal year since 1988,
and while controlled by former management in 1991, our subsidiary MGM Studios
was the subject of an involuntary bankruptcy. We cannot assure you when, or if,
we will have a profitable year.
The accounting standards our financial statements are governed by are expected
to change.
The Financial Accounting Standards Board (known as FASB) is expected to
adopt certain changes that will alter reporting by motion picture companies.
FASB Statement No. 53, which previously allowed wide latitudes for booking movie
revenues and amortization, is expected to be rescinded shortly. The new
regulations will impose numerous changes to reporting, and many motion picture
company will take a one-time, non-cash charge of significant proportions to
conform to the new rules.
We anticipate that the new Rules will have a significant impact on our
Results of Operations for the foreseeable future. We are currently calculating
the financial impact of these new rules.
We are adversely affected by gaps in our motion picture production schedule.
Our revenues and operating results have been and may continue to be
adversely affected by the change in ownership of MGM Studios in 1996 and by
recent management changes. Such changes may result in a degree of uncertainty
among top artistic and creative talent about the viability of projects.
Additionally, management changes have resulted in delays in commencement of
production of motion pictures. We released nine motion pictures between August
1, 1996 and August 1, 1997, most of which were produced by others, ten motion
pictures in 1999, and we expect to release less than ten motion pictures in
2000.
We require outside financing to meet our anticipated cash requirements.
Our operations are capital intensive and our capacity to generate cash from
operations is presently insufficient to meet our anticipated cash requirements.
Accordingly, we must obtain substantial sources of outside financing. Such
financing may not be available in sufficient amounts for
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us to implement our business plan or may be available only on terms which are
disadvantageous to our stockholders.
Our cash flow in 1999 was adversely affected by the following factors,
among others:
. Our slate of motion pictures released during the first half of 1999
performed below expectations;
. We paid PolyGram N.V. $235 million to acquire certain of the PolyGram
film libraries;
. We paid Warner Home Video $225 million under our agreement to terminate
Warner Home Video's right to distribute our product in the home video
market;
. We incurred corporate restructuring expenses;
. We incurred approximately $9 million in costs to integrate the PolyGram
library into our operations and transition to domestic home video self-
distribution; and
. We funded 50 percent of the expenses of MGM Networks Latin America,
approximately $6.1 million.
Under our current strategy and business plan, we will continue to require a
substantial amount of cash for the following reasons:
. We will continue to make substantial investments in the production of
new feature films and television programs; and
. We may make additional investments to develop new distribution channels
to further exploit our motion picture library; however, we will evaluate
the level of our investments in light of our available capital and
changing market conditions.
If there are cash shortfalls, cash conserving measures may adversely affect our
long term prospects.
If necessary in order to manage our cash needs, we could delay or alter
production or release schedules or reduce our aggregate investment in new film
and television production costs. We cannot assure you that any of these steps
would be adequate or timely, or that acceptable arrangements could be reached
with third parties if necessary. In addition, although these steps would improve
our short-term cash flow and, in the case of partnering, reduce our exposure
should a motion picture perform below expectations, these steps could reduce our
long term cash flow and adversely affect our results of operations.
Our credit facility contains restrictions which limit our operating flexibility.
Our credit facility contains various covenants, including certain
limitations on indebtedness, dividends and capital expenditures and maintenance
of certain financial tests. We cannot assure you that we will be able to comply
with these or other covenants or conditions in the future, or that we will
generate sufficient cash flow to repay our indebtedness. We further cannot
assure you that, in the event the need arises, we will be able to obtain
additional financing or to refinance our indebtedness on terms acceptable to us,
or at all.
Our substantial leverage could adversely affect our financial health.
We are highly leveraged. Our substantial indebtedness could have important
adverse consequences to you. For example, it could:
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. require us to dedicate a substantial portion of our cash flow to the
repayment of our indebtedness, reducing the amount of cash flow
available to fund film and television production and other operating
expenses;
. limit our ability to obtain additional financing, if necessary, for
operating expenses;
. place us at a disadvantage compared to competitors with less debt or
greater financial resources;
. limit our flexibility in planning for, or reacting to, downturns in our
business, in our industry or in the economy in general; and
. limit our ability to pursue strategic acquisitions and other business
opportunities that may be in our best interests.
Our revenues and results of operations may fluctuate significantly.
Our revenues and results of operations are dependent significantly upon the
commercial success of the motion pictures and television programming that we
distribute, which cannot be predicted with certainty, as well as the timing of
our releases. Accordingly, our revenues and results of operations may fluctuate
significantly from period to period, and the results of any one period may not
be indicative of the results for any future periods.
In addition, entertainment industry accounting practices may accentuate
fluctuations in our operating results. In accordance with generally accepted
accounting principles and industry practice, we amortize film and television
programming costs using the "individual-film-forecast" method. Under this
accounting method, we amortize film and television programming costs for each
film or television program based on the following ratio:
Revenue earned by title in the current period
---------------------------------------------
Estimated total revenues by title
We regularly review, and revise when necessary, our total revenue estimates
on a title-by-title basis. This may result in a change in the rate of
amortization and/or a write-down of the film or television asset to net
realizable value. Results of operations in future years depend upon our
amortization of our film and television costs. Periodic adjustments in
amortization rates may significantly affect these results. The likelihood of our
reporting of losses is increased because the industry's accounting method
requires the immediate recognition of the entire loss where it is expected that
a motion picture or television program will not recover our investment. On the
other hand, the profit of a successful motion picture or television program must
be recognized over the entire revenue stream expected to be generated by the
individual picture or television program.
We may have lower revenues as a result of our motion picture production
strategy.
Based on our current business plan, MGM's annual release slate may include
proportionately fewer large budget "event" motion pictures than the current
release slates of the other major studios. We also contemplate a stronger focus
on pictures which will appeal to a younger demographic and a greater number of
co-productions than our prior strategy. We cannot assure you that our strategic
approach will enable us to produce commercially successful motion pictures.
Additionally, our current motion picture strategy involves co-producing or co-
financing a substantial portion of our motion pictures. These co-production
arrangements could reduce our long-term cash flow from pictures which perform
above expectations.
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We may not be able to meet our production goals and schedule.
The production, completion and distribution of motion pictures are subject
to numerous uncertainties, including financing requirements, the availability of
desired talent and quality material and the release schedule of the motion
pictures of our competitors. We cannot assure you that any of the pictures
scheduled for release in the remainder of 2000 or future periods will be
completed or released on schedule or budget, or at all.
We are limited in our ability to exploit our library.
Our rights to the titles in our library vary. In some cases we have only
the right to distribute titles in certain media and territories for a limited
term. Our rights in approximately 35 percent of our titles are limited in time.
Our rights with respect to approximately 20 percent of our titles will expire
before 2010. While in the past we have generally been able to renew expiring
rights on acceptable terms, we cannot assure you that we will continue to be
able to do so in the future. In accordance with industry practice, for purposes
of calculating the size of our library, we include any title in which we have
any distribution rights.
Additionally, prior management granted long-term domestic and major
international television licenses covering a substantial portion of our library,
in exchange for pre-paid fees. A cross-section of our library is subject to one
or more of these licenses, substantially all of the MGM/UA titles produced prior
to 1990, which have been licensed in the U.S. and Europe, and approximately 40
percent of the Orion and Polygram titles which have been licensed in Europe.
Until these agreements expire and the rights revert to us, we expect
contributions to earnings and cash flow from these markets to continue to be
below those of our competitors for similar products. We cannot assure you that
our sales or profitability will increase after these agreements expire.
We may not be able to realize the anticipated benefits of acquisitions.
In January 1999, we acquired over 1,300 feature film titles in the PolyGram
film libraries. In addition, we may consider strategic acquisitions as
opportunities arise, subject to the obtaining of any necessary financing.
Acquisitions involve numerous risks, including diversion of our management's
attention away from our operating activities. We cannot assure you that we will
not encounter unanticipated problems or liabilities relating to any of our
previous acquisitions or the integration of an acquired company's operations,
nor can we assure you that we will realize the anticipated benefits of any past
or future acquisitions.
We face risks relating to the international distribution of our product.
Because we have historically derived approximately 40 percent of our
revenues from non-U.S. sources, our business is subject to risks inherent in
international trade, many of which are beyond our control. These risks include:
. changes in laws and policies affecting trade, investment and taxes,
including laws and policies relating to the repatriation of funds and to
withholding taxes;
. differing degrees of protection for intellectual property;
. the instability of foreign economies and governments; and
. fluctuating foreign exchange rates.
Until October 31, 2000, we will distribute our motion pictures in
theatrical markets outside the U.S. and Canada through United International
Pictures B.V., or "UIP," a partnership among the company, Paramount
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Pictures Corporation and Universal Studios, Inc. Effective November 1, 2000, we
will withdraw from UIP and our international theatrical distribution will be
conducted through Fox Filmed Entertainment. While our cost structure is lower,
we cannot assure that we will realize the anticipated revenue enhancements of
our withdrawal from UIP or the early termination of our agreement with Warner
Home Video.
Production of first-run syndicated television programming may involve financial
risks.
First-run syndicated television programming is generally licensed based on
a pilot episode that we finance. If an insufficient number of stations license
the programming, our pilot costs will not be recouped. There is also financial
exposure to us after the programming is licensed to the extent that advertising
revenues and/or license fees we receive are not sufficient to cover production
costs. In addition, we may have certain financial obligations to the producer of
a first-run syndicated series if we cancel production prior to commencement of
production for any broadcast season for which the series was licensed.
Risks relating to implementing our branded cable and satellite programming
channel.
We may consider strategic opportunities to create branded cable and
satellite programming channels. We cannot assure you that we will have the
financing that may be necessary for such acquisitions or investments, that we
will consummate any such transactions or that we will be able to realize any
anticipated benefits from any such transactions.
Advances in technology may create alternate forms of entertainment.
The entertainment industry in general, and the motion picture industry in
particular, continue to undergo significant changes, primarily due to
technological developments. Due to this rapid growth of technology and shifting
consumer tastes, we cannot accurately predict the overall effect that such
changes may have on the potential revenue from and profitability of feature-
length motion pictures and television programming.
Some of our competitors have greater financial resources than we do.
Most of the other major studios are part of large diversified corporate
groups with a variety of other operations, including television networks and
cable channels, that can provide both a means of distributing their products and
stable sources of earnings and cash flows that offset fluctuations in the
financial performance of their motion picture and television operations. The
number of films released by our competitors, particularly the other major film
studios, in any given period may create an oversupply of product in the market,
which may reduce our share of gross box office admissions and make it more
difficult for our films to succeed. In addition, television networks are now
producing more programs internally and thus may reduce their demand for outside
programming.
The Tracinda Group owns a majority of our common stock and has the power to
elect our board of directors and influence our affairs.
Tracinda and one of its affiliates, which we refer to as the Tracinda
Group, beneficially own 179,276,977 shares, approximately 89.0 percent of our
outstanding common stock. In the aggregate, the Tracinda Group and our directors
and executive officers beneficially own approximately 89.8 percent of our
outstanding common stock. Our common stock does not have cumulative voting
rights and, since we anticipate that the Tracinda Group will continue to own
greater than 50 percent of our outstanding common stock for the foreseeable
future, it will have the ability to elect our entire board of directors and
determine the outcome of other matters submitted to our stockholders, such as
the approval of significant transactions, and otherwise to influence our
affairs.
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Our common stock has a relatively small public "float."
Of the 201,557,214 shares of our outstanding common stock, only
approximately 21,303,000 shares are owned by persons other than the Tracinda
Group and our executive officers and directors. Without a significantly larger
public float, our common stock will be less liquid than the common stock of
companies with broader public ownership and, as a result, the trading prices for
our common stock may be more volatile. Among other things, trading of a
relatively small volume of our common stock may have a greater impact on the
trading price for our stock than would be the case if our public float were
larger.
Future sales of shares of the common stock could decrease its market price.
We have approximately 201,557,214 shares of our common stock outstanding,
of which approximately 180,355,145 are "restricted" securities under Rule 144 of
the Securities Act and/or held by directors, officers or holders of ten percent
or more of our outstanding common stock. We have also granted, as of March 31,
2000, options to purchase a total of 23,712,023 shares of our common stock.
Furthermore, we have granted to Tracinda, and certain other holders of our
common stock or outstanding options registration rights with respect to the
shares they own or that we may issue to them. Possible or actual sales of any of
these shares, particularly by our directors and officers, under Rule 144 or
otherwise, may in the future decrease the price of shares of our common stock.
USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement, we plan to use
substantially all of the net proceeds from the sale of the offered securities
for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated:
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Year Ended December 31,
Year Ended January 1 to October 11 to --------------------------
December 31, 1996 October 10, 1996 December 31, 1996 1997 1998 1999
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Ratio of Earnings to Fixed Charges(1)(2) (1.05) (8.69) 1.37 (0.89) (0.58) (4.07)
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(1) For purposes of computing the foregoing ratios: (a) earnings consist of
income from continuing operations before income taxes and fixed charges,
adjusted to exclude capitalized interest, and (b) fixed charges consist of
interest, whether expensed or capitalized, amortization of debt discount and
issuance costs and the estimated interest component of rental expense. The
calculation of "Fixed Charges" does not include our share of interest costs of
our unconsolidated affiliates due to immateriality.
(2) The deficiencies for the year ended December 31, 1995, the period from
January 1 to October 10, 1996 and the years ended December 31, 1997, 1998 and
1999 were as follows (in thousands): $181,582; $737,643; $131,467; $155,886; and
$526,156, respectively.
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PRICE RANGE OF COMMON STOCK
The common stock is listed on the NYSE and trades under the symbol "MGM."
The following table sets forth for the quarters indicated the high and low
composite per share closing sales prices as reported by the NYSE.
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1998 High Low
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First Quarter................................ $24-3/16 $17-3/4
Second Quarter............................... 26-1/2 21-15/16
Third Quarter................................ 22-1/2 13-7/8
Fourth Quarter............................... 13-3/4 8
1999
First Quarter................................ $13-9/16 $10-3/8
Second Quarter............................... 18-5/8 12-11/16
Third Quarter................................ 21-5/8 16-7/8
Fourth Quarter............................... 25-1/8 15-1/2
2000
First Quarter................................ $28-1/2 $21-1/8
Second Quarter (through April 27, 2000)...... 27-9/16 23-3/4
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The last reported sales price of the common stock on the NYSE on April 27,
2000 was $27 9/16 per share. and 2000, there were more than 2,000
beneficial holders.
DIVIDEND POLICY
We have not paid any dividends to date on the common stock and currently
intend to retain any earnings to fund the operation and expansion of our
business and to service and repay our debt. Therefore, we do not intend to pay
cash dividends on our common stock for the foreseeable future. Furthermore, as a
holding company with no independent operations, our ability to pay dividends
will depend upon the receipt of dividends or other payments from our
subsidiaries. In addition, our primary credit facility contains financial
covenants that restrict our ability to pay dividends. Subject to the foregoing,
our Board of Directors has the sole discretion to pay cash dividends.
THE COMPANY
Overview
We develop, produce and distribute worldwide theatrical motion pictures and
television programs. Our subsidiaries include Metro-Goldwyn-Mayer Studios Inc.,
United Artists Corporation and Orion Pictures Corporation. We are one of only
seven major film and television studios worldwide. Our library contains over
4,100 theatrically released feature film titles and 8,900 television episodes
and is the largest collection of post-1948 feature films in the world. Films in
our library have won over 200 Academy Awards, including the Best Picture Award
for Annie Hall, The Apartment, The Best Years of Our Lives, Dances with Wolves,
Hamlet, In the Heat of the Night, Marty, Midnight Cowboy, Platoon, Rain Man,
Rocky, Silence of the Lambs, Tom Jones and West Side Story. Our library also
includes 21 titles in the James Bond film franchise, five titles in the Rocky
film franchise and nine titles in the Pink Panther film franchise.
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As used in this prospectus, the terms "we," "our," "us," "MGM" and "the
company" refer to Metro-Goldwyn-Mayer Inc. and our subsidiaries unless the
context indicates otherwise.
Business strategy.
Our goal is to become a fully-integrated global entertainment content
company, thereby maximizing the value of our assets, including our film and
television library and our film and television production and distribution
units. To achieve this goal we seek to:
Build and Leverage Our Library. We plan to build and leverage our film and
television library by:
. Producing new motion pictures and television episodes;
. Aggressively marketing and repackaging our library's titles;
. Developing new distribution channels;
. Capitalizing on developments in technology;
. Further penetrating emerging international markets; and
. Incentivizing our employees to drive growth in sales of our library's
titles.
Create Branded Cable and Satellite Programming Channels. We believe we can
create significant value by utilizing our library and current production to
establish MGM branded cable and satellite channels. We have been actively
exploring strategic alternatives to gain carriage for our proposed channels.
Increase Film and Television Production While Improving Our Risk Profile.
We intend to increase production in a financially disciplined manner by:
. Tightly controlling development and production expenditures;
. Involving members of senior management from all areas of our company
in the greenlighting process for films;
. Aggressively seeking production agreements and/or co-financing
partners for our pictures and television product;
. Entering into production agreements and joint ventures with key
producers of motion pictures and television product;
. Increasing our focus on the production of commercially successful
motion pictures which appeal to a younger demographic; and
. Using our film library as a proven source for sequels and remakes and
the expansion of certain well-tested, familiar film franchises.
We intend to produce or co-produce and distribute ten to 15 motion pictures
annually through MGM Pictures across a variety of genres. Through UA Films, we
also intend to distribute annually an additional seven to ten specialty motion
pictures that will have substantially lower average costs and will be produced
mainly by third parties.
We plan to develop, produce and distribute television programs focusing on
low financial risk formats, such as pre-clearing a television series for
distribution prior to committing to development
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expenditures, as well as joint ventures, co-productions and other partnering
arrangements for certain of our series.
Increase Distribution Revenues. We have taken steps to obtain greater
flexibility in distributing our own product to enable us to realize additional
revenue opportunities while reducing the costs associated with distribution. In
1999 we terminated our agreement with Warner Home Video so that, on February 1,
2000, we regained full control over the home video exploitation of our films.
We have actively planned the transition of our international distribution from
Warner Home Video and United International Pictures or "UIP" to Fox to gain more
control over our international distribution and to maximize our revenue
opportunities.
We plan to increase distribution revenues by:
. Self-distributing in the U.S. and Canada our library, as well as all
motion pictures produced by MGM Pictures and UA Films;
. Distributing films that we co-produce with a third party in those
territories where we have distribution rights and capabilities; and
. Distributing motion pictures produced by others.
Capitalize On A Well Recognized Brand Name. We believe that the MGM name
and lion logo are among the most recognized in the world. We intend to
capitalize on the value inherent in our name and logo through the distribution
of branded programming and the development of consumer products.
Streamline Operations. We have taken steps to make our operating process
more efficient in the following ways:
. Consolidating overhead across the MGM Pictures and UA production
units; and
. Consolidating and centralizing operating and corporate functions.
We intend to continue to pursue our goal of becoming an integrated global
entertainment content company. In pursuit of this goal, we may consider various
strategic alternatives, such as business combinations with companies with
strengths complementary to ours, other acquisitions and joint ventures, as
opportunities arise. The nature, size and structure of any such transaction
could require us to seek additional financing. Acquisitions and other strategic
alternatives, however, involve numerous risks, including diversion of
management's attention away from our operative activities. We cannot assure you
that we will not encounter unanticipated problems or liabilities with respect to
any acquisitions that have been or may be completed by MGM or with the
integration of an acquired company's operations with those of MGM, and we cannot
assure you that the anticipated benefits of any acquisitions and alternatives
that have been, or will be, completed by us will be achieved.
DESCRIPTION OF DEBT SECURITIES
The following provides a general description of the terms of the debt
securities which we may issue. The particular terms of any debt securities
offered by any prospectus supplement and the extent, if any, to which the
general provisions set forth below may not apply will be described in the
prospectus supplement relating to those debt securities.
We filed a form of indenture as an exhibit to the registration statement of
which this prospectus is a part. The debt securities will be issued under one
or more indentures, each dated as of a date on or before the issuance of the
debt securities to which it relates and in the form filed, subject to any
amendments or supplements as we may adopt from time to time. Each indenture
will be entered into between us, as obligor, a trustee chosen by us and
qualified to act as a trustee under the Trust Indenture
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Act of 1939, and any of our subsidiaries which guarantee our obligations under
the indenture. You should read the indenture because it, and not this
description, will control your rights as a holder of debt securities. The terms
of the indenture are also governed by the Trust Indenture Act.
General
The debt securities will be our direct obligations, which will rank
subordinate to our credit facility and may rank subordinate to, equally with or
senior to our other indebtedness. All debt securities of one series do not need
to be issued at the same time. Additionally, unless otherwise provided, a
series may be reopened, without the consent of the holders of the debt
securities of such series, for issuances of additional debt securities of such
series.
Terms of the Debt Securities
You should refer to the prospectus supplement for the following terms
of each series of the debt securities in respect of which this prospectus is
being delivered:
. the designation, aggregate principal amount and authorized
denominations of the series;
. the issue price as a percentage of the principal amount at which the
series will be issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon declaration
of acceleration of the maturity or upon redemption thereof and the
rate or rates at which original issue discount will accrue;
. the date or dates on which the series will mature;
. the rate or rates per annum, if any, at which the series will bear
interest;
. the times from which any interest will accrue, be payable and the
record dates pertaining thereto;
. the place or places where the principal and interest, if any, on the
series will be payable;
. any redemption or other special terms;
. the events of default and covenants relating to the debt securities
which are in addition to, modify or delete those described herein;
. whether the debt securities will be issued in certificated or book-
entry form, and the denominations thereof;
. if applicable, the terms of any right to convert debt securities into
shares of our common stock or other securities or property;
. provisions, if any, for the defeasance or discharge of certain of our
obligations with respect to such debt securities, which provisions may
be in addition to, in substitution for, or in modification of (or any
combination of the foregoing), the provisions of the indenture;
. the manner in which the amounts of payment of principal of, premium,
if any, or interest on such debt securities will be determined, if
such amounts may be determined by reference to an index based on a
currency or currencies other than that in which such debt securities
are denominated or designated to be payable or by reference to a
commodity, commodity index, stock exchange index or financial index;
. a discussion of any material and/or special United States federal
income tax considerations applicable to such debt securities;
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. any depositaries, trustees, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to the debt
securities other than those originally appointed;
. whether such debt securities will be issued in the form of one or more
global securities and whether such global securities are to be
issuable in a temporary global form or permanent global form;
. the terms, if any, on which such debt securities will be subordinate
to other debt;
. any listing or intended listing of the debt securities on a securities
exchange; and
. any other terms of the debt securities, which other terms will not be
inconsistent with the provisions of the indenture.
Our debt securities may be sold at a discount below their principal
amount. Even if our debt securities are not issued at a discount below their
principal amount, these securities may, for United States federal income tax
purposes, be deemed to have been issued with original issue discount because of
certain interest payment or other characteristics. Special United States
federal income tax considerations applicable to debt securities issued with
original issue discount will be described in more detail in any applicable
prospectus supplement. In addition, special United States federal tax
considerations or other restrictions or terms applicable to any debt securities
offered exclusively to foreigners or denominated in a currency other than United
States dollars will also be set forth in the prospectus supplement, if
applicable.
Information about the trustee.
Our indenture provides that there may be more than one trustee, each
with respect to one or more series of debt securities. Any trustee under our
indenture may resign at any time or be removed with respect to one or more
series of debt securities, and a successor trustee may be appointed to act with
respect to such series. If two or more persons are acting as trustees with
respect to different series of debt securities, each trustee shall be separate
and apart from the trust administered by any other trustee. Except as indicated
in this prospectus or any prospectus supplement, any action to be taken by the
trustee may be taken only with respect to the one or more series of debt
securities for which it is trustee under the indenture.
Merger, Consolidation or Sale of Assets
Our indenture does not allow us to consolidate or merge with or into,
or sell, assign, convey, transfer or lease our properties and assets,
substantially in their entirety, computed on a consolidated basis, to, another
corporation, person or entity unless:
. we are the surviving person, in the case of a merger or consolidation,
or the successor or transferee is a corporation organized under the
laws of the United States, or any state or the District of Columbia
and such successor or transferee corporation expressly assumes, by
supplemental indenture, all of our obligations under the debt
securities and the indenture; and
. no default or event of default exists immediately after such
transaction.
Denominations
Unless we specify in the prospectus supplement, the debt securities of
any series will be issuable only as debt securities in denominations of $1,000,
and any integral multiple thereof, and will be payable only in U.S. dollars.
The indenture also provides that debt securities of a series may be issuable in
global form. See "Global Securities" below.
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Registration and Transfer
If you surrender for transfer your registered debt securities at the
office or agency we maintain for such purpose, we will deliver, in the name you
have designated as transferee, one or more new debt securities of the same
series of like aggregate principal amount in such denominations as are
authorized for debt securities of such series and of a like maturity and with
like terms and conditions. You will not incur a service charge for any transfer
or exchange of debt securities, but we may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection with the
transfer or exchange.
We will not be required to:
. register, transfer or exchange debt securities of any series during a
period beginning with the opening of business 15 days before the day
of the transmission of a notice of redemption of debt securities of
such series selected for redemption, and ending at the close of
business on the day of the transmission; or
. register, transfer or exchange any debt security so selected for
redemption in whole or in part, except the unredeemed portion of any
debt security being redeemed in part.
Events of Default
Unless we inform you otherwise in the prospectus supplement, events of
default means any of the following:
. default in the payment of any interest upon any debt security of that
series when it becomes due and payable, and continuance of such
default for a period of 30 days;
. default in the payment of principal of or premium, if any, on any debt
security of that series when due;
. if applicable, default in the deposit of any sinking fund payment,
when and as due in respect of any debt security of that series;
. default in the performance, or breach, of any covenants or warranties
in the indenture if the default continues uncured for a period of 60
days after written notice to us by the applicable trustee or to us and
the applicable trustee by the holders of at least 25% in principal
amount of the outstanding debt securities of that series as provided
in the indenture; and
. certain events of bankruptcy, insolvency or reorganization.
If an event of default for any series of debt securities, which are at that
time outstanding, occurs and continues, then the applicable trustee or the
holders of not less than 25% in principal amount of the outstanding debt
securities of that series may, by a notice in writing to us, and to the
applicable trustee if given by the holders, declare to be due and payable
immediately the principal, or if the debt securities of that series are discount
securities such portion of the principal amount as may be specified in the terms
of that series and premium, if any, of all debt securities of that series.
At any time after a declaration of acceleration with respect to debt
securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the applicable trustee, the
holders of a majority in principal amount of the outstanding debt securities of
that series may, subject to our having paid or deposited with the trustee a sum
sufficient to pay overdue interest and principal which has become due other than
by acceleration and certain other conditions, rescind and annul such
acceleration if all events of default, other than the non-payment of accelerated
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principal and premium, if any, with respect to debt securities of that series,
have been cured or waived as provided in the indenture. For information as to
waiver of defaults see the discussion set forth below under "Modification and
Waiver."
You should refer to our prospectus supplement with regard to any series of
debt securities that are discount securities for the particular provisions
relating to acceleration of a portion of the principal amount of such discount
securities upon the occurrence and continuation of an event of default.
The indenture provides that the trustee is not obligated to exercise any of
its rights or powers under the indenture at the request of any holder of
outstanding debt securities, unless the trustee receives indemnity satisfactory
to it against any loss, liability or expense. Subject to certain rights of the
trustee, the holders of a majority in principal amount of the outstanding debt
securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the trustee or
exercising any trust or power conferred on the trustee with respect to the debt
securities of that series.
No holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise with respect to the indenture or
for the appointment of a receiver or trustee, or for any remedy under the
indenture, unless such holder shall have previously given to the applicable
trustee written notice of a continuing event of default with respect to debt
securities of that series and the holders of at least 25% in principal amount of
the outstanding debt securities of that series shall have made written request,
and offered reasonable indemnity, to such trustee to institute such proceeding
as trustee, and the trustee shall not have received from the holders of a
majority in principal amount of the outstanding debt securities of that series
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, the holder of any debt security will have an
absolute and unconditional right to receive payment of the principal of,
premium, if any, and any interest on such debt security on or after the due
dates expressed in such debt security and to institute suit for the enforcement
of any such payment.
We are required by the indenture, within 120 days after the end of each
fiscal year, to furnish to the trustee a statement as to compliance with the
indenture. The indenture provides that the trustee with respect to any series
of debt securities may withhold notice to the holders of debt securities of such
series of any default or event of default (except a default in payment on any
debt securities of such series) with respect to debt securities of such series
if and so long as a committee of its trust officers, in good faith, determines
that withholding such notice is in the interest of the holders of debt
securities of such series.
Modification and Waiver
We and the applicable trustee, at any time and from time to time, may
modify the indenture without prior notice to or consent of any holder of any
series of debt securities for any of the following purposes:
. to permit a successor corporation to assume our covenants and under
the indenture and in such series of debt securities in accordance with
the terms of the indenture;
. to add to our covenants for the benefit of the holders of any series
of debt securities (and if the covenants are to be for the benefit of
less than all the series, we shall state that the covenants are
expressly being included solely for the benefit of the applicable
series);
. to surrender any of our rights or powers conferred in the indenture;
. to add any additional events of default (and if the events of default
are to be applicable to less than all series, we shall state that the
events of default are expressly being included solely for the benefit
of the applicable series);
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to add to, change or eliminate any of the provisions of the indenture in a
manner that will become effective only when there is no outstanding debt
security which is entitled to the benefit of the provision and as to which the
modification would apply;
. to secure a series of debt securities and the terms and conditions for
the release or substitution of the security;
. to supplement any of the provisions of the indenture to the extent
needed to permit or facilitate the defeasance and discharge of a
series of debt securities in a manner that will not adversely affect
the interests of the holders of debt securities of that series or any
other series of debt securities issued under the indenture in any
material respect;
. to establish the form or terms of debt securities as permitted by the
indenture;
. to provide for the acceptance of appointment by a successor trustee
regarding one or more series of debt securities and to add to or
change any of the provisions of the indenture as is necessary to
provide for the administration of the trusts by more than one trustee;
. to comply with the requirements of the Securities and Exchange
Commission in connection with qualification of the indenture under the
Trust Indenture Act;
. to cure any ambiguity;
. to correct or supplement any provision in the indenture which may be
defective or inconsistent with any other provision in the indenture;
. to eliminate any conflict between the terms of the indenture and the
debt securities and the Trust Indenture Act; and
. to make any other provisions with respect to matters or questions
arising under the indenture which will not be inconsistent with any
provision of the indenture as long as the new provisions do not
adversely affect the interests of the holders of any outstanding debt
securities of any series created prior to the modification in any
material respect;
We may also modify the indenture for any other purpose if we receive
the written consent of the holders of not less than a majority in principal
amount of the outstanding debt securities of each series affected by such
modification voting separately. However, we may not, without the consent of the
holder of each outstanding debt security of each series affected:
. change the stated maturity or reduce the principal amount or the rate
of interest, or extend the time for payment of interest of any debt
security or any premium payable upon the redemption of any debt
security, or change the stated maturity of, or reduce the amount of
the principal of a discount security that would be due and payable
upon a declaration of acceleration of the maturity of a discount
security or impair the right to institute suit for the enforcement of
any payment on or after the due date thereof (including, in the case
of redemption, on or after the redemption date), or alter any
redemption provisions in a manner adverse to the holders of such
series of debt securities;
. reduce the percentage in principal amount of the outstanding debt
securities of a series where the consent of the holder is required for
any such amendment, supplemental indenture or waiver which is provided
for in the indenture;
. if applicable, adversely affect the right of a holder to convert any
debt security;
. modify any of the waiver provisions, except to increase any required
percentage or to provide that certain other provisions of the
indenture cannot be modified or waived
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without the consent of the holder of each outstanding debt security
which would be affected; or
. modify any provision described in the prospectus supplement as
requiring the consent of each affected holder of debt securities.
A modification which changes or eliminates any covenant or other
provision of the indenture with respect to one or more particular series of debt
securities, or which modifies the rights of the holders of debt securities of a
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under the indenture of the holders of debt securities of any
other series.
The indenture provides that the holders of not less than a majority in
aggregate principal amount of the then outstanding debt securities of any
series, by notice to the relevant trustee, may on behalf of the holders of the
debt securities of such series waive any default and its consequences under the
indenture, except (1) a continuing default in the payment of interest on,
premium, if any, or the principal of, any such debt security held by a
nonconsenting holder or (2) a default in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the holder of
each outstanding debt security of each series affected.
Defeasance of Debt Securities or Certain Covenants in Certain Circumstances
Defeasance and Discharge. The indenture provides that we may be
discharged from any and all obligations under the debt securities other than:
. certain obligations to pay additional amounts, if any, upon the
occurrence of certain tax, assessment or governmental charge events
regarding payments on debt securities;
. to register the transfer or exchange of debt securities;
. to replace stolen, lost or mutilated debt securities; or
. to maintain paying agencies and to hold money for payment in trust.
We may only defease and discharge all of our obligations under the
debt securities if:
. we irrevocably deposit with the trustee, in trust, the amount, as
certified by an officers' certificate, of money and/or U.S.
government obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will be
sufficient to pay and discharge each installment of principal and
premium, if any and interest on, and any mandatory sinking fund
payments in respect of, the debt securities on the dates such payments
are due; and
. we deliver to the trustee an opinion of counsel or a ruling from the
United States Internal Revenue Service, in either case to the effect
that holders of the debt securities will not recognize income, gain or
loss for United States federal income tax purposes as a result of such
deposit, defeasance and discharge.
Defeasance of Certain Covenants. Upon compliance with certain
conditions, we may omit to comply with certain restrictive covenants contained
in the indenture or in the applicable prospectus supplement or any other
restrictive covenant relating to any series of debt securities provided for in a
board resolution or supplemental indenture which by its terms may be defeased
pursuant to the terms of such series of debt securities. Any omission to comply
with our obligations or covenants shall not constitute a default or event of
default with respect to any debt securities. In that event, you would lose the
protection of these covenants, but would gain the protection of having money
and/or U.S. government obligations set aside in trust to repay the series of
debt securities. We may only defease any covenants if, among other
requirements:
. we deposit with the trustee money and/or U.S. government obligations
that, through the
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payment of interest and principal in respect to such obligations, in
accordance with their terms, will provide money in an amount, as
certified by an officers' certificate, sufficient to pay principal,
premium, if any, and interest on and any mandatory sinking fund
payments in respect of the debt securities on the dates such payments
are due; and
. we deliver to the trustee an opinion of counsel or a ruling from the
United States Internal Revenue Service to the effect that the holders
of the debt securities will not recognize income, gain or loss, for
United States federal income tax purposes, as a result of the covenant
defeasance.
Limited Liability of Certain Persons
The indenture provides that none of our past, present or future
stockholders, incorporators, employees, officers or directors, or of any
successor corporation or any of our affiliates shall have any personal liability
in respect of our obligations under the indenture or the debt securities by
reason of his, her or its status as such stockholder, incorporator, employee,
officer or director.
Conversion Rights
The terms and conditions, if any, upon which the debt securities are
convertible into common stock or other securities or property will be set forth
in the applicable prospectus supplement. Such terms will include the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at our option or at the option of the holders, the
events requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such debt securities.
Guarantee
The indenture provides that one or more of our subsidiaries may be a
guarantor and may "guarantee" the performance and punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all of our
obligations under the debt securities of any series and the indenture. The
liability of the guarantors will be independent of and not in consideration of
or contingent upon our liability or any other party obligated under the debt
securities or the indenture. A separate action or actions may be brought or
prosecuted against us or any other party obligated under the debt securities or
the indenture whether or not we or any other party obligated under the debt
securities or the indenture are joined in any such action or actions. However,
any guarantee will be limited to an amount not to exceed the maximum amount that
can be guaranteed by the guarantor without rendering the guarantee, as it
relates to such each guarantor, original issue discountable under Section 548 of
the Federal Bankruptcy Code or any applicable provision of comparable state law.
This guarantee is a continuing guarantee and will remain in full force and
effect until payment in full of all of the guaranteed obligations.
Payment and Paying Agents
We covenant and agree, for the benefit of each series of debt
securities, that we will duly and punctually pay the principal of, premium, if
any, and interest on the debt securities in accordance with the terms of the
debt securities and the indenture. We will maintain an office or agency where
debt securities of that series may be presented or surrendered for payment,
where debt securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon us in respect of
the debt securities of that series and the indenture may be served.
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Global Securities
The debt securities of any series may be issued in whole or in part in
the form of one or more global securities that will be deposited with, or on
behalf of, a depositary identified in the applicable prospectus supplement
relating to such series. Global securities will be in registered form and may
be issued in either temporary or permanent form. The specific terms of the
depositary arrangement regarding a series of debt securities will be described
in the applicable prospectus supplement relating to such series.
DESCRIPTION OF COMMON STOCK
Our authorized common stock consists of 500,000,000 shares of common stock.
All authorized shares of common stock have a par value of $0.01 per share and
are entitled to one vote per share on all matters submitted to a vote of
stockholders. In the event of a liquidation, dissolution or winding up of the
company, the holders of the common stock are entitled to share ratably in all
assets remaining after all liabilities and the liquidation preference
attributable to any outstanding preferred stock have been paid. The holders of
the common stock have no pre-emptive rights or cumulative voting rights and no
rights to convert their common stock into any other securities.
As of March 31, 2000, there were outstanding 201,557,214 shares of the
common stock. As of March 31, 2000, there were reserved for issuance upon the
exercise of options 30,156,251 shares of the common stock, of which options for
23,868,274 shares are outstanding, 8,265,007 of which are vested and exercisable
or will become vested and exercisable within 60 days.
The transfer agent and registrar for our common stock is ChaseMellon
Shareholder Services, LLC, 400 S. Hope Street, Los Angeles, California 90071.
PLAN OF DISTRIBUTION
We may sell the securities being offered hereby:
.directly to one or more purchasers;
.through agents;
.to or through one or more dealers;
.to or through one or more underwriters; or
.through a combination of any such methods of sales.
The distribution of such securities pursuant to any prospectus supplement
may occur from time to time in one or more transactions either:
.at a fixed price or prices which may be changed;
.at market prices prevailing at the time of sale;
.at prices related to such prevailing market prices; or
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. at negotiated prices.
We may enter into a standby arrangement with the Tracinda Group pursuant to
which the Tracinda Group would agree to buy securities not purchased by the
public in an offering made pursuant hereto.
Offers to purchase the securities being offered hereby may be solicited
directly by us or by agents designated by us from time to time. Any such agent,
who may be deemed to be our "underwriter" as that term is defined in the
Securities Act, involved in the offer or sale of such securities will be named,
and any commissions payable by us to such agent will be set forth, in the
applicable prospectus supplement.
If a dealer is utilized in the sale of such securities, we will sell such
securities to the dealer, as principal. The dealer, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, may then resell
such securities to the public at varying prices to be determined by such dealer
at the time of resale.
If an underwriter is, or underwriters are, utilized in the sale, we will
execute an underwriting agreement with such underwriters at the time of sale to
them and the names of the underwriters will be set forth in the applicable
prospectus supplement, which will be used by the underwriters to make resales of
such shares to the public. In connection with the sale of such securities, such
underwriters may be deemed to have received compensation from us in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of such securities for whom they may act as agents. Underwriters may
sell such shares to or though dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agents. Any
underwriting compensation paid by us to underwriters in connection with the
offering of such securities, and any discounts, concessions or commissions
allowed by underwriters to participating dealers, will be set forth in the
applicable prospectus supplement.
Underwriters, dealers, agents, dealer managers, and other persons,
including the Tracinda group, may be entitled, under agreements that may be
entered into with us, to indemnification by us against certain civil
liabilities, including the liabilities under the Securities Act, or to
contribution with respect to payments which they may be required to make in
respect thereof. Underwriters, dealers, dealer managers and agents may engage
in transactions with, or perform services for us in the ordinary course of
business.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers, dealer managers, or other persons to solicit offers by
certain institutions to purchase from us securities offered hereby pursuant to
contracts providing for payment and delivery on a future date or dates set forth
in the applicable prospectus supplement. Institutions with which such contacts
may be made may include, but are not limited to, commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others. The obligations of any purchaser under any
such contract will not be subject to any conditions except that (a) the purchase
of such securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject and (b) if such
securities are also being sold to underwriters, we shall have sold to such
underwriters the securities offered hereby which are not sold for delayed
delivery. The
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underwriters, dealers, dealer managers and such other persons will not have any
responsibility in respect to the validity or performance of such contracts. The
prospectus supplement relating to such contracts will set forth the price to be
paid for such securities pursuant to such contracts, the commissions payable for
solicitation of such contracts and the date or dates in the future for delivery
of such shares pursuant to such contracts.
The anticipated date of delivery of securities offered hereby will be set
forth in the applicable prospectus supplement relating to each offer.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for us by, Christensen, Miller, Fink, Jacobs, Glaser, Weil &
Shapiro, LLP, Los Angeles, California.
EXPERTS
Our consolidated financial statements and schedules for the years ended
December 31, 1999, 1998 and 1997 incorporated by reference into this prospectus
and elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC, in accordance with the Securities Exchange Act of
1934. You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available to the public from the SEC's web site
at: http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them, which means that we can disclose important
information to you by referring to our filed SEC documents. The information
incorporated by reference is considered to be part of this prospectus.
Information we file with the SEC after the date of this document will update and
supersede the information in this prospectus. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until this
offering is completed:
(1) Our Annual Report on Form 10-K for the year ended December 31, 1999;
and
(2) The description of capital stock contained in Item 1 of our
Registration Statement on Form 8-A, filed with the SEC on October 14,
1997, as amended.
We have also filed a Registration Statement on Form S-3 with the SEC for
the securities offered by this prospectus. This prospectus does not contain all
of the information set forth in the registration statement. You should read the
registration statement for further information about our common stock and us.
The registration statement can be found in the SEC's public reference room or on
the SEC's website referred to above, and you may request a copy of any of these
filings, at no cost, by writing or calling William A. Jones, Senior Executive
Vice President and Secretary of the company, at:
21
<PAGE>
Metro-Goldwyn-Mayer Inc.
2500 Broadway Street
Santa Monica, California 90404
(310) 449-3000
You can find additional information by visiting our website at:
http://www.mgm.com.
22
<PAGE>
[Back Cover Logo]
<PAGE>
PART II
Information Not Required In Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution of
the securities being registered hereby are as follows are as follows:
<TABLE>
<CAPTION>
Expenses Amount
-------- ------
<S> <C>
SEC Registration Fee ................................ $ 198,000
NYSE Fee ............................................ 150,000
Printing Expenses ................................... 150,000
Legal Fees and Expenses ............................. 300,000
Trustee Fees......................................... 75,000
Transfer Agent and Registrar Fees ................... 100,000
Accounting Fees and Expenses ........................ 100,000
Blue Sky Fees and Expenses .......................... 3,000
Miscellaneous Expenses .............................. 424,000
----------
TOTAL ........................................... $1,400,000
==========
- --------------------
</TABLE>
Item 15. Indemnification of Officers and Directors.
As permitted by applicable provisions of the Delaware General Corporation
Law (the "DGCL"), the Registrant's Amended and Restated Certificate of
Incorporation contains a provision whereunder the Registrant will indemnify each
of the officers and directors of the Registrant (or their estates, if
applicable), and may indemnify any employee or agent of the Registrant (or their
estates, if applicable), to the fullest extent permitted by the DGCL as it
exists or may in the future be amended.
In addition, the Registrant has entered into indemnification agreements
with its directors, its executive officers and certain other officers providing
for indemnification by the Registrant, including under circumstances in which
indemnification is otherwise discretionary under Delaware law. These agreements
constitute binding agreements between the Registrant and each of the other
parties thereto, thus preventing the Registrant from modifying its
indemnification policy in a way that is adverse to any person who is a party to
such an agreement.
The Registrant currently maintains insurance on behalf of its officers and
directors against certain liabilities that may be asserted against any such
officer or director in his or her capacity as such, subject to certain customary
exclusions. The amount of such insurance is deemed by the Board of Directors to
be adequate to cover such liabilities.
Item 16. Exhibits.
See Exhibit Index attached hereto on page II-5 and incorporated herein by
reference.
II-1
<PAGE>
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
infor5mation set forth in the Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) of this section do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes, that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report on Form 10-K pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registration hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Act.
(d) Insofar as indemnification for liabilities arising out of the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense in any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the
II-2
<PAGE>
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act will be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus will
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be deemed to be
the initial bona fide offering thereof.
(3) For purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
Signatures and Power of Attorney
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Monica, California, on April 28, 2000.
METRO-GOLDWYN-MAYER INC.
By: /s/ Alex Yemenidjian
-------------------------------
Alex Yemenidjian
Chairman of the Board of Directors
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints William A. Jones, Daniel J. Taylor and
Robert Brada their true and lawful attorneys-in-fact and agents, each with full
power and substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and any additional Registration Statements pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitution or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Alex Yemenidjian Chairman of the Board of Directors and April 28, 2000
- ------------------------- Chief Executive Officer (Principal
Alex Yemenidjian Executive Officer)
/s/ Christopher J. McGurk Vice Chairman, Chief Operating Officer April 28, 2000
- ------------------------- and Director
Christopher J. McGurk
/s/ Daniel J. Taylor Chief Financial Officer (Principal April 28, 2000
- ------------------------- Financial and Accounting Officer)
Daniel J. Taylor
/s/ James D. Aljian Director April 28, 2000
- -------------------------
James D. Aljian
</TABLE>
II-4
<PAGE>
____________________ Director April __, 2000
Francis Ford Coppola
_____________________ Director April __, 2000
Willie D. Davis
_____________________ Director April __, 2000
Alexander M. Haig, Jr.
/s/ Kirk Kerkorian
_____________________ Director April 28, 2000
Kirk Kerkorian
_____________________ Director April __, 2000
Frank G. Mancuso
/s/ Jerome B. York
_____________________ Director April 28, 2000
Jerome B. York
II-5
<PAGE>
Exhibit Index
*1 Form of underwriting agreement
4 Form of indenture, including form of debt securities
*5 Opinion of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP
*8 Opinion re tax matters
12 Computation of ratio of earnings to fixed charges
23.1 Consent of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP
(set forth as part of Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
24 Power of attorney (see signature pages)
**25 Statement of eligibility of trustee on Form T-1
_______________________
* To be filed by amendment or as an exhibit to a document to be incorporated
by reference herein in connection with the offered securities.
** To be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of
1939, as amended.
II-6
<PAGE>
EXHIBIT 4
INDENTURE
between
METRO-GOLDWYN-MAYER, INC.
and
_________________________, as Trustee
Dated as of ______________, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........ 1
Section 1.1 DEFINITIONS.............................................. 1
Section 1.2 COMPLIANCE CERTIFICATES AND OPINIONS..................... 8
Section 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE................... 9
ARTICLE 2 DEBT SECURITY FORMS............................................ 9
Section 2.1 FORMS GENERALLY.......................................... 9
Section 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.......... 10
Section 2.3 SECURITIES IN GLOBAL FORM................................ 10
ARTICLE 3 THE DEBT SECURITIES............................................ 11
Section 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES..................... 11
Section 3.2 DENOMINATIONS............................................ 14
Section 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING........... 14
Section 3.4 TEMPORARY DEBT SECURITIES; EXCHANGE OF TEMPORARY
GLOBAL NOTES FOR DEFINITIVE DEBT SECURITIES; GLOBAL
NOTES REPRESENTING DEBT SECURITIES....................... 15
Section 3.5 REGISTRATION, TRANSFER AND EXCHANGE...................... 17
Section 3.6 MUTILATED, DESTROYED, LOST AND STOLEN DEBT SECURITIES.... 18
Section 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED........... 18
Section 3.8 CANCELLATION............................................. 19
Section 3.9 COMPUTATION OF INTEREST.................................. 20
ARTICLE 4 SATISFACTION AND DISCHARGE..................................... 20
Section 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.................. 20
Section 4.2 APPLICATION OF TRUST MONEY............................... 22
ARTICLE 5 REMEDIES....................................................... 22
Section 5.1 EVENTS OF DEFAULT........................................ 22
Section 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....... 23
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE............................................... 24
Section 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM......................... 24
Section 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
DEBTSECURITIES........................................... 25
Section 5.6 APPLICATION OF MONEY COLLECTED........................... 25
Section 5.7 LIMITATION ON SUITS...................................... 26
Section 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST..................................... 26
Section 5.9 RESTORATION OF RIGHTS AND REMEDIES....................... 26
Section 5.10 RIGHTS AND REMEDIES CUMULATIVE........................... 27
Section 5.11 DELAY OR OMISSION NOT WAIVER............................. 27
Section 5.12 CONTROL BY HOLDERS....................................... 27
Section 5.13 WAIVER OF PAST DEFAULTS.................................. 27
Section 5.14 UNDERTAKING FOR COSTS.................................... 28
Section 5.15 WAIVER OF STAY OR EXTENSION LAWS......................... 28
ARTICLE 6 THE TRUSTEE.................................................... 28
Section 6.1 CERTAIN DUTIES AND RESPONSIBILITIES...................... 28
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 6.2 NOTICE OF DEFAULTS....................................... 29
Section 6.3 CERTAIN RIGHTS OF TRUSTEE................................ 30
Section 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBT
SECURITIES............................................... 31
Section 6.5 MAY HOLD DEBT SECURITIES................................. 31
Section 6.6 MONEY HELD IN TRUST...................................... 31
Section 6.7 COMPENSATION AND REIMBURSEMENT........................... 31
Section 6.8 DISQUALIFICATION; CONFLICTING INTERESTS.................. 32
Section 6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.................. 33
Section 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR........ 33
Section 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR................... 35
Section 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS................................................. 36
Section 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY........ 36
Section 6.14 APPOINTMENT OF AUTHENTICATING AGENT...................... 37
ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.............. 38
Section 7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS.................................................. 38
Section 7.2 PRESERVATION OF INFORMATION; COMMUNICATION TO HOLDERS.... 39
Section 7.3 REPORTS BY TRUSTEE....................................... 40
Section 7.4 REPORTS BY COMPANY....................................... 42
ARTICLE 8 CONCERNING THE HOLDERS......................................... 42
Section 8.1 ACTS OF HOLDERS.......................................... 42
Section 8.2 PROOF OF OWNERSHIP; PROOF OF EXECUTION OF INSTRUMENTS BY
HOLDER................................................... 42
Section 8.3 PERSONS DEEMED OWNERS.................................... 43
Section 8.4 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND............. 43
ARTICLE 9 HOLDERS' MEETINGS.............................................. 43
Section 9.1 PURPOSES OF MEETINGS..................................... 43
Section 9.2 CALL OF MEETINGS BY TRUSTEE.............................. 44
Section 9.3 CALL OF MEETINGS BY COMPANY OR HOLDERS................... 44
Section 9.4 QUALIFICATIONS FOR VOTING................................ 44
Section 9.5 REGULATIONS.............................................. 44
Section 9.6 VOTING................................................... 45
Section 9.7 NO DELAY OF RIGHTS BY MEETING............................ 45
ARTICLE 10 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.......... 46
Section 10.1 COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS...... 46
Section 10.2 SUCCESSOR CORPORATION SUBSTITUTED........................ 46
ARTICLE 11 SUPPLEMENTAL INDENTURES....................................... 46
Section 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.................................................. 46
Section 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.......... 47
Section 11.3 EXECUTION OF SUPPLEMENTAL INDENTURES..................... 48
Section 11.4 EFFECT OF SUPPLEMENTAL INDENTURES........................ 48
Section 11.5 CONFORMITY WITH TRUST INDENTURE ACT...................... 49
Section 11.6 REFERENCE IN DEBT SECURITIES TO SUPPLEMENTAL
INDENTURES............................................... 49
ARTICLE 12 COVENANTS..................................................... 49
Section 12.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST............... 49
Section 12.2 OFFICER'S CERTIFICATE AS TO COMPLIANCE................... 49
Section 12.3 MAINTENANCE OF OFFICE OR AGENCY.......................... 49
Section 12.4 MONEY FOR DEBT SECURITIES; PAYMENTS TO BE HELD IN TRUST.. 50
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 12.5 CORPORATE EXISTENCE...................................... 51
Section 12.6 WAIVER OF CERTAIN COVENANTS.............................. 51
ARTICLE 13 REDEMPTION OF DEBT SECURITIES................................. 51
Section 13.1 APPLICABILITY OF ARTICLE................................. 52
Section 13.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.................... 52
Section 13.3 SELECTION BY TRUSTEE OF DEBT SECURITIES TO BE REDEEMED... 52
Section 13.4 NOTICE OF REDEMPTION..................................... 52
Section 13.5 DEPOSIT OF REDEMPTION PRICE.............................. 53
Section 13.6 DEBT SECURITIES PAYABLE ON REDEMPTION DATE............... 53
Section 13.7 DEBT SECURITIES REDEEMED IN PART......................... 54
ARTICLE 14 SINKING FUNDS................................................. 54
Section 14.1 APPLICABILITY OF ARTICLE................................. 54
Section 14.2 SATISFACTION OF MANDATORY SINKING FUND PAYMENTS WITH
DEBT SECURITIES.......................................... 54
Section 14.3 REDEMPTION OF DEBT SECURITIES FOR SINKING FUND........... 55
ARTICLE 15 DEFEASANCE.................................................... 56
Section 15.1 APPLICABILITY OF ARTICLE................................. 56
Section 15.2 DEFEASANCE UPON DEPOSITS OF MONEYS OR U.S. GOVERNMENT
OBLIGATIONS.............................................. 56
Section 15.3 DEPOSITED MONEYS AND U.S. GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST......................................... 57
Section 15.4 REPAYMENT TO COMPANY..................................... 57
ARTICLE 16 CONVERSION.................................................... 58
Section 16.1 APPLICABILITY; CONVERSION PRIVILEGE...................... 58
Section 16.2 CONVERSION PROCEDURE; CONVERSION PRICE; FRACTIONAL
SHARES................................................... 58
Section 16.3 ADJUSTMENT OF CONVERSION PRICE FOR COMMON STOCK.......... 59
Section 16.4 CONSOLIDATION OR MERGER OF THE COMPANY................... 61
Section 16.5 NOTICE OF ADJUSTMENT..................................... 62
Section 16.6 NOTICE IN CERTAIN EVENTS................................. 62
Section 16.7 COMPANY TO RESERVE STOCK; REGISTRATION; LISTING.......... 63
Section 16.8 TAXES ON CONVERSION...................................... 63
Section 16.9 CONVERSION AFTER RECORD DATE............................. 63
Section 16.10 COMPANY DETERMINATION FINAL.............................. 64
Section 16.11 TRUSTEE'S DISCLAIMER..................................... 64
ARTICLE 17 MISCELLANEOUS................................................. 70
Section 17.1 NOTICES, ETC., TO TRUSTEE AND COMPANY.................... 70
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 17.2 NOTICE TO HOLDERS; WAIVER................................ 70
Section 17.3 CONFLICT WITH TRUST INDENTURE ACT........................ 71
Section 17.4 COUNTERPARTS; EFFECT OF HEADINGS AND TABLE OF CONTENTS... 71
Section 17.5 SUCCESSORS AND ASSIGNS................................... 71
Section 17.6 SEPARABILITY CLAUSE...................................... 71
Section 17.7 BENEFITS OF INDENTURE.................................... 71
Section 17.8 GOVERNING LAW............................................ 71
Section 17.9 LEGAL HOLIDAYS........................................... 72
Section 17.10 NO RECOURSE AGAINST OTHERS............................... 72
</TABLE>
5
<PAGE>
Reconciliation between Trust Indenture Act of 1939
and Indenture, dated as of _________ __, 2000
-------------------------------
Trust Indenture
Act Section Indenture Section
Section 310
(a)(1) . . . . . . . . . . . . . . . 6.09
(a)(2) . . . . . . . . . . . . . . . 6.09
(a)(3) . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . Not Applicable
(a)(5) . . . . . . . . . . . . . . . 6.09
(b). . . . . . . . . . . . . . . . . 6.08, 6.10
(c). . . . . . . . . . . . . . . . . Not Applicable
Section 311
(a). . . . . . . . . . . . . . . . . 6.13(a)
(b). . . . . . . . . . . . . . . . . 6.13(b)
(c). . . . . . . . . . . . . . . . . Not Applicable
Section 312
(a). . . . . . . . . . . . . . . . . 7.01, 7.02(a)
(b). . . . . . . . . . . . . . . . . 7.02(b)
(c). . . . . . . . . . . . . . . . . 7.02(c)
Section 313
(a). . . . . . . . . . . . . . . . . 7.03(a)
(b). . . . . . . . . . . . . . . . . 7.03(b)
(c). . . . . . . . . . . . . . . . . 7.03(a), 7.03(c)
(d). . . . . . . . . . . . . . . . . 7.03(d)
Section 314
(a). . . . . . . . . . . . . . . . . 7.04, 12.02
(b). . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . 1.02
(c)(2) . . . . . . . . . . . . . . . 1.02
(c)(3) . . . . . . . . . . . . . . . Not Applicable
(d). . . . . . . . . . . . . . . . . Not Applicable
(e). . . . . . . . . . . . . . . . . 1.02
Section 315
(a). . . . . . . . . . . . . . . . . 6.01(a), 6.01(c)
(b). . . . . . . . . . . . . . . . . 6.02, 7.03(a)(7)
(c). . . . . . . . . . . . . . . . . 6.01(b)
(d)(1) . . . . . . . . . . . . . . . 6.01(a)
(d)(2) . . . . . . . . . . . . . . . 6.01(c)(2)
(d)(3) . . . . . . . . . . . . . . . 6.01(c)(3)
(e). . . . . . . . . . . . . . . . . 5.14
Section 316
(a)(1)(A). . . . . . . . . . . . . . 5.02, 5.12
(a)(1)(B). . . . . . . . . . . . . . 5.13
(a)(2) . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . 5.08
(c). . . . . . . . . . . . . . . . . Not Applicable
6
<PAGE>
Section 317
(a)(1) . . . . . . . . . . . . . . . 5.03
(a)(2) . . . . . . . . . . . . . . . 5.04
(b). . . . . . . . . . . . . . . . . 12.04
Section 318 . . . . . . . . . . . . 1.06
Note: This reconciliation shall not, for any purpose, be deemed to be a part of
the Indenture.
Attention should also be directed to Section 318(c) of the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), which provides that the
provisions of Sections 310 to and including 317 of the Trust Indenture Act are a
part of and govern every qualified indenture, whether or not physically
contained therein.
7
<PAGE>
INDENTURE dated as of _______ __, 2000, by and between METRO-GOLDWYN-MAYER
INC., a Delaware corporation (the "Company"), having its principal executive
office at 2500 Broadway Street, Santa Monica, California 90404, and
___________________ (together with any additional trustees to be added by
supplemental indenture pursuant to this Indenture, the "Trustee"), having its
Corporate Trust Office at _____________________.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness (the "Debt Securities"), to be
issued in one or more series, as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, that are deemed incorporated into this Indenture and shall, to
the extent applicable, be governed by such provisions.
All things necessary have been done to make this Indenture a valid
agreement of the Company, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of Debt
Securities by the holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all holders of Debt Securities or of Debt
Securities of any series, as applicable, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 DEFINITIONS; INTERPRETATION.
- -----------------------------------------
For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles or
as provided with respect to any series of Debt Securities, and, except as
otherwise herein provided or as provided with respect to any series of Debt
Securities, the term "generally accepted accounting principles" or "GAAP" with
respect to any computation required or permitted hereunder with respect to any
series of Debt Securities, shall mean such as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a
8
<PAGE>
significant segment of the accounting profession which are in effect as of the
date of determination;
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
(e) certain terms, used principally in Article Three or Article Six, are
defined in those respective Articles;
(f) "or" is not exclusive and "including" is not limiting;
(g) references in this Indenture to any agreement, other document or law "as
amended" or "as amended from time to time," or to "amendments" of any document
or law, shall include any amendments, supplements, replacements, renewals or
other modifications from time to time, provided in the case of modifications to
documents, such modifications are permissible hereunder;
(h) references in this Indenture to any law include regulations promulgated
thereunder from time to time;
(i) The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof; and
(j) The term "Act" when used with respect to any holder, has the meaning
specified in Section 8.1.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,
"controlled by" and "under common control with") as used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
agreement or otherwise.
"Authenticating Agent" has the meaning specified in Section 6.14.
"Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day in such city.
"Bankruptcy Code" means 11 U.S.C. (S)101 et seq., as amended from time to
time. ------
"Board of Directors" means either the board of directors of the Company or any
committee of that board or any other committee of the Company, duly authorized
by the board of directors of the Company to act hereunder.
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"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Debt Securities
means any day which is not a Saturday, a Sunday or a legal holiday or a day on
which banking institutions or trust companies in that Place of Payment or other
location are authorized or obligated by law to close, except as otherwise
specified pursuant to Section 3.1.
"Closing Price" of the Common Stock shall mean the last reported sale price of
such stock (regular way) as shown on the Composite Tape of the New York Stock
Exchange Inc. or, in case no such sale takes place on such day, the average of
the closing bid and asked prices on the New York Stock Exchange, or if the
Common Stock is not then listed on the New York Stock Exchange on the principal
exchange (or NASDAQ--National Market System) on which the Common Stock is
listed.
"Code" means the Internal Revenue Code of 1986, as amended.
"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 of this instrument 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 Depositary" has the meaning specified in Section 3.4(b).
"Common Stock" shall mean the class of Common Stock, par value $0.01 per
share, of the Company authorized at the date of this Indenture as originally
signed, or any other class of stock resulting from successive changes or
reclassifications of such Common Stock, and in any such case including any
shares thereof authorized after the date of this Indenture, and any other shares
of stock of the Company which do not have any priority in the payment of
dividends or upon liquidation over any other class of stock.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" and "Company Order" mean, respectively, a written request or
order signed in the name of the Company by the Chairman of the Board of
Directors, the President or an Executive or Senior Vice President and by the
Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Conversion Agent" means any Person authorized by the Company to receive Debt
Securities to be converted into Common Stock on behalf of the Company. The
Company initially authorizes the Trustee to act as Conversion Agent for the Debt
Securities on its behalf. The Company may at any time or from time to time
authorize one or more Persons to act as Conversion Agent in addition to or in
place of the Trustee with respect to any series of Debt Securities issued under
this Indenture.
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"Conversion Price" means, with respect to any series of Debt Securities which
are convertible into Common Stock, the price per share of Common Stock at which
the Debt Securities of such series are so convertible pursuant to Section 3.1
with respect to such series, as the same may be adjusted from time to time
in accordance with Section 16.3.
"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 instrument is
located at ________________________ ______________
"corporation" means a corporation, association, company or business trust.
"covenant defeasance option" has the meaning specified in Section 15.2.
"Current Market Price" on any date shall mean the average of the daily Closing
Prices per share of Common Stock for any thirty (30) consecutive Trading Days
selected by the Company prior to the date in question, which thirty (30)
consecutive Trading Day period shall not commence more than forty-five (45)
Trading Days prior to the day in question; provided that with respect to Section
16.3(c), the "Current Market Price" of the Common Stock shall mean the average
of the daily Closing Prices per share of Common Stock for the five (5)
consecutive Trading Days ending on the date of the distribution referred to in
Section 16.3(c) (or if such date shall not be a Trading Day, on the Trading Day
immediately preceding such date).
"Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities (including any Global
Note) authenticated and delivered under this Indenture; provided, however, that,
if at any time there is more than one Person acting as Trustee under this
Indenture, "Debt Securities" with respect to the Indenture as to which such
Person is Trustee shall have the meaning stated in the first recital of this
Indenture and shall more particularly mean Debt Securities authenticated and
delivered under this Indenture, exclusive, however, of Debt Securities of any
series as to which such Person is not Trustee.
"Default" means any event that after notice or lapse of time, or both, would
become an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7(b).
"Discharged" has the meaning specified in Section 15.2.
"Discount Security" means any Debt Security which is issued with "original
issue discount" within the meaning of Section 1273(a) of the Code (or any
successor provision) and the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States that, at 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.
"Floating Rate Security" means a Debt Security which provides for the payment
of interest at a variable rate determined periodically by
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reference to an interest rate index or any other index specified pursuant to
Section 3.1.
"Global Note" means a registered Debt Security evidencing all or part of a
series of Debt Securities, including, without limitation, any temporary or
permanent Global Note.
"Indenture" means this instrument as originally executed, or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and, unless the
context otherwise requires, shall include the terms of a particular series of
Debt Securities as established pursuant to Section 3.1; provided, however, that,
if at any time more than one Person is acting as Trustee under this instrument,
"Indenture" shall mean, with respect to any one or more series of Debt
Securities for which such Person is Trustee, this instrument as originally
executed or as it may be supplemented or amended from time to time by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of the, or those, particular
series of Debt Securities for which such Person is Trustee established as
contemplated by Section 3.1, exclusive, however, of any provisions or terms
which relate solely to other series of Debt Securities for which such Person is
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"interest" when used with respect to a Discount Security which by its terms
bears interest only on a certain date, means interest payable after such date.
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"Interest Payment Date" with respect to any Debt Security means the Stated
Maturity of an installment of interest on such Debt Security.
"Joint Venture" means any partnership, corporation or other entity, in which
up to and including 50% of the partnership interests, outstanding voting stock
or other equity interests is owned, directly or indirectly, by the Company
and/or one or more subsidiaries.
"mandatory sinking fund payment" has the meaning specified in Section 14.1.
"Maturity" when used with respect to any Debt Security means the date on which
the principal of such Debt Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, repayment or repurchase at the
option of the holder thereof or otherwise.
"Obligor" means the Company or any successor corporation.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, the President or an Executive or Senior Vice President and
by the Treasurer, an Assistant Treasurer, the Controller, an Assistant
Controller, the Secretary or an Assistant Secretary of the Company and delivered
to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel to
the Company (including an employee of the Company).
"Optional sinking fund payment" has the meaning specified in Section 14.1.
"Outstanding" when used with respect to Debt Securities, means, as of the date
of determination, all Debt Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Debt Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Debt Securities for whose payment or redemption (including
repayment at the option of the holder) money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the holders of such Debt
Securities; provided, however, that if such Debt Securities are to be redeemed,
then notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made and the date for
such redemption has passed;
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(iii) Debt Securities, except to the extent provided in Section 15.2, with
respect to which the Company has effected defeasance as provided in Article
Fifteen;
(iv) Debt Securities which have been issued pursuant to Section 3.6 or in
exchange for or in lieu of which other Debt Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Debt Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Debt Securities are held by a bona fide purchaser
in whose hands such Debt Securities are valid obligations of the Company; and
(v) Debt Securities converted into Common Stock pursuant to or in accordance
with this Indenture;
Provided, however, that in determining whether the holders of the requisite
principal amount of Debt Securities Outstanding have performed any Act
hereunder, Debt Securities owned by the Company or any other obligor upon the
Debt Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding (provided, that in connection
with any offer by the Company or any obligor to purchase Debt Securities, Debt
Securities rendered by a holder shall be Outstanding until the date of
purchase), except that, in determining whether the Trustee shall be protected in
relying upon any such Act, only Debt Securities which the Trustee knows to be so
owned shall be so disregarded. Debt Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right to act with respect to such Debt
Securities and that the pledgee is not the Company or any other obligor upon the
Debt Securities or any Affiliate of the Company or of such other obligor. In
determining whether the holders of the requisite principal amount of Outstanding
Debt Securities have performed any Act hereunder, the principal amount of a
Discount Security that shall be deemed to be Outstanding for such purpose shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2.
"Overdue Rate" when used with respect to any series of the Debt Securities,
means the rate designated as such in or pursuant to the Board Resolution or the
supplemental indenture, as the case may be, relating to such series as
contemplated by Section 3.1.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on behalf
of the Company.
"permanent Global Note" shall have the meaning given such term in Section
3.4(b).
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof or any other entity.
"Place of Payment" when used with respect to the Debt Securities of any series
means the place or places where the principal of (and premium, if any) and
interest on the Debt Securities of that series are payable as specified pursuant
to Section 3.1.
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"Predecessor Security" of any particular Debt Security means every previous
Debt Security evidencing all or a portion of the same debt as that evidenced by
such particular Debt Security; and, for the purposes of this definition, any
Debt Security authenticated and delivered under Section 3.6 in lieu of a
mutilated, lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Debt Security.
"principal" includes, with respect to Debt Securities of any series,
principal payable upon redemption or repurchase of Debt Securities of such
series.
"Redemption Date" means the date fixed for redemption of any Debt Security
pursuant to this Indenture.
"Redemption Price" means, in the case of a Discount Security, the amount of
the principal thereof that would be due and payable as of the Redemption Date
upon a declaration of acceleration pursuant to Section 5.2, and in the case of
any other Debt Security, the principal amount thereof, plus, in each case,
premium, if any, and accrued and unpaid interest, if any, to the Redemption
Date.
"Regular Record Date" for the interest payable on the Debt Securities of any
series on any Interest Payment Date means the date specified for the purpose
pursuant to Section 3.1 for such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means any vice
president, the secretary, any assistant secretary or any assistant vice
president or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5(a).
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.7(b).
"Stated Maturity" when used with respect to any Debt Security or any
installment of principal thereof or premium thereon or interest thereon means
the date specified in such Debt Security representing such installment of
interest, as the date on which the principal of such Debt Security or such
installment of principal, premium or interest is due and payable.
"Subsidiary" means (i) a corporation a majority of whose capital stock with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company or (ii) any other Person, (other
than a corporation) in which the Company, directly or indirectly, has at least a
majority ownership interest.
"successor corporation" has the meaning specified in Section 10.1(a).
"temporary Global Note" has the meaning specified in Section 3.4(b).
"Trading Day" shall mean, with respect to the Common Stock, so long as the
Common Stock is listed or admitted to trading on the New York
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Stock Exchange, a day on which the New York Stock Exchange is open for the
transaction of business.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, then "Trustee" as used with respect to the Debt
Securities of any series shall mean the Trustee with respect to Debt Securities
of such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as it may be
amended from time to time.
"U.S. Depositary" means a clearing agency registered under the Securities
Exchange Act of 1934, as amended, or any successor thereto, which shall in
either case be designated by the Company pursuant to Section 3.1 until a
successor U.S. Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "U.S. Depositary" shall mean or
include each Person who is then a U.S. Depositary hereunder, and if at any time
there is more than one such Person, then "U.S. Depositary" as used with respect
to the Debt Securities of any series shall mean the U.S. Depositary with respect
to the Debt Securities of that series.
"U.S. Government Obligations" has the meaning specified in Section 15.2.
"Vice President" includes, with respect to the Company, any Executive or
Senior Vice President and includes, with respect to the Trustee, any Vice
President, whether or not designated by a number or word or words added before
or after the title "Vice President."
Section 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
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Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
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 request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than certificates provided
pursuant to Section 12.2) shall include:
(a) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to enable
that individual 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, in the opinion of each such individual, such
condition or covenant has been complied with. provided, however, that with
respect to matters of law, an Officers' Certificate may be based upon an Opinion
of Counsel, unless the signers know, or in the exercise of reasonable care
should know, that such Opinion of Counsel is erroneous, and provided, further,
that with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials, unless the signer
knows, or in the exercise of reasonable care should know, that any such document
is erroneous.
Section 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
- ----------------------------------------------------
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
ARTICLE 2
DEBT SECURITY FORMS
Section 2.1 FORMS GENERALLY.
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The Debt Securities of each series shall be substantially in the form of
Exhibit A hereto or in such other form as shall be established in or pursuant to
a Board Resolution or one or more indentures supplemental hereto, and shall have
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification or designation and such legends or endorsements
placed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Indenture, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which any series of the Debt Securities
may be listed, or to conform to usage, all as determined by the officers
executing such Debt Securities as conclusively evidenced by their execution such
Debt Securities. If the form of Debt Securities (or any Global Note) of any
series is established in or pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee, together with an Officers'
Certificate setting forth the form of such series, at or prior to the delivery
of the Company Order contemplated by Section 3.3 for the authentication and
delivery of such Debt Securities (or any such Global Note).
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Subject to Section 3.4, the definitive Debt Securities of each series shall be
printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Debt Securities, as conclusively
evidenced by their execution of such Debt Securities.
Section 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
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The form of the Trustee's certificate of authentication to be borne by the
Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the series of Debt Securities issued under the within
mentioned Indenture.
[NAME OF TRUSTEE], as Trustee
By: ____________________
Authorized Signatory
Section 2.3 SECURITIES IN GLOBAL FORM.
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If any Debt Security of a series is issued as a Global Note, such Global Note
may provide that it shall represent the aggregate amount of Outstanding Debt
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Debt Securities represented thereby may from
time to time be reduced to reflect exchanges. Any endorsement of a Global Note
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Debt Securities represented thereby shall be made by the Trustee and in such
manner as shall be specified in such Global Note. Any instructions by the
Company with respect to a Global Note, after its initial issuance, shall be in
writing but need not comply with Section 1.2.
Global Notes may be issued in either registered or bearer form and in either
temporary or permanent form. Permanent Global Notes will be issued in
definitive form.
Every Global Note authenticated and delivered hereunder shall bear a legend in
substantially the following form:
THIS DEBT SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS DEBT SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY DEBT SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN
EXCHANGE FOR OR IN LIEU OF, THIS DEBT SECURITY SHALL BE A GLOBAL NOTE SUBJECT TO
THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
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ARTICLE 3
THE DEBT SECURITIES
Section 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.
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The aggregate principal amount of Debt Securities which may be authenticated
and delivered under this Indenture is unlimited. The Debt Securities may be
issued in one or more series. There shall be established in or pursuant to a
Board Resolution and (subject to Section 3.3) set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Debt Securities of any series:
(a) The title of the Debt Securities of the series (which shall distinguish
the Debt Securities of such series from all other series of Debt Securities);
(b) The aggregate principal amount of such series of Debt Securities and any
limit on the aggregate principal amount of the Debt Securities of the series
which may be authenticated and delivered under this Indenture (except for Debt
Securities authenticated and delivered upon transfer of, or in exchange for, or
in lieu of, other Debt Securities of such series pursuant to Sections 3.4, 3.5,
3.6, 11.6 or 13.7);
(c) The percentage of the principal amount at which the Debt Securities of
such series will be issued and, if other than the principal amount thereof, the
portion of the principal amount thereof payable upon declaration of acceleration
of the maturity or upon redemption thereof or the method by which such portion
shall be determined;
(d) The date or dates on which, or periods during which, the Debt
Securities of the series may be issued, and the date or dates or the method by
which such date or dates will be determined, on which the principal of (and
premium, if any, on) the Debt Securities of such series are or may be payable
(which, if so provided in such Board Resolution or supplemental indenture, may
be determined by the Company from time to time as set forth in the Debt
Securities of the series issued from time to time);
(e) The rate or rates (which may be fixed or variable) at which the Debt
Securities of the series shall bear interest, if any, or the method by which
such rate or rates shall be determined, the date or dates from which such
interest, if any, shall accrue or the method by which such date or dates shall
be determined (which, in either case or both, if so provided in such Board
Resolution or supplemental indenture, may be determined by the Company from time
to time and set forth in the Debt Securities of the series issued from time to
time) and the circumstances, if any, in which the Company may defer interest
payments; and the Interest Payment Dates on which such interest shall be payable
(or the method of determination thereof), and the Regular Record Dates, if any,
for the interest payable on such Interest Payment Dates and the notice, if any,
to holders regarding the determination of interest, the manner of giving such
notice, the basis upon which interest shall be calculated if other than that of
a 360-day year of twelve 30-day months and any conditions or contingencies as to
the payment of interest in cash or otherwise, if any;
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(f) The place or places, if any, in addition to or instead of the Corporate
Trust Office of the applicable Trustee where the principal of (and premium, if
any) and interest on Debt Securities of the series shall be payable and where
such Debt Securities may be surrendered for conversion or registration of
transfer or exchange; the extent to which, or the manner in which, any interest
payable on any Global Note on an Interest Payment Date will be paid, if other
than in the manner provided in Section 3.7; the extent, if any, to which the
provisions of the last sentence of Section 12.1 shall apply to the Debt
Securities of the series; and the manner in which any principal of, or premium,
if any, on, any Global Note will be paid, if other than as set forth elsewhere
herein and whether any Global Note will require any notation to evidence payment
of principal or interest;
(g) The obligation, if any, of the Company to redeem, repay, purchase or offer
to purchase Debt Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or upon other conditions or at the option
of the holder thereof and the period or periods within which or the dates on
which, the prices at which and the terms and conditions upon which the Debt
Securities of the series shall be redeemed, repaid, purchased or offered to be
purchased, in whole or in part, pursuant to such obligation;
(h) The right, if any, of the Company to redeem the Debt Securities of such
series at its option and the period or periods within which, or the date or
dates on which, the price or prices at which, and the terms and conditions upon
which, such Debt Securities may be redeemed, if any, in whole or in part, at the
option of the Company or otherwise;
(i) The denominations of such Debt Securities if other than denominations of
$1,000 and any integral multiple thereof (except as provided in Section 3.4);
(j) Whether the Debt Securities of the series are to be issued as Discount
Securities and the amount of discount with which such Debt Securities may be
issued and, if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2;
(k) Additional provisions, if any, for the defeasance or discharge of certain
of the Company's obligations with respect to Debt Securities of the series,
which provisions may be in addition to, or in substitution for, or in
modification of (or any combination of the foregoing), the provisions of the
Indenture;
(l) Whether provisions for payment of additional amounts or tax redemptions
shall apply and, if such provisions shall apply, such provisions;
(m) The date as of which any Debt Securities of the series shall be dated, if
other than as set forth in Section 3.3;
(n) If the amount of payments of principal of (and premium, if any) orinterest
on the Debt Securities of the series may be determined with reference to an
index, including, but not limited to, an index based on a Currency or Currencies
other than that in which the Debt Securities are denominated or payable, or any
other type of index, the manner in which such amounts shall be determined;
(o) The applicable Overdue Rate, if any;
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(p) If the Debt Securities of the series do not bear interest, the
applicable dates for purposes of Section 7.1;
(q) Any addition to, or modification or deletion of, any Event of Default or
covenant provided for in this Indenture with respect to Debt Securities of the
series;
(r) Whether the Debt Securities of the series shall be issued in whole or in
part in the form of one or more Global Notes and, in such case, the U.S.
Depositary or any Common Depositary for such Global Note or Notes; and the
manner in which and the circumstances under which Global Notes representing Debt
Securities of the series may be exchanged for Debt Securities in definitive
form, if other than, or in addition to, the manner and circumstances specified
in Section 3.4(c);
(s) The designation, if any, of any depositaries, trustees (other than the
Trustee), Paying Agents, Authenticating Agents, Conversion Agents, Security
Registrars (other than the Trustee) or other agents with respect to the Debt
Securities of such series;
(t) If the Debt Securities of such series will be issuable in definitive form
only upon receipt of certain certificates or other documents or upon
satisfaction of certain conditions, the form and terms of such certificates,
documents or conditions;
(u) Whether the Debt Securities of such series will be convertible into shares
of Common Stock or other securities or property of the Company, and, if so, the
terms and conditions, which may be in addition to or in lieu of the provisions
contained in this Indenture, upon which such Debt Securities will be so
convertible, including the conversion price and the conversion period;
(v) The portion of the principal amount of the Debt Securities which will be
payable upon declaration of acceleration of the maturity thereof, if other than
the principal amount thereof;
(w) The terms, if any, on which the Debt Securities of such series will be
subordinate to other debt of the Company;
(x) Any listing or intended listing of the Debt Securities on a securities
exchange.
(y) The provisions, if any, relating to any security provided for the Debt
Securities of such series; and
(z) Any other terms of the series (which terms shall not be inconsistent with
the provisions of this Indenture).
All Debt 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 Board Resolution and (subject to Section 3.3) set forth in such Officers'
Certificate, or in any such indenture supplemental hereto. All Debt Securities
of any one series need not be issued at the same time, and unless otherwise
provided, a series may be reopened for issuance of additional Debt Securities of
such series.
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If any of the terms of a series of Debt Securities is established in or
pursuant to a Board Resolution, a copy of such Board Resolution shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.2 DENOMINATIONS.
- ---------------------------
In the absence of any specification pursuant to Section 3.1 with respect to
the Debt Securities of any series, the Debt Securities of such series shall be
issuable only as Debt Securities in denominations of $1,000 and any integral
multiple thereof and shall be payable only in Dollars.
Section 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
- ------------------------------------------------------------
The Debt Securities of any series shall be executed on behalf of the
Company by its Chairman of the Board of Directors, its President, one of its
Executive or Senior Vice Presidents or its Treasurer, under its corporate seal
reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers may be manual or facsimile.
Debt Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debt Securities or did
not hold such offices at the date of such Debt Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debt Securities of any series, executed by
the Company, to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Debt Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such Debt
Securities. If all the Debt Securities of any one series are not to be issued
at one time and if a Board Resolution or supplemental indenture relating to such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Debt Securities such as interest rate,
Stated Maturity, date of issuance and date from which interest, if any, shall
accrue. If any Debt Security shall be represented by a permanent Global Note,
then, for purposes of this Section and Section 3.4, the notation of a beneficial
owner's interest therein upon original issuance of such Debt Security or upon
exchange of a portion of a temporary Global Note shall be deemed to be delivery
in connection with the original issuance of such beneficial owner's interest in
such permanent Global Note.
The Trustee shall be entitled to receive, and (subject to Section 6.1) shall
be fully protected in relying upon, prior to the authentication and delivery of
the Debt Securities of such series, (i) the supplemental indenture or the Board
Resolution by or pursuant to which the form and terms of such Debt Securities
have been approved, (ii) an Officers' Certificate stating that all conditions
precedent provided for in the Indenture have been complied with and that, to the
best knowledge of the signers of such certificates, no Event of Default with
respect to any of the Debt Securities shall have occurred and be
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continuing and (iii) an Opinion of Counsel substantially to the effect that:
(a) the form and terms of such Debt Securities, have been established in
conformity with the provisions of this Indenture; and
(b) such Debt Securities, when completed by appropriate insertions and
executed and delivered by the Company to the Trustee in accordance with the
Indenture, authenticated and delivered by the Trustee in accordance with this
Indenture and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent transfer
and similar laws affecting creditors' rights generally and to general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law).
The Trustee shall not be required to authenticate such Debt Securities if the
issuance of such Debt Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debt Securities and this
Indenture in a manner which is not reasonably acceptable to the Trustee.
Each Debt Security shall be dated the date of its authentication.
No Debt Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Debt Security a
certificate of authentication substantially in one of the forms provided for
herein duly executed by the Trustee or by an Authenticating Agent, and such
certificate upon any Debt Security shall be conclusive evidence, and the only
evidence, that such Debt Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Debt Security shall have been duly authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Debt Security to the Trustee for cancellation as provided in
Section 3.8 together with a written statement (which need not comply with
Section 1.2) stating that such Debt Security has never been issued and sold by
the Company, for all purposes of this Indenture such Debt Security shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
Section 3.4 TEMPORARY DEBT SECURITIES; EXCHANGE OF TEMPORARY GLOBAL NOTES FOR
DEFINITIVE DEBT SECURITIES; GLOBAL NOTES REPRESENTING DEBT SECURITIES.
- ---------------------------------------------------------------------
(a) Pending the preparation of definitive Debt Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Debt Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination for Debt
Securities of such series, substantially of the tenor of the definitive Debt
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Debt Securities may determine, as conclusively evidenced by their
execution of such Debt Securities. Every such temporary Debt Security shall be
executed by the Company and shall be authenticated and delivered by the Trustee
upon the same conditions and in substantially the same manner, and with the same
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effect, as the definitive Debt Securities in lieu of which they are issued.
Except in the case of temporary Debt Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Debt Securities of any series are issued, the Company will cause
definitive Debt Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Debt Securities of such series, the
temporary Debt Securities of such series shall be exchangeable for definitive
Debt Securities of such series, of a like Stated Maturity and with like terms
and provisions, upon surrender of the temporary Debt Securities of such series
at the office or agency of the Company in a Place of Payment for such series,
without charge to the holder, except as provided in Section 3.5 in connection
with a transfer. Upon surrender for cancellation of any one or more temporary
Debt Securities of any series, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Debt Securities of the same series of authorized denominations and of
a like Stated Maturity and like terms and provisions. Until so exchanged, the
temporary Debt Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Debt Securities of such series.
(b) If the Company shall establish pursuant to Section 3.1 that the Debt
Securities of a series are to be issued in whole or in part in the form of one
or more Global Notes, then the Company shall execute and the Trustee shall, in
accordance with Section 3.3 and the Company Order with respect to such series,
authenticate and deliver one or more Global Notes in temporary or permanent form
that (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of the Outstanding Debt Securities of such series to
be represented by one or more Global Notes, (ii) shall be registered in the name
of the U.S. Depositary for such Global Note or Notes or the nominee of such
depositary, and (iii) shall bear a legend substantially as set forth in Section
2.3.
Notwithstanding any other provision of this Section or Section 3.5, unless and
until it is exchanged in whole or in part for Debt Securities in definitive
form, a Global Note representing all or a portion of the Registered Securities
of a series may not be transferred except as a whole by the U.S. Depositary for
such series to a nominee of such depositary or by a nominee of such depositary
to such depositary or another nominee of such depositary or by such depositary
or any such nominee to a successor U.S. Depositary for such series or a nominee
of such successor depositary.
If at any time the U.S. Depositary for the Debt Securities of a series
notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Debt Securities of such series or if at any time the U.S.
Depositary for Debt Securities of a series shall no longer be a clearing agency
registered and in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall appoint a
successor U.S. Depositary with respect to the Debt Securities of such series.
If a successor U.S. Depositary for the Debt Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Debt Securities of such series, will authenticate and deliver, Debt
Securities of such series in definitive form in an aggregate
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principal amount equal to the principal amount of the Global Note or Notes
representing such series in exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion determine that the Debt
Securities of any series issued in the form of one or more Global Notes shall no
longer be represented by such Global Note or Notes. In such event, the Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Debt Securities of such series, will
authenticate and deliver, Debt Securities of such series in definitive form and
in an aggregate principal amount equal to the principal amount of the Global
Note or Notes representing such series in exchange for such Global Note or
Notes.
If the Debt Securities of any series shall have been issued in the form of one
or more Global Notes and if an Event of Default with respect to the Debt
Securities of such series shall have occurred and be continuing, the Company
will promptly execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Debt Securities of such series, will
authenticate and deliver, Debt Securities of such series in definitive form and
in an aggregate principal amount equal to the principal amount of the Global
Note or Notes representing such series in exchange for such Global Note or
Notes.
If specified by the Company pursuant to Section 3.1 with respect to Debt
Securities of a series, the U.S. Depositary for such series of Debt Securities
may surrender a Global Note for such series of Debt Securities in exchange in
whole or in part for Debt Securities of such series in definitive form on such
terms as are acceptable to the Company and such depositary. Thereupon, the
Company shall execute and the Trustee shall authenticate and deliver, without
charge:
(i) to each Person specified by the U.S. Depositary a new Debt
Security or Securities of the same series, of any authorized denomination as
requested by such Person in an aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Global Note; and
(ii) to the U.S. Depositary a new Global Note in a denomination equal to
the difference, if any, between the principal amount of the surrendered Global
Note and the aggregate principal amount of Debt Securities delivered to holders
thereof.
Upon the exchange of a Global Note for Debt Securities in definitive form,
such Global Note shall be cancelled by the Trustee. Debt Securities issued in
exchange for a Global Note pursuant to this subsection (c) shall be registered
in such names and in such authorized denominations as the U.S. Depositary for
such Global Note, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Debt Securities to the Persons in whose names such Debt Securities
are so registered.
Section 3.5 REGISTRATION, TRANSFER AND EXCHANGE.
- -------------------------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the registers maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Debt Securities and of transfers and exchanges of Debt
Securities. The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Debt
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Securities and registering transfers and exchanges of Debt Securities as herein
provided; provided, however, that the Company may appoint co-Security Registrars
or the terms of any series of Debt Securities may provide otherwise.
Upon surrender for registration of transfer of any Debt Security of any
series at the office or agency of the Company maintained for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee, one or more new Debt Securities of the same
series of like aggregate principal amount of such denominations as are
authorized for Debt Securities of such series and of a like Stated Maturity and
with like terms and conditions.
Except as otherwise provided in Section 3.4 and this Section 3.5, at the
option of the holder, Debt Securities of any series may be exchanged for other
Debt Securities of the same series of like aggregate principal amount and of a
like Stated Maturity and with like terms and conditions, upon surrender of the
Debt Securities to be exchanged at such office or agency. Whenever any Debt
Securities are surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Debt Securities which the holder
making the exchange is entitled to receive.
(b) All Debt Securities issued upon any transfer or exchange of Debt
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Debt Securities
surrendered for such transfer or exchange.
Every Debt Security presented or surrendered for 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 Security Registrar, duly executed, by the holder thereof or his
or her attorney duly authorized in writing.
No service charge will be made for any transfer or exchange of Debt
Securities except as provided in Section 3.4(b) or 3.6. 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 registration, transfer or exchange of Debt
Securities, other than those expressly provided in this Indenture to be made at
the Company's own expense or without expense or without charge to the holders.
The Company shall not be required (i) to register, transfer or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before the day of the transmission of a notice of redemption
of Debt Securities of such series selected for redemption under Section 13.3 and
ending at the close of business on the day of such transmission, or (ii) to
register, transfer or exchange any Debt Security so selected for redemption in
whole or in part, except the unredeemed portion of any Debt Security being
redeemed in part.
Section 3.6 MUTILATED, DESTROYED, LOST AND STOLEN DEBT SECURITIES.
- -------------------------------------------------------------------
If (i) any mutilated Debt Security is surrendered to the Trustee at its
Corporate Trust Office, or (ii) the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Debt Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them and any Paying Agent harmless, and
neither the Company nor the Trustee
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receives notice that such Debt Security has been acquired by a bona fide
purchaser, then the Company shall execute and upon Company Request, the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Debt Security, a new Debt Security of the
same series of like Stated Maturity and with like terms and conditions and like
principal amount, bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Debt Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debt Security, pay the amount due on such Debt
Security.
Upon the issuance of any new Debt Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in respect thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Debt Security of any series issued pursuant to this Section shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Debt Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debt Securities of
that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debt Securities.
Section 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
- ------------------------------------------------------------
(a) Interest on any Debt 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 such Debt Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
notwithstanding the cancellation of such Debt Security upon any transfer or
exchange subsequent to the Regular Record Date. Unless otherwise specified as
contemplated by Section 3.1 with respect to the Debt Securities of any series,
payment of interest on Debt Securities shall be made at the place or places
specified pursuant to Section 3.1 or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or, if provided pursuant to Section 3.1, by wire
transfer to an account designated by the registered holder.
(b) Any interest on any Debt Security which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
holder on the relevant Regular Record Date by virtue of his having been such
registered holder, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names such Debt 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
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shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each such Debt Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage
prepaid, to the holders of such Debt Securities at their addresses as they
appear in the Security Register, not less than 15 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Debt Securities (or
their respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on Debt
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Debt Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section, each Debt Security
delivered under this Indenture upon transfer of, in exchange for, or in lieu of,
any other Debt Security shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Debt Security.
Section 3.8 CANCELLATION.
- --------------------------
Unless otherwise specified pursuant to Section 3.1 for Debt Securities of any
series, all Debt Securities surrendered for payment, redemption, transfer,
exchange or credit against any sinking fund surrendered for payment or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee. All Debt Securities so delivered shall be promptly cancelled by the
Trustee. The Company may at any time deliver to the Trustee for cancellation
any Debt Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Debt Securities previously authenticated hereunder which the Company has not
issued, and all Debt Securities so delivered shall be promptly cancelled by the
Trustee. No Debt Securities shall be authenticated in lieu of or in exchange
for any Debt Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Debt Securities held by
the Trustee shall be delivered to the Company upon Company Request. The
acquisition of any Debt Securities by the Company shall not operate as a
redemption or satisfaction of the indebtedness represented thereby unless and
until such Debt Securities are surrendered to the Trustee for cancellation.
Permanent Global Notes
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shall not be destroyed until exchanged in full for definitive Debt Securities or
until payment thereon is made in full.
Section 3.9 COMPUTATION OF INTEREST.
- -------------------------------------
Except as otherwise specified pursuant to Section 3.1 for Debt Securities of
any series, interest on the Debt Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.
- -----------------------------------------------------
This Indenture shall, upon Company Request, cease to be of further effect with
respect to any series of Debt Securities specified in such Company Request
(except as to any surviving rights of registration of transfer or exchange of
such Debt Securities herein expressly provided for and rights to receive
payments of principal (and premium, if any) and
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interest on such Debt Securities) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(a) either
(1) all Debt Securities of such series theretofore authenticated and
delivered (other than (i) Debt Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided in
Section 3.6, and (ii) Debt Securities of such series for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 12.4) have been
delivered to the Trustee for cancellation; or
(2) all Debt Securities of such series not theretofore delivered to the
Trustee for cancellation,
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice by
the Trustee in the name, and at the expense, of the Company, or
(iv) the Company either complies with any other condition or terms
specified pursuant to Section 3.1, or if not so specified in the case
of (i), (ii) or (iii) of this subclause (a), has irrevocably
deposited or caused to be deposited with the Trustee as trust funds
in trust for such purpose an amount sufficient to pay and discharge
the entire indebtedness on such Debt Securities for principal (and
premium, if any) and interest to the date of such deposit (in the
case of Debt Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be; provided,
however, in the event a petition for relief under the Federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar
law, is filed with respect to the Company within 91 days after the
deposit and the Trustee is required to return the deposited money to
the Company, the obligations of the Company under this Indenture with
respect to such Debt Securities shall not be deemed terminated or
discharged;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(c) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture with respect to
such series have been complied with; and
(d) the Company has delivered to the Trustee an Opinion of Counsel or a ruling
by the Internal Revenue Service to the effect that holders of the Debt
Securities of the series will not recognize income, gain or loss
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for Federal income tax purposes as a result of such deposit and discharge.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14, the obligations of
the Company under Section 12.1, and, if money shall have been deposited with the
Trustee pursuant to subclause (2) of clause (a) of this Section, the obligations
of the Trustee under Section
Section 4.2 APPLICATION OF TRUST MONEY.
- ----------------------------------------
Subject to the provisions of the last paragraph of Section 12.4, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Debt Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE 5
REMEDIES
Section 5.1 EVENTS OF DEFAULT.
- -------------------------------
"Event of Default" wherever used herein with respect to Debt Securities of any
series means any one of the following events (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law, pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Debt Security of such
series when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(b) default in the payment of the principal of (and premium, if any, on) any
Debt Security of such series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and as due by the
terms of a Debt Security of such series; or
(d) default in the performance, or breach, of any covenant or warranty of any
Obligor 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 expressly has been included in this Indenture solely for the benefit of
Debt Securities of a series other than such series), and continuance of such
default or breach for a period of 60 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 Debt Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
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(e) the entry of a decree or order for relief in respect of the Company by a
court having jurisdiction in the premises in an involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or 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 receiver, liquidator, assignee, custodian, 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 unstayed and in effect for a
period of 90 consecutive days; or
(f) the commencement by the Company of a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or other similar law, or the consent by
it to the entry of an order for relief in an involuntary case under any such law
or to the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other 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
its creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action; or
(g) any other Event of Default or variations in the foregoing Events of
Default provided with respect to Debt Securities of that series pursuant to
Section 3.1.
Section 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
- ----------------------------------------------------------------
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series may declare the principal amount (or, if any Debt
Securities of such series are Discount Securities, such portion of the principal
amount of such Discount Securities as may be specified in the terms of such
Discount Securities) of all the Debt Securities of such series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by holders), and upon any such declaration such principal amount (or
specified amount) plus accrued and unpaid interest (and premium, if payable)
shall become immediately due and payable. Upon payment of such amount all
obligations of the Company in respect of the payment of principal of the Debt
Securities of such series shall terminate.
At any time after such a declaration of acceleration with respect to Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the holders of at least a majority in principal amount of the
Outstanding Debt Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay
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(1) all overdue installments of interest on all Debt Securities of such
series,
(2) the principal of (and premium, if any, on) any Debt Securities of
such series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in such Debt Securities,
(3) to the extent that payment of such interest is lawful, interest upon
overdue installments of interest on each Debt Security of such series at
the Overdue Rate, and
(4) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel;
(b) All Events of Default with respect to Debt Securities of such series,
other than the nonpayment of the principal of Debt Securities of such series
which has become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 5.13.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
- -----------------------------------------------------------------------------
The Company covenants that, if:
(a) default is made in the payment of any installment of interest on any Debt
Security when such interest or payment becomes due and payable and such default
continues for a period of 30 days,
(b) default is made in the payment of principal of (or premium, if any, on)
any Debt Security at the Maturity thereof, or
(c) default is made in the making or satisfaction of any sinking fund payment
or analogous obligation when the same becomes due pursuant to the terms of the
Debt Securities of any series, then the Company will, upon demand of the
Trustee, pay to it, for the benefit of the holders of such Debt Securities, the
amount then due and payable on such Debt Securities for the principal (and
premium, if any) and interest, if any, and, to the extent that payment of such
interest shall be legally enforceable, interest upon the overdue principal (and
premium, if any) and upon overdue installments of interest, at the Overdue Rate;
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amount forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Debt Securities and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company or any other obligor upon such Debt Securities
wherever situated.
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If an Event of Default with respect to Debt Securities of any series occurs
and is continuing, then the Trustee may, in its discretion, proceed to protect
and enforce its rights and the rights of the holders of Debt Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.
- ----------------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, relative to the Company or
any other obligor upon the Debt Securities, of a particular series or the
property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of such Debt Securities shall
then be due and payable as therein expressed or by declaration of acceleration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company or any obligor for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of principal (or, if the
Debt Securities of such series are Discount Securities, such portion of the
principal amount as may be due and payable with respect to such series pursuant
to a declaration in accordance with Section 5.2) (and premium, if any) and
interest owing and unpaid in respect of the Debt Securities of such 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 the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the holders of such Debt Securities allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities of such series or the rights of any holder thereof, or to authorize
the Trustee to vote in respect of the claim of any holder in any such
proceeding.
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Section 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBT SECURITIES.
- ------------------------------------------------------------------------------
All rights of action and claims under this Indenture or the Debt Securities of
any series may be prosecuted and enforced by the Trustee without the possession
of any of such Debt Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name, as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Debt Securities in respect of
which such judgment has been recovered.
Section 5.6 APPLICATION OF MONEY COLLECTED.
- --------------------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (and premium,
if any) or interest, upon presentation of the Debt Securities of any series in
respect of which money has been collected and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.7.
SECOND: To the payment of the amounts then due and unpaid for principal of
(and premium, if any) and interest on the Debt Securities of such series, in
respect of which or for the benefit of which such money has been collected
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Debt Securities for principal (and premium, if any) and
interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
Section 5.7 LIMITATION ON SUITS.
- ---------------------------------
No holder of any Debt Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to such series;
(b) the holders of not less than 25% in principal amount of the Outstanding
Debt Securities of such series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such holder or holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;
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(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the holders of at least a majority in
principal amount of the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
holders or of the holders of Outstanding Debt Securities of any other series, or
to obtain or to seek to obtain priority or preference over any other of such
holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such holders.
For the protection and enforcement of the provisions of this Section 5.7, each
and every holder of Debt Securities of any series and the Trustee for such
series shall be entitled to such relief as can be given at law or in equity.
Section 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
------------------------------------------------------------
AND INTEREST.
- ------------
Notwithstanding any other provision in this Indenture, the holder of any Debt
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7
and 3.10) interest on such Debt Security on the respective Stated Maturity or
Maturities expressed in such Debt Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment and interest thereon, and such right shall not be impaired without the
consent of such holder.
Section 5.9 RESTORATION OF RIGHTS AND REMEDIES.
- ------------------------------------------------
If the Trustee or any holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such holder, then and in every such case the Company, the Trustee and the
holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the holders shall continue as though
no such proceeding had been instituted.
Section 5.10 RIGHTS AND REMEDIES CUMULATIVE.
- --------------------------------------------
Except as otherwise expressly provided elsewhere in this Indenture, no right
or remedy herein conferred upon or reserved to the Trustee or to the holders 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.
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Section 5.11 DELAY OR OMISSION NOT WAIVER.
- ------------------------------------------
No delay or omission of the Trustee or of any holder to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or any acquiescence therein.
Every right and remedy given by this Indenture or by law to the Trustee or to
the holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the holders, as the case may be.
Section 5.12 CONTROL BY HOLDERS.
- --------------------------------
The holders of at least a majority in principal amount of the Outstanding Debt
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of such series, provided that:
(a) such direction shall not be in conflict with any rule of law or with this
Indenture;
(b) subject to the provisions of Section 6.1, the Trustee shall have the right
to decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceeding so directed would be unjustly prejudicial to the holders of Debt
Securities of such series not joining in any such direction; and
(c) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.
Section 5.13 WAIVER OF PAST DEFAULTS.
- -------------------------------------
The holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of any series, by notice to the Trustee, may, on
behalf of the holders of all Debt Securities of such series, waive any past
default hereunder with respect to such series and its consequences, except a
default:
(a) in the payment of the principal of (or premium, if any) or interest on any
Debt Security of such series, or in the payment of any sinking fund installment
or analogous obligation with respect to the Debt Securities of such series, or
(b) in respect of a covenant or provision hereof which, pursuant to Article
11, cannot be modified or amended without the consent of the holder of each
Outstanding Debt Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of the Debt Securities of such series under this Indenture, but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
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Section 5.14 UNDERTAKING FOR COSTS.
- -----------------------------------
All parties to this Indenture agree, and each holder of any Debt 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 other than the Trustee of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant, but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any holder or group of
holders holding in the aggregate more than 10% in principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
holder of a Debt Security for the enforcement of the payment of the principal of
(or premium, if any) or interest on such Debt Security on or after the
respective Stated Maturity or Maturities expressed in such Debt Security (or, in
the case of redemption, on or after the Redemption Date).
Section 5.15 WAIVER OF STAY OR EXTENSION LAWS.
- ----------------------------------------------
Each Obligor covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and each Obligor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 6
THE TRUSTEE
Section 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.
- -------------------------------------------------
(a) Except during the continuance of an Event of Default with respect to the
Debt Securities of any series,
(1) the Trustee undertakes to perform such duties and only such duties 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 certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to
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determine whether or not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Debt Securities of any series
has occurred and is continuing, the Trustee shall, with respect to the Debt
Securities of such series, exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it with respect to Debt Securities of
any series in good faith in accordance with the direction of the holders
of at least a majority in principal amount of the Outstanding Debt
Securities of such series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture;
(4) the Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it; and
(5) the Trustee shall comply with any order or directive of a Gaming
Authority that the Trustee submit an application for any license, finding of
suitability or other approval pursuant to any Gaming Law and will cooperate
fully and completely in any proceeding related to such application.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 6.2 NOTICE OF DEFAULTS.
- --------------------------------
Within 90 days after the occurrence of any default hereunder with respect to
Debt Securities of any series, the Trustee shall give notice to all holders of
Debt Securities of such series of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Debt Security of such series or in the payment of any
sinking fund installment with respect to Debt Securities of such series, the
Trustee
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shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the holders of Debt Securities of such
series; and provided, further, that in the case of any default of the character
specified in Section 5.1(d) with respect to Debt Securities of such series no
such notice to holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Debt Securities of such series.
Notice given pursuant to this Section 6.2 shall be transmitted by mail:
(a) to all registered holders, as the names and addresses of the registered
holders appear in the Security Register; and
(b) to each holder of a Debt Security of any series whose name and address
appear in the information preserved at the time by the Trustee in accordance
with Section 7.2(a) of this Indenture.
Section 6.3 CERTAIN RIGHTS OF TRUSTEE.
- ---------------------------------------
Except as otherwise provided in Section 6.1:
(a) the Trustee may rely, and shall be protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
holders of Debt Securities of any series pursuant to this Indenture, unless such
holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order,
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bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due
care by it hereunder.
Section 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBT SECURITIES.
- -------------------------------------------------------------------------
The recitals contained herein and in the Debt Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debt Securities of any series. The Trustee shall not be
accountable for the use or application by the Company of any Debt Securities or
the proceeds thereof.
Section 6.5 MAY HOLD DEBT SECURITIES.
- --------------------------------------
The Trustee, any Paying Agent, the Security Registrar or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of Debt Securities and, subject to Sections 6.8 and 6.13, may otherwise
deal with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such other agent.
Section 6.6 MONEY HELD IN TRUST.
- ---------------------------------
Money held by the Trustee or any Paying Agent in trust hereunder need not be
segregated from other funds except to the extent required by law. Neither the
Trustee nor any Paying Agent shall be under any liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
Section 6.7 COMPENSATION AND REIMBURSEMENT.
- --------------------------------------------
The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its agents and counsel), except
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any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust or performance of its duties hereunder, including the costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under this
Section, the Trustee shall have a claim prior to the Debt Securities, upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of amounts due on the Debt Securities.
The obligations of the Company under this Section 6.7 to compensate and
indemnify the Trustee for reasonable expenses, disbursements and advances shall
constitute additional indebtedness under this Indenture and shall survive the
satisfaction and discharge of this Indenture.
SECTION 6.8. DISQUALIFICATION; CONFLICTING INTERESTS.
- -----------------------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of Section 310 of the Trust Indenture Act, the Trustee shall either
eliminate such conflicting interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture. To the extent permitted by the Trust Indenture Act, the Trustee shall
not be deemed to have conflicting interest with respect to the Debt Securities
of any series by virtue
of being Trustee with respect to the Debt Securities of any particular series of
Debt Securities other than that series.
Section 6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
- -----------------------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $100,000,000, subject to supervision or examination by Federal,
State or District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. Neither the Company nor any person directly or
indirectly controlling, controlled by, or under common control with the Company
shall serve as Trustee upon any Debt Securities.
Section 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
- ---------------------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
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(b) The Trustee may resign at any time with respect to the Debt Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debt Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Debt Securities
of any series and a successor Trustee appointed by Act of the holders of at
least a majority in principal amount of the Outstanding Debt Securities of such
series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 with respect to the
Debt Securities of any series after written request therefor by the Company or
by any holder who has been a bona fide holder of a Debt Security of such series
for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 with respect
to the Debt Securities of any series and shall fail to resign after written
request therefor by the Company or by any such holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Debt Securities, or (ii) subject to Section 5.14,
any holder who has been a bona fide holder of a Debt Security of any series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee for the Debt Securities of such series.
(e) If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Debt Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the Debt
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Debt Securities of one or more or
all of such series and that at any time there shall be only one Trustee with
respect to the Debt Securities of any particular series) and shall comply with
the applicable requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Debt Securities of any series shall be
appointed by Act of the holders of at least a majority in principal amount of
the Outstanding Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Debt Securities of such series and, to that extent, supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
holders of such series and accepted appointment in the
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manner hereinafter provided, any holder who has been a bona fide holder of a
Debt Security of such series for at least six months may, subject to Section
5.14, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Debt Securities of such series.
(f) The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Debt Securities of any series and each appointment
of a successor Trustee with respect to the Debt Securities of any series in the
manner and to the extent provided in Section 18.2 to the holders of Debt
Securities of such series. Each notice shall include the name of the successor
Trustee with respect to the Debt Securities of such series and the address of
its Corporate Trust Office.
Section 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
- ----------------------------------------------------
(a) In the case of an appointment hereunder of a successor Trustee with
respect to all Debt Securities, each such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee, but, on request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder, subject nevertheless to its
claim, if any, provided for in Section 6.7.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Debt Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in any such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any other trust or trusts hereunder administered by any other such Trustee; and,
upon the execution and delivery of any such supplemental indenture, the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debt
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Securities of that or those series to which the appointment of such successor
Trustee relates, but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Debt Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
- -------------------------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Debt Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Debt Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Debt Securities. In case any Debt Securities shall not have been authenticated
by such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.
Section 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
- --------------------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Debt Securities), the Trustee shall be subject to the
provisions of Section 311 of the Trust Indenture Act regarding the collection of
such claims against the Company (or any such other obligor). A Trustee that has
resigned or been removed shall be subject to and comply with said Section 311 to
the extent required thereby.
Section 6.14 APPOINTMENT OF AUTHENTICATING AGENT.
- -------------------------------------------------
As long as any Debt Securities of a series remain Outstanding, upon a Company
Request, there shall be an authenticating agent (the "Authenticating Agent")
appointed, for such period as the Company shall elect, by the Trustee for such
series of Debt Securities to act as its agent on its behalf and subject to its
direction in connection with the authentication and delivery of each series of
Debt Securities for which
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it is serving as Trustee. Debt Securities of each such series authenticated by
such Authenticating Agent shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by such
Trustee. Wherever reference is made in this Indenture to the authentication and
delivery of Debt Securities of any series by the Trustee for such series or to
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee for such series by
an Authenticating Agent for such series and a certificate of authentication
executed on behalf of such Trustee by such Authenticating Agent, except that
only the Trustee may authenticate Debt Securities upon original issuance and
pursuant to Section 3.6 hereof. Such Authenticating Agent shall at all times be
a corporation organized and doing business under the laws of the United States
of America or of any State, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $100,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Debt Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee for such series or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the applicable Trustee
and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.14 with respect to one or more
or all series of Debt Securities, the Trustee for such series shall, upon
Company Request, appoint a successor Authenticating Agent, and the Company shall
provide notice of such appointment to all holders of Debt Securities of such
series in the manner and to the extent provided in Section 17.2. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent
herein. The Trustee for the Debt Securities of such series agrees to pay to the
Authenticating Agent for such series from time to time reasonable compensation
for its services, and the Trustee shall be entitled to be reimbursed for such
payment, subject to the provisions of Section 6.7. The Authenticating Agent for
the Debt Securities of any series shall have no responsibility or liability for
any action taken by it as such at the direction of the Trustee for such series,
except arising out of its negligence or willful misconduct.
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If an appointment with respect to one or more series is made pursuant to this
Section, the Debt Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the series of Debt Securities issued under the within
mentioned Indenture.
[NAME OF TRUSTEE] As Trustee
By: ____________________
As Authenticating Agent
By: ____________________
Authorized Signatory
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
- -----------------------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee with respect
to Debt Securities of each series for which it acts as Trustee:
(a) semi-annually on a date not more than 15 days after each Regular Record
Date with respect to an Interest Payment Date, if any, for the Debt
Securities of such series (or on semi-annual dates in each year to be
determined pursuant to Section 3.1 if the Debt Securities of such series
do not bear interest), a list, in such form as the Trustee may reasonably
require, of the names and addresses of the registered holders as of the
date 15 days next preceding each such Regular Record Date (or such semi-
annual dates, as the case may be); and
(b) at such other times as the Trustee may request in writing, within 30 days
after the receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is
furnished;
Provided, however, that if and so long as the Trustee shall be the Security
Registrar for such series, no such list need be furnished.
Section 7.2 PRESERVATION OF INFORMATION; COMMUNICATION TO HOLDERS.
- -------------------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of holders contained
in the most recent list furnished to the Trustee as provided in Section 7.1
received by it in the capacity of Paying Agent (if so acting) hereunder, and
filed with it within the two preceding years pursuant to Section 7.3(c)(2).
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The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished, destroy any information
received by it as Paying Agent (if so acting) hereunder upon delivering to
itself as Trustee, not earlier than 45 days after an Interest Payment Date, a
list containing the names and addresses of the holders obtained from such
information since the delivery of the next previous list, if any, destroy any
list delivered to itself as Trustee which was compiled from information received
by it as Paying Agent (if so acting) hereunder upon the receipt of a new list so
delivered, and destroy, not earlier than two years after filing, any information
filed with it pursuant to Section 7.3(c)(2).
(b) If three or more holders (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 Debt 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 Debt Securities of a
particular series (in which case the applicants must hold Debt Securities of
such series) or with all holders of Debt Securities with respect to their rights
under this Indenture or under the Debt Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, at its election, either
(i) afford such applicants access to the information preserved at the time
by the Trustee in accordance with Section 7.2(a), or
(ii) inform such applicants as to the approximate number of holders of Debt
Securities of such series or of all Debt Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 7.2(a), and as to the approximate cost of
mailing to such holders the form of proxy or other communication, specified in
such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon written request of such applicants, mail to
the holders of Debt Securities of such series or all holders, as the case may
be, whose names and addresses appear in the information preserved at the time by
the Trustee in accordance with Section 7.2(a), a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five Business 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 Debt Securities of such series or all holders, as the case may be, or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such holders 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.
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(c) Every holder of Debt Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the holders in accordance with Section 7.2(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing of any material
pursuant to a request made under Section 7.2(b).
Section 7.3 REPORTS BY TRUSTEE.
- --------------------------------
(a) Within 60 days after [DATE] of each year, commencing with the first [DATE]
after the first issuance of Debt Securities pursuant to this Indenture, the
Trustee shall, to the extent required by the Trust Indenture Act, transmit to
all holders of Debt Securities of any series with respect to which it acts as
Trustee, in the manner hereinafter provided in this Section 7.3, a brief report
dated such date with respect to any of the following events which may have
occurred within the previous 12 months (but if no such event has occurred within
such period, no report need be transmitted):
(1) any change to its eligibility under Section 6.9 and its
qualifications under Section 6.8;
(2) the creation of or any material change to a relationship specified in
paragraph (1) through (10) of Section 310(b) of the Trust Indenture Act;
(3) the character and amount of any advances (and if the Trustee elects so
to state, the circumstances surrounding the making thereof) made by the Trustee
(as such) which remain unpaid on the date of such report, and for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Debt Securities of such series, on any property or funds held or collected
by it as Trustee, except that the Trustee shall not be required (but may elect)
to report such advances if such advances so remaining unpaid aggregate not more
than 1/2 of 1% of the principal amount of the Outstanding Debt Securities of
such series on the date of such report;
(4) any change to the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or any other obligor on the Debt Securities
of such series) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral security
therefor, except an indebtedness based upon a creditor relationship arising in
any manner described in Section 311(b) of the Trust Indenture Act;
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Debt Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which, in its opinion,
materially affects the Debt Securities of such series, except action in respect
of a default, notice of which has been or is to be withheld by the Trustee in
accordance with Section 6.2.
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(b) The Trustee shall transmit by mail to all holders of Debt Securities of
any series (whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 7.2 (a)) for which it acts as the
Trustee, as hereinafter provided, a brief report with respect to the character
and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Debt Securities of such series, on
property or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this subsection, except that the Trustee for
each series shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate 10% or less of the
principal amount of the Debt Securities of such series Outstanding at such time,
such report to be transmitted within 90 days after such time.
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(c) Reports pursuant to this Section 7.3 shall be transmitted by mail:
(1) to all holders of Debt Securities, as the names and addresses of such
holders of Debt Securities appear in the Security Register; and
(2) except in the cases of reports pursuant to subsection (b) of this
Section 7.3, to each holder of a Debt Security of any series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.2(a).
(e) A copy of each such report shall, at the time of such transmission to
holders, be filed by the Trustee with each stock exchange upon which any Debt
Securities of such series are listed, with the Commission and also with the
Company. The Company will notify the Trustee when any series of Debt Securities
are listed on any stock exchange.
Section 7.4 REPORTS BY COMPANY.
- --------------------------------
Unless otherwise specified with respect to a particular series of Debt
Securities pursuant to Section 3.1, the Company will 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 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.
ARTICLE 8
CONCERNING THE HOLDERS
Section 8.1 ACTS OF HOLDERS.
- -----------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by holders of Debt
Securities may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such holders in person or by an agent or
proxy duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the holders
signing such instrument or instruments. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Outstanding Debt Securities of any series may take any Act, the
fact that the holders of such specified percentage have joined therein may be
evidenced (a) by the instrument or instruments executed by holders
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in person or by agent or proxy appointed in writing, or (b) by the record of
holders voting in favor thereof at any meeting of such holders duly called and
held in accordance with the provisions of Article 9, or (c) by a combination of
such instrument or instruments and any such record of such a meeting of holders.
Section 8.2 PROOF OF OWNERSHIP; PROOF OF EXECUTION OF INSTRUMENTS BY HOLDER.
- -----------------------------------------------------------------------------
The ownership of Debt Securities of any series shall be proved by the Security
Register for such series or by a certificate of the Security Registrar for such
series.
Subject to the provisions of Sections 6.1, 6.3 and 9.5, proof of the execution
of a writing appointing an agent or proxy and of the execution of any instrument
by a holder or his agent or proxy shall be sufficient and conclusive in favor of
the Trustee and the Company if made in the following manner:
The fact and date of the execution by any such person of any instrument may be
proved by the certificate of any notary public or other officer authorized to
take acknowledgements of deeds, that the Person executing such instrument
acknowledged to him the execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other such officer. Where
such execution is by an officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or partnership, as the
case may be, or by any other Person acting in a representative capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
The record of any holders' meeting shall be proved in the manner provided in
Section 9.6.
The Trustee may in any instance require further proof with respect to any of
the matters referred to in this Section so long as the request is a reasonable
one.
Section 8.3 PERSONS DEEMED OWNERS.
- -----------------------------------
The Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name any Debt Security is registered as the owner of such
Debt Security for the purpose of receiving payment of the principal of (and
premium, if any) and (subject to Section 3.7) interest, if any, on such Debt
Security and for all other purposes whatsoever, whether or not such Debt
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary. All
payments made to any holder, or upon his order, shall be valid, and, to the
extent of the sum or sums paid, effectual to satisfy and discharge the liability
for moneys payable upon such Debt Security.
Section 8.4 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND.
- ----------------------------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.1, of the taking of any Act by the holders of the
percentage in aggregate principal amount of the Outstanding Debt Securities
specified in this Indenture in connection with such Act, any holder of a Debt
Security the number, letter or other distinguishing
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symbol of which is shown by the evidence to be included in the Debt Securities
the holders of which have consented to such Act may, by filing written notice
with the Trustee at the Corporate Trust Office and upon proof of ownership as
provided in Section 8.2, revoke such Act so far as it concerns such Debt
Security. Except as aforesaid, any such Act taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and, subject to the
provisions of Section 5.8, upon all future holders of such Debt Security and of
any Debt Securities issued on transfer or in lieu thereof or in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon such Debt Security or such other Debt Securities.
ARTICLE 9
HOLDERS' MEETINGS
Section 9.1 PURPOSES OF MEETINGS.
- ----------------------------------
A meeting of holders of any or all series may be called at any time and from
time to time pursuant to the provisions of this Article 9 for any of the
following purposes:
(a) to give any notice to the Company or to the Trustee for such series, or to
give any directions to the Trustee for such series, or to consent to the waiving
of any default hereunder and its consequences, or to take any other action
authorized to be taken by holders pursuant to any of the provisions of Article
5;
(b) to remove the Trustee for such series and appoint a successor Trustee
pursuant to the provisions of Article 6;
(c) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 11.2; or
(d) to take any other action authorized to be taken by or on behalf of the
holders of any specified aggregate principal amount of the Outstanding Debt
Securities of any one or more or all series, as the case may be, under any other
provision of this Indenture or under applicable law.
Section 9.2 CALL OF MEETINGS BY TRUSTEE.
- -----------------------------------------
The Trustee for any series may at any time call a meeting of holders of such
series to take any action specified in Section 9.1, to be held at such time or
times and at such place or places as the Trustee for such series shall
determine. Notice of every meeting of the holders of any series, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given to holders of such series in the
manner and to the extent provided in Section 18.2. Such notice shall be given
not less than 10 days nor more than 90 days prior to the date fixed for the
meeting.
Section 9.3 CALL OF MEETINGS BY COMPANY OR HOLDERS.
- ----------------------------------------------------
In case at any time the Company, pursuant to a Board Resolution, or the
holders of at least 10% in aggregate principal amount of the Outstanding Debt
Securities of a series or of all series, as the case may
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<PAGE>
be, shall have requested the Trustee for such series to call a meeting of
holders of any or all such series by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have given the notice of such meeting within 10 days after the receipt of such
request, then the Company or such holders may determine the time or times and
the place or places for such meetings and may call such meetings to take any
action authorized in Section 9.1, by giving notice thereof as provided in
Section 9.2.
Section 9.4 QUALIFICATIONS FOR VOTING.
- ---------------------------------------
To be entitled to vote at any meeting of holders, a Person shall be (a) a
holder of a Debt Security of the series with respect to which such meeting is
being held or (b) a Person appointed by an instrument in writing as agent or
proxy by such holder. The only Persons who shall be entitled to be present or
to speak at any meeting of holders shall be the Persons entitled to vote at such
meeting and their counsel, any representatives of the Trustee for the series
with respect to which such meeting is being held and its counsel and any
representatives of the Company and its counsel.
Section 9.5 REGULATIONS.
- -------------------------
Notwithstanding any other provisions of this Indenture, the Trustee for any
series may make such reasonable regulations as it may deem advisable for any
meeting of holders of such series, in regard to proof of the holding of Debt
Securities of such series and of the appointment of proxies, and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate.
The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by the Company or by
holders of such series as provided in Section 9.3, in which case the Company or
the holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by at least a majority vote of the meeting.
Subject to the provisos in the definition of "Outstanding," at any meeting
each holder of a Debt Security of the series with respect to which such meeting
is being held or proxy therefor shall be entitled to one vote for each $1,000
principal amount (or such other amount as shall be specified as contemplated by
Section 3.1) of Debt Securities of such series held or represented by such
holder; provided, however, that no vote shall be cast or counted at any meeting
in respect of any Debt Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting
shall have no right to vote other than by virtue of Outstanding Debt Securities
of such series held by him or her or instruments in writing duly designating him
or her as the person to vote on behalf of holders of Debt Securities of such
series. Any meeting of holders with respect to which a meeting was duly called
pursuant to the provisions of Section 9.2 or 9.3 may be adjourned from time to
time by at least a majority of such holders present and the meeting may be held
as so adjourned without further notice.
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Section 9.6 VOTING.
- --------------------
The vote upon any resolution submitted to any meeting of holders of a series
of Debt Securities with respect to which such meeting is being held shall be by
written ballots on which shall be subscribed the signatures of such holders or
of their representatives by proxy and the serial number or numbers of the Debt
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of holders shall be taken and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
transmitted as provided in Section 9.2. The record shall show the serial
numbers of the Debt Securities voting in favor of or against any resolution.
The record shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the
Trustee.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
Section 9.7 NO DELAY OF RIGHTS BY MEETING.
- -------------------------------------------
Nothing contained in this Article 9 shall be deemed or construed to authorize
or permit, by reason of any call of a meeting of holders or any rights expressly
or impliedly conferred hereunder to make such call, any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to the Trustee or
to any holder under any of the provisions of this Indenture or of the Debt
Securities of any series.
ARTICLE 10
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 10.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
- ------------------------------------------------------------------
The Company shall not consolidate with, merge with or into, or sell, assign,
convey, transfer or lease its properties and assets substantially in their
entirety (computed on a consolidated basis) to any Person, unless:
(a) either (A) the Company is the surviving entity or (B) the successor or
transferee (the "successor corporation") is a corporation organized and existing
under the laws of the United States, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, all of the obligations of the Company
under the Debt Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Event of Default
or Default shall exist; and
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(c) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture comply with this provision and
that all conditions precedent herein provided for relating to such transaction
have been complied with.
Section 10.2 SUCCESSOR CORPORATION SUBSTITUTED.
- -----------------------------------------------
Upon any consolidation with or merger into any other corporation, or any
conveyance, transfer or lease of the properties and assets of the Company
substantially in their entirety in accordance with Section 10.1, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein.
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
- ----------------------------------------------------------------
Without the consent of any holders, the relevant Obligors, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form reasonably
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another corporation to the rights of any
Obligor and the assumption by such successor of the covenants and obligations of
any Obligor contained herein and in the Debt Securities; or
(b) to add to the covenants, agreements or obligations of any Obligor for
the benefit of the holders of all or any series of Debt Securities (and if such
covenants are to be for the benefit of less than all series, stating that such
covenants are expressly being included solely for the benefit of such series),
or to surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default (and if such Events of Default
are to be applicable to less than all series, stating that such Events of
Default are expressly being included solely to be applicable to such series);or
(d) to add to, change or eliminate any of the provisions of this Indenture,
provided that any such addition, change or elimination shall become effective
only when there is no Outstanding Debt Security of any series created prior to
the execution of such supplemental indenture which is entitled to the benefit of
such provision and as to which such supplemental indenture would apply; or
(e) to secure the Debt Securities of any series and the terms and
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conditions for the release or substitution of such security; or
(f) to supplement any of the provisions of this Indenture to such extent as
shall be necessary to permit or facilitate the defeasance and discharge of any
series of Debt Securities pursuant to Article 4 or 14, provided that any such
action shall not adversely affect the interests of the holders of Debt
Securities of such series or any other series of Debt Securities in any material
respect; or
(g) to establish the form or terms of Debt Securities, of any series as
permitted by Sections 2.1 and 3.1; or
(h) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to one or more series of Debt Securities, and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one trustee; or
(i) to comply with the requirements of the Commission in connection with the
qualification of this Indenture under the Trust Indenture Act;
(j) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein or to
make any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with any provision of this
Indenture; provided such other provisions shall not adversely affect the
interests of the holders of Outstanding Debt Securities of any series created
prior to the execution of such supplemental indenture in any material respect.
The terms of any document entered into pursuant to this Section shall be
subject to prior approval, if required, of any applicable Gaming Authority.
Section 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
- -------------------------------------------------------------
With the written consent of the holders of not less than at least a majority
in principal amount of the Outstanding Debt Securities of each series affected
by such supplemental indenture, by Act of said holders delivered to the Company
and the Trustee, the relevant Obligors when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the holders under this Indenture of such Debt Securities;
provided, however, that no such supplemental indenture shall, without the
consent of the holder of each Outstanding Debt Security of each such series
affected thereby,
(a) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debt Security, or reduce the principal amount
thereof or the rate (or extend the time for payment) of interest thereon or any
premium payable upon redemption thereof, or reduce the amount of the principal
of a Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2, or impair the
right to institute suit for the enforcement of any payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date),
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or alter any redemption provisions in a manner adverse to the holders of such
series of Debt Securities or adversely affect the right to convert any Debt
Security into shares of Common Stock or other securities or property of the
Company as may be provided pursuant to Section 3.1; or
(b) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose holders is required for any
supplemental indenture, or the consent of whose holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture; or
(c) modify any of the provisions of this Section, Section 5.13, or Section
12.6, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the holder of each Outstanding Debt Security of each series affected thereby;
provided, however, that this clause shall not be deemed to require the consent
of any holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 6.11 and 11.1(9).
It shall not be necessary for any Act of holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture with respect to one or more particular series of
Debt Securities, or which modifies the rights of the holders of Debt Securities
of such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under this Indenture of the holders of Debt Securities
of any other series.
The terms of any document entered into pursuant to this Section shall be
subject to prior approval, if required, of any applicable Gaming Authority.
Section 11.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
- --------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which adversely affects
the Trustee's own rights, duties or immunities under this Indenture or otherwise
in a material way.
Section 11.4 EFFECT OF SUPPLEMENTAL INDENTURES.
- -----------------------------------------------
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every holder
of Debt Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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Section 11.5 CONFORMITY WITH TRUST INDENTURE ACT.
- -------------------------------------------------
Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
Section 11.6 REFERENCE IN DEBT SECURITIES TO SUPPLEMENTAL INDENTURES.
- ---------------------------------------------------------------------
Debt Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debt Securities of any series so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Debt Securities of such
series.
ARTICLE 12
COVENANTS
Section 12.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
- --------------------------------------------------------
The Company covenants and agrees for the benefit of each series of Debt
Securities, that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Debt Securities in accordance with the terms of the
Debt Securities and this Indenture. If so provided in the terms of any series
of Debt Securities established as provided in Section 3.1, the interest, if any,
due in respect of any temporary Global Note or permanent Global Note, together
with any additional amounts payable in respect thereof, as provided in the terms
and conditions of such Debt Security, shall be payable only upon presentation of
such Debt Security to the Trustee for notation thereon of the payment of such
interest.
Section 12.2 OFFICER'S CERTIFICATE AS TO COMPLIANCE.
- ----------------------------------------------------
Unless otherwise specifically provided for with respect to any series of
Debt Securities under Section 3.1, the Company will deliver to the Trustee,
within 120 days after the end of each fiscal year, a certificate of the
principal executive officer, principal financial officer or principal accounting
officer of the Company stating whether or not, to the knowledge of the signer
thereof, the Obligors are in compliance with all covenants and conditions under
this Indenture, and, in the event of any noncompliance, specifying such
noncompliance and the nature and status thereof of which such signer may have
knowledge. For purposes of this Section, such compliance shall be determined
without regard to any period of grace or requirement of notice provided under
this Indenture.
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Section 12.3 MAINTENANCE OF OFFICE OR AGENCY.
- ---------------------------------------------
The Company will maintain in each Place of Payment for such series an office
or agency where Debt Securities of that series may be presented or surrendered
for payment, where Debt Securities of that series may be surrendered for
registration of transfer or exchange, where Debt Securities of that series that
are convertible may be surrendered for conversion, if applicable, and where
notices and demands to or upon the Company in respect of the Debt Securities of
that series and this Indenture may be served. If the Debt Securities of any
series are listed on The Stock Exchange of the United Kingdom and the Republic
of Ireland, the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the Company
will maintain a Paying Agent for the Debt Securities of that series in London,
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Debt Securities of that series are listed on such
exchange, and subject to any laws or regulations applicable thereto, in a Place
of Payment for that series located outside the United States an office or agency
where any Debt Securities of that series may be surrendered for registration of
transfer, where Debt Securities of that series may be surrendered for exchange
or redemption and where notices and demands to or upon the Company in respect of
the Debt Securities of that series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee and
the Company hereby appoints the Trustee as its agent to receive all
presentations, surrenders, notices and demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
Section 12.4 MONEY FOR DEBT SECURITIES; PAYMENTS TO BE HELD IN TRUST.
- ---------------------------------------------------------------------
If the Company shall at any time act as its own Paying Agent with respect to
any series of Debt Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Debt Securities of
such series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect to
any series of Debt Securities, it will, by or on each due date of the principal
(and premium, if any) or interest on any Debt Securities of such series, deposit
with any such Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such
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sum to be held in trust for the benefit of the Persons entitled thereto, and
(unless any such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent with respect to any series of Debt
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Debt Securities of such series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Debt Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Debt
Securities of such series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Debt Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company upon Company Request, or (if then held by
the Company) shall be discharged from such trust; and the holder of such Debt
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be transmitted in the manner and to the extent
provided by Section 18.2, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 12.5 CORPORATE EXISTENCE.
- ---------------------------------
Subject to Article 10, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of its Subsidiaries; provided, however, that
the Company shall not be required to preserve the corporate existence of any
Subsidiary if the Company
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shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company.
Section 12.6 WAIVER OF CERTAIN COVENANTS.
- -----------------------------------------
Any Obligor may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 12.1 and 12.3 through 12.5 (and, if
so specified pursuant to Section 3.1, any other covenant not set forth herein
and specified pursuant to Section 3.1 to be applicable to the Debt Securities of
any series, except as otherwise provided pursuant to Section 3.1) with respect
to the Debt Securities of any series if before the time for such compliance the
holders of at least at least a majority in principal amount of the Outstanding
Debt Securities of such series shall, by Act of such holders, 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 expressly so 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.
ARTICLE 13
REDEMPTION OF DEBT SECURITIES
Section 13.1 APPLICABILITY OF ARTICLE.
- --------------------------------------
Debt Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.1 for Debt Securities of any series)
in accordance with this Article.
Section 13.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
- ---------------------------------------------------
The election of the Company to redeem any Debt Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of less than all of the Debt Securities of any series pursuant to Section 13.3,
the Company shall, at least 30 days before the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Debt
Securities of such series to be redeemed. In the case of any redemption of Debt
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Debt Securities or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restrictions.
Section 13.3 SELECTION BY TRUSTEE OF DEBT SECURITIES TO BE REDEEMED.
- --------------------------------------------------------------------
If less than all the Debt Securities of any series are to be redeemed at the
election of the Company, the particular Debt Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Debt Securities of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to $1,000
denominations for
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Debt Securities of such series or any integral multiple thereof) of the
principal amount of Debt Securities of such series in a denomination larger than
$1,000 denominations. The portions of the principal amount of Debt Securities so
selected for partial redemption shall be in denominations of $1,000 or any
integral multiple thereof, except as otherwise set forth in the applicable form
of Debt Securities. In any case when more than one Debt Security of such series
is registered in the same name, the Trustee, in its discretion, may treat the
aggregate principal amount so registered as if it were represented by one Debt
Security of such series.
The Trustee shall promptly notify the Company and the Security Registrar (if
other than itself) in writing of the Debt Securities selected for redemption
and, in the case of any Debt Securities selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Debt Securities shall relate, in
the case of any Debt Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debt security which has been or is to be
redeemed.
Section 13.4 NOTICE OF REDEMPTION.
- ----------------------------------
Notice of redemption 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, not less
than 30 days and not more than 60 days prior to the Redemption Date to the
holders of Debt Securities of any series to be redeemed in whole or in part
pursuant to this Article 13, in the manner provided in Section 18.2. Any notice
so given shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. Failure to give such notice, or any defect in
such notice to the holder of any Debt Security of a series designated for
redemption, in whole or in part, shall not affect the sufficiency of any notice
of redemption with respect to the holder of any other Debt Security of such
series.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) that Debt Securities of such series are being redeemed by the Company
pursuant to provisions contained in this Indenture or the terms of the Debt
Securities of such series or a supplemental indenture establishing such series,
if such be the case, together with a brief statement of the facts permitting
such redemption,
(d) if less than all Outstanding Debt Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Debt Securities to be redeemed,
(e) that on the Redemption Date the Redemption Price will become due and
payable upon each such Debt Security to be redeemed, and that interest thereon,
if any, shall cease to accrue on and after said date,
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(f) the Place or Places of Payment where such Debt Securities are to be
surrendered for payment of the Redemption Price, and
(g) that the redemption is for a sinking fund, if such is the case.
Section 13.5 DEPOSIT OF REDEMPTION PRICE.
- -----------------------------------------
On or prior to the Redemption Date for any Debt Securities, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 12.4) an amount of money in the Currency or Currencies in which such
Debt Securities are denominated (except as provided pursuant to Section 3.1)
sufficient to pay the Redemption Price of such Debt Securities or any portions
thereof which are to be redeemed on that date.
Section 13.6 DEBT SECURITIES PAYABLE ON REDEMPTION DATE.
- --------------------------------------------------------
Notice of redemption having been given as aforesaid, any Debt Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price (except as otherwise specified pursuant to Section 3.1 or 3.4),
and from and after such date (unless the Company shall default in the payment of
the Redemption Price) such Debt Securities shall cease to bear interest. Upon
surrender of any such Debt Security for redemption in accordance with said
notice, such Debt Security shall be paid by the Company at the Redemption Price;
provided, however, that, unless otherwise specified as contemplated by Section
3.1, installments of interest on Debt Securities which have a Stated Maturity on
or prior to the Redemption Date for such Debt Securities shall be payable
according to the terms of such Debt Securities and the provisions of Section
3.7.
If any Debt Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.
Section 13.7 DEBT SECURITIES REDEEMED IN PART.
- ----------------------------------------------
Any Debt Security which is to be redeemed only in part shall be
surrendered at the Corporate Trust Office or such other office or agency of the
Company as is specified pursuant to Section 3.1 with, if the Company, the
Security Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar and the Trustee duly executed by, the holder thereof or such holder's
attorney duly authorized in writing, and the Company shall execute, and the
Trustee shall authenticate and deliver to the holder of such Debt Security
without service charge, a new Debt Security or Debt Securities of the same
series, of like tenor and form, of any authorized denomination as requested by
such holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Debt Security so surrendered. In the
case of a Debt Security providing appropriate space for such notation, at the
option of the holder thereof, the Trustee, in lieu of delivering a new Debt
Security or Debt Securities as aforesaid, may make a notation on such Debt
Security of the payment of the redeemed portion thereof.
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ARTICLE 14
SINKING FUNDS
Section 14.1 APPLICABILITY OF ARTICLE.
- --------------------------------------
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Debt Securities of a series except as otherwise specified
pursuant to Section 3.1 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Debt 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 Debt Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Debt Securities of any
series, the amount of any cash sinking fund payment may be subject to reduction
as provided in Section 14.2. Each sinking fund payment shall be applied to the
redemption of Debt Securities of any series as provided for by the terms of Debt
Securities of such series.
Section 14.2 SATISFACTION OF MANDATORY SINKING FUND PAYMENTS WITH DEBT
- -----------------------------------------------------------------------
SECURITIES.
- ----------
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Debt Securities of a series in cash, the Company may at its
option, at any time no more than sixteen months and no less than 45 days prior
to the date on which such sinking fund payment is due, deliver to the Trustee
Debt Securities of such series theretofore purchased or otherwise acquired by
the Company, except Debt Securities of such series which have been redeemed
through the application of mandatory sinking fund payments pursuant to the terms
of the Debt Securities of such series, accompanied by a Company Order
instructing the Trustee to credit such obligations and stating that the Debt
Securities of such series were originally issued by the Company by way of bona
fide sale or other negotiation for value, provided that such Debt Securities
shall not have been previously so credited. Such Debt Securities shall be
received and credited for such by the Trustee at the Redemption Price specified
in such Debt Securities for redemption through operation of the sinking fund and
the amount of such mandatory sinking fund payment shall be reduced accordingly.
Section 14.3 REDEMPTION OF DEBT SECURITIES FOR SINKING FUND.
- ------------------------------------------------------------
Not less than 60 days prior to each sinking fund payment date for any series
of Debt Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash (except as provided pursuant to Section 3.1) and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Debt Securities of such series pursuant to Section 14.2 and whether
the Company intends to exercise its rights to make a permitted optional sinking
fund payment with respect to such series. Such certificate shall be irrevocable
and,
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upon its delivery, the Company shall be obligated to make the cash payment or
payments therein referred to, if any, on or before the next succeeding sinking
fund payment date. In the case of the failure of the Company to deliver such
certificate, the sinking fund payment due on the next succeeding sinking fund
payment date for such series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of the Debt Securities of such series
subject to a mandatory sinking fund payment without the right to deliver or
credit Debt Securities as provided in Section 14.2 and without the right to make
any optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with respect
to the Debt Securities of any particular series shall be applied by the Trustee
(or by the Company if the Company is acting as its own Paying Agent) on the
sinking fund payment date on which such payment is made (or, if such payment is
made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Debt
Securities of such series at the Redemption Price specified in such Debt
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or by the Company if the Company is acting
as its own Paying Agent) to the redemption of Debt Securities shall be added to
the next sinking fund payment received by the Trustee (or if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 12.4) for such series and, together with such payment (or such amount so
segregated) shall be applied in accordance with the provisions of this Section.
Any and all sinking fund moneys with respect to the Debt Securities of any
particular series held by the Trustee (or if the Company is acting as its own
Paying Agent, segregated and held in trust as provided in Section 12.4) on the
last sinking fund payment date with respect to Debt Securities of such series
and not held for the payment or redemption of particular Debt Securities of such
series shall be applied by the Trustee (or by the Company if the Company is
acting as its own Paying Agent), together with other moneys, if necessary, to be
deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Debt Securities of such series at Maturity.
The Trustee shall select or cause to be selected the Debt Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
13.3 and the Company shall cause notice of the redemption thereof to be given in
the manner provided in Section 13.4. Such notice having been duly given, the
redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 13.6.
On or before each sinking fund payment date, the Company shall pay to the
Trustee (or, if the Company is acting as its own Paying Agent, the Company shall
segregate and hold in trust as provided in Section 12.4) in cash a sum, equal to
the principal and any interest accrued to the Redemption Date for Debt
Securities or portions thereof to be redeemed on such sinking fund payment date
pursuant to this Section.
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ARTICLE 15
DEFEASANCE
Section 15.1 APPLICABILITY OF ARTICLE.
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Except as otherwise provided in Section 15.2 or as provided pursuant to
Section 3.1 with respect to a particular series of Debt Securities, the Company
may terminate its obligations under the Debt Securities of any series and this
Indenture with respect to Debt Securities of such series as set forth in Section
15.2.
Section 15.2 DEFEASANCE UPON DEPOSIT OF MONEYS OR U.S. GOVERNMENT OBLIGATIONS.
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At the Company's option, either (a) the Company shall be deemed to have been
Discharged (as defined below) from its obligations with respect to Debt
Securities of any series ("legal defeasance option") or (b) the Company shall
cease to be under any obligation to comply with any term, provision or condition
set forth in Sections 10.1, 12.2 and 12.4 with respect to Debt Securities of any
series (and, to the extent so specified pursuant to Section 3.1, any other
obligation of the Company or restrictive covenant added for the benefit of such
series pursuant to Section 3.1) ("covenant defeasance option") at any time after
the applicable conditions set forth below have been satisfied:
(a) The Company shall have deposited or caused to be deposited irrevocably
with the Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of the Debt Securities of
such series (i) money in an amount, or (ii) U.S. Government Obligations (as
defined below) which through the payment of interest and principal in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (iii) a combination
of (i) and (ii), sufficient, in the opinion (with respect to (i) and (ii)) of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge
each installment of principal (including any mandatory sinking fund payments) of
and premium, if any, and interest on, the Outstanding Debt Securities of such
series on the dates such installments of interest or principal and premium are
due;
(b) Such deposit shall not cause the Trustee with respect to the Debt
Securities of that series to have a conflicting interest as defined in Section
6.8 and for purposes of the Trust Indenture Act with respect to the Debt
Securities of any series;
(c) Such deposit will not result in a breach or violation of, or constitute
a default under, this Indenture or any other agreement or instrument to which
the Company is a party or by which it is bound;
(d) If the Debt Securities of such series are then listed on any national
securities exchange, the Company shall have delivered to the Trustee an Opinion
of Counsel or a letter or other document from such exchange to the effect that
the Company's exercise of its option under this Section would not cause such
Debt Securities to be delisted;
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(e) No Event of Default or Default with respect to the Debt Securities of
such series shall have occurred and be continuing on the date of such deposit
and, with respect to the legal defeasance option only, no Event of Default under
Section 5.1(f) or Section 5.1(g) or event which with the giving of notice or
lapse of time, or both, would become an Event of Default under Section 5.1(f) or
Section 5.1(g) shall have occurred and be continuing on the 91st day after such
date (and such defeasance shall not become effective until such 91st day); and
(f) The Company shall have delivered to the Trustee an Opinion of Counsel or
a ruling from the Internal Revenue Service to the effect that the holders of the
Debt Securities of such series will not recognize income, gain or loss for
United States Federal income tax purposes as a result of such deposit,
defeasance or Discharge. Notwithstanding the foregoing, if the Company
exercises its covenant defeasance option and an Event of Default under Section
5.1(f) or Section 5.1(g) or event which, with the giving of notice or lapse of
time, or both, would become an Event of Default under Section 5.1(f) or Section
5.1(g) shall have occurred and be continuing on the 91st day after the date of
such deposit, the obligations of the Company referred to under the definition of
covenant defeasance option with respect to such Debt Securities shall be
reinstated.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Debt Securities of such series (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except (A) the rights of holders of Debt Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of (and premium, if any) and interest on such Debt Securities when
such payments are due, (B) the Company's obligations with respect to the Debt
Securities of such series under Sections 3.4(a), 3.5, 3.6, 12.3 and 15.3 and (C)
the rights, powers, trusts, duties and immunities of the Trustee hereunder.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case under clauses (i) or (ii), are not callable
or redeemable at the option of the issuer thereof, and shall also include
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
Section 15.3 DEPOSITED MONEYS AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD
INTRUST.
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 15.2 in respect of Debt Securities of a series shall be held
in trust and applied by it, in accordance with the
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provisions of such Debt Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the holders of such Debt
Securities, of all sums due and to become due thereon for principal (and
premium, if any) and interest, if any, but such money need not be segregated
from other funds except to the extent required by law.
Section 15.4 REPAYMENT TO COMPANY.
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The Trustee and any Paying Agent shall promptly pay or return to the Company
upon Company Request any moneys or U.S. Government Obligations held by them at
any time that are not required for the payment of the principal of (and premium,
if any) and interest on the Debt Securities of any series for which money or
U.S. Government Obligations have been deposited pursuant to Section 15.2.
The provisions of the last paragraph of Section 12.4 shall apply to any
money held by the Trustee or any Paying Agent under this Article that remains
unclaimed for two years after the Maturity of any series of Debt Securities for
which money or U.S. Government Obligations have been deposited pursuant to
Section 15.2.
ARTICLE 16
CONVERSION
Section 16.1 APPLICABILITY; CONVERSION PRIVILEGE.
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Except as otherwise specified pursuant to Section 3.1 for Debt Securities of
any series, the provisions of this Article 16 shall be applicable to any Debt
Securities that are convertible into Common Stock. If so provided pursuant to
Section 3.1 with respect to the Debt Securities of any series, the holder of a
Debt Security of such series shall have the right, at such holder's option, to
convert, in accordance with the terms of such series of Debt Securities and this
Article 16, all or any part (in a denomination of, unless otherwise specified
pursuant to Section 3.1 with respect to Debt Securities of such series, $1,000
in principal amount or any integral multiple thereof) of such Debt Security into
shares of Common Stock or, as to any Debt Securities called for redemption, at
any time prior to the time and date fixed for such redemption (unless the
Company shall default in the payment of the Redemption Price, in which case such
right shall not terminate at such time and date).
Section 16.2 CONVERSION PROCEDURE; CONVERSION PRICE; FRACTIONAL SHARES.
- -----------------------------------------------------------------------
(a) Each Debt Security to which this Article is applicable shall be
convertible at the office of the Conversion Agent, and at such other place or
places, if any, specified pursuant to Section 3.1 with respect to the Debt
Securities of such series, into fully paid and nonassessable shares (calculated
to the nearest 1/100th of a share) of Common Stock. The Debt Securities will be
converted into shares of Common Stock at the Conversion Price therefor. No
payment or adjustment shall be made in respect of dividends on the Common Stock
or accrued interest on a converted Debt Security except as described in Section
16.9. The Company may, but shall not be required, in connection with any
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conversion of Debt Securities, to issue a fraction of a share of Common Stock
and, if the Company shall determine not to issue any such fraction, the Company
shall, subject to Section 16.3(d), make a cash payment (calculated to the
nearest cent) equal to such fraction multiplied by the Closing Price of the
Common Stock on the last Trading Day prior to the date of conversion.
(b) Before any holder of a Debt Security shall be entitled to convert the
same into Common Stock, such holder shall surrender such Debt Security duly
endorsed to the Company or in blank at the office of the Conversion Agent or at
such other place or places, if any, specified pursuant to Section 3.1, and shall
give written notice to the Company at said office or place that such holder
elects to convert the same and shall state in writing therein the principal
amount of Debt Securities to be converted and the name or names (with addresses)
in which such holder wishes the certificate or certificates for Common Stock to
be issued; provided, however, that no Debt Security or portion thereof shall be
accepted for conversion unless the principal amount of such Debt Security or
such portion, when added to the principal amount of all other Debt Securities or
portions thereof then being surrendered by the holder thereof for conversion,
exceeds the then-effective Conversion Price with respect thereto. If more than
one Debt Security shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock which shall be deliverable
upon conversion shall be computed on the basis of the aggregate principal amount
of the Debt Securities (or specified portions thereof to the extent permitted
thereby) so surrendered. Subject to the next succeeding sentence, the Company
will, as soon as practicable thereafter, issue and deliver at said office or
place to such holder of a Debt Security, or to such holder's nominee or
nominees, certificates for the number of full shares of Common Stock to which
such holder shall be entitled as aforesaid, together, subject to the last
sentence of paragraph (a) above, with cash in lieu of any fraction of a share to
which such holder would otherwise be entitled. The Company shall not be
required to deliver certificates for shares of Common Stock while the stock
transfer books for such stock or the Security Register are duly closed for any
purpose, but certificates for shares of Common Stock shall be issued and
delivered as soon as practicable after the opening of such books or Security
Register. A Debt Security shall be deemed to have been converted as of the
close of business on the date of the surrender of such Debt Security for
conversion as provided above, and the Person or Persons entitled to receive the
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such Common Stock as of the close of business on
such date. In case any Debt Security shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the holder of the Debt Securities so
surrendered, without charge to such holder (subject to the provisions of Section
16.8), a new Debt Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Debt Security.
Section 16.3 ADJUSTMENT OF CONVERSION PRICE FOR COMMON STOCK.
- -------------------------------------------------------------
The Conversion Price with respect to any Debt Security which is convertible
into Common Stock shall be adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time while any of
such Debt Securities are outstanding, (i) pay a dividend in shares of its Common
Stock to holders of Common Stock, (ii) combine its
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outstanding shares of Common Stock into a smaller number of shares of Common
Stock, (iii) subdivide its outstanding shares of Common Stock into a greater
number of shares of Common Stock or (iv) make a distribution in shares of Common
Stock to holders of Common Stock, then the Conversion Price in effect
immediately before such action shall be adjusted so that the holders of such
Debt Securities, upon conversion thereof into Common Stock immediately following
such event, shall be entitled to receive the kind and amount of shares of Common
Stock of the Company which they would have owned or been entitled to receive
upon or by reason of such event if such Debt Securities had been converted
immediately before the record dated (or, if no record date, the effective date)
for such event. An adjustment made pursuant to this Section 16.3(a) shall become
effective retroactively immediately after the record date in the case of a
dividend or distribution and shall become effective retroactively immediately
after the effective date in the case of a subdivision or combination. For the
purposes of this Section 16.3(a), each holder of Debt Securities shall be deemed
to have failed to exercise any right to elect the kind or amount of securities
receivable upon the payment of any such dividend, subdivision, combination or
distribution (provided, that if the kind or amount of securities receivable upon
such dividend, subdivision, combination or distribution is not the same for each
nonelecting share, then the kind and amount of securities or other property
receivable upon such dividend, subdivision, combination or distribution for each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares).
(b) In case the Company shall, at any time or from time to time while any of
such Debt Securities are outstanding, issue rights or warrants to all holders of
shares of its Common Stock entitling them (for a period expiring within 45 days
after the record date for such issuance) to subscribe for or purchase shares of
Common Stock (or securities convertible into shares of Common Stock) at a price
per share less than the Current Market Price of the Common Stock at such record
date (treating the price per share of the securities convertible into Common
Stock as equal to (x) the sum of (i) the price for a unit of the security
convertible into Common Stock and (ii) any additional consideration initially
payable upon the conversion of such security into Common Stock divided by (y)
the number of shares of Common Stock initially underlying such convertible
security), the Conversion Price with respect to such Debt Securities shall be
adjusted so that it shall equal the price determined by dividing the Conversion
Price in effect immediately prior to the date of issuance of such rights or
warrants by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants plus
the number of additional shares of Common Stock offered for subscription or
purchase (or into which the convertible securities so offered are initially
convertible), and the denominator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of securities which the
aggregate offering price of the total number of shares of securities so offered
for subscription or purchase (or the aggregate purchase price of the convertible
securities so offered plus the aggregate amount of any additional consideration
initially payable upon conversion of such securities into Common Stock) would
purchase at such Current Market Price of the Common Stock. Such adjustment
shall become effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
(c) In the case the Company shall, at any time or from time to time while
any of such Debt Securities are outstanding, distribute to all holders of shares
of its Common Stock (including any such distribution
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made in connection with a consolidation or merger in which the Company is the
continuing corporation and the Common Stock is not changed or exchanged) cash,
evidences of its indebtedness, securities or assets (excluding (i) regular
periodic cash dividends in amounts, if any, determined from time to time by the
Board of Directors, (ii) dividends payable in shares of Common Stock for which
adjustment is made under Section 16.3(a) or (iii) rights or warrants to
subscribe for or purchase securities of the Company (excluding those referred to
in Section 16.3(b)), then in each such case the Conversion Price with respect to
such Debt Securities determined by dividing the Conversion Price in effect
immediately prior to the date of such distribution by a fraction, the numerator
of which shall be the Current Market Price of the Common Stock on the record
date referred to below, and the denominator of which shall be such Current
Market Price of the Common Stock less the then fair market value (as determined
by the Board of Directors of the Company, whose determination shall be
conclusive) of the portion of the cash or assets or evidences of indebtedness or
securities so distributed or of such subscription rights or warrants applicable
to one share of Common Stock (provided that such denominator shall never be less
than 1.0); provided, however, that no adjustment shall be made with respect to
any distribution of rights to purchase securities of the Company if a holder of
Debt Securities would otherwise be entitled to receive such rights upon
conversion at any time of such Debt Securities into Common Stock unless such
rights are subsequently redeemed by the Company, in which case such redemption
shall be treated for purposes of this Section as a dividend on the Common Stock.
Such adjustment shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive such
distribution; and in the event that such distribution is not so made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such record date had not been fixed.
(d) The Company shall be entitled to make such additional adjustments in the
Conversion Price, in addition to those required by subsections 16.3(a), 16.3(b),
and 16.3(c), as shall be necessary in order that any dividend or distribution of
Common Stock, any subdivision, reclassification or combination of shares of
Common Stock or any issuance of rights or warrants referred to above shall not
be taxable to the holders of Common Stock for United States Federal income tax
purposes.
(e) In any case in which this Section 16.3 shall require that any adjustment
be made effective as of or retroactively immediately following a record date,
the Company may elect to defer (but only for five (5) Trading Days following the
filing of the statement referred to in Section 16.5) issuing to the holder of
any Debt Securities converted after such record date the shares of Common Stock
and other capital stock of the Company issuable upon such conversion over and
above the shares of Common Stock and other capital stock of the Company issuable
upon such conversion on the basis of the Conversion Price prior to adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(f) All calculations under this Section 16.3 shall be made to the nearest
cent or one-hundredth of a share of security, with one-half cent and 0.005 of a
share, respectively, being rounded upward. Notwithstanding any other provision
of this Section 16.3, the Company shall not be required to make any adjustment
of the Conversion Price unless such adjustment would require an increase or
decrease of at least 1% of such price. Any lessor adjustment shall be carried
forward and
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shall be made at the time of, and together with, the next subsequent adjustment
which, together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% in such price. Any adjustments
under this Section 16.3 shall be made successively whenever an event requiring
such an adjustment occurs.
(g) In the event that at any time, as a result of an adjustment made
pursuant to this Section 16.3, the holder of any Debt Security thereafter
surrendered for conversion shall become entitled to receive any shares of stock
of the Company other than shares of Common Stock into which the Debt Securities
originally were convertible, the Conversion Price of such other shares so
receivable upon conversion of any such Debt Security shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in
subparagraphs (a) through (f) of this Section 16.3, and the provisions of
Sections 16.1, 16.2 and 16.4 through 16.9 with respect to the Common Stock shall
apply on like or similar terms to any such other shares and the determination of
the Board of Directors as to any such adjustment shall be conclusive.
(h) No adjustment shall be made pursuant to this Section: (i) if the effect
thereof would be to reduce the Conversion Price below the par value (if any) of
the Common Stock or (ii) subject to 16.3(e) hereof, with respect to any Debt
Security that is converted prior to the time such adjustment otherwise would be
made.
Section 16.4 CONSOLIDATION OR MERGER OF THE COMPANY.
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In case of either (a) any consolidation or merger to which the Company is a
party, other than a merger or consolidation in which the company is the
surviving or continuing corporation and which does not result in a
reclassification of, or change (other than a change in par value or from par
value to no par value or from no par value to par value, as a result of a
subdivision or combination) in, outstanding shares of Common Stock or (b) any
sale or conveyance of all or substantially all of the property and assets of the
Company to another Person, each Debt Security then outstanding shall be
convertible from and after such merger, consolidation, sale or conveyance of
property and assets into the kind and amount of shares of stock or other
securities and property (including cash) receivable upon such consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
into which such Debt Securities would have been converted immediately prior to
such consolidation, merger, sale or conveyance, subject to adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article Sixteen (and assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the kind or amount of securities,
cash or other property (including cash) receivable upon such consolidation,
merger, sale or conveyance (provided that, if the kind or amount of securities,
cash or other property (including cash) receivable upon such consolidation,
merger, sale or conveyance is not the same for each nonelecting share, then the
kind and amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance for each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares or securities)). The Company
shall not enter into any of the transactions referred to in clause (a) or (b) of
the preceding sentence unless effective provision shall be made so as to give
effect to the provisions set forth in this Section 16.4. The provisions of this
Section 16.4 shall apply similarly to successive consolidations, mergers, sales
or conveyances.
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Section 16.5 NOTICE OF ADJUSTMENT.
- ----------------------------------
Whenever an adjustment in the Conversion Price with respect to a series of
Debt Securities is required:
(a) the Company shall forthwith place on file with the Trustee and any
Conversion Agent for such Securities a certificate of the Treasurer of the
Company, stating the adjusted Conversion Price determined as provided herein and
setting forth in reasonable detail such facts as shall be necessary to show the
reason for and the manner of computing such adjustment, such certificate to be
conclusive evidence that the adjustment is correct; and
(b) a notice stating that the Conversion Price has been adjusted and setting
forth the adjusted Conversion Price shall forthwith be given by the Company, or
at the Company's request, by the Trustee in the name and at the expense of the
Company, in the manner provided in Section 18.2. Any notice so given shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice.
Section 16.6 NOTICE IN CERTAIN EVENTS.
- --------------------------------------
In case:
(a) of a consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale or
conveyance to another Person or entity or group of Persons or entities acting in
concert as a partnership, limited partnership, syndicate or other group (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
of all or substantially all of the property and assets of the Company; or
(b) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(c) of any action triggering an adjustment of the Conversion Price pursuant
to this Article Sixteen;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent for the applicable Debt Securities, and shall cause to be
given, to the holders of record of applicable Debt Securities in the manner
provided in Section 17.2, at least fifteen (15) days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Conversion Price pursuant to this Article
Sixteen, or, if a record is not to be taken, the date as of which the holders of
record or Common Stock entitled to such distribution, rights or warrants are to
be determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article 16 is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up.
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Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (a), (b), or (c) of
this Section.
Section 16.7 COMPANY TO RESERVE STOCK; REGISTRATION; LISTING.
- -------------------------------------------------------------
(a) The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued shares of Common Stock,
for the purpose of effecting the conversion of the Debt Securities, such number
of its duly authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all applicable outstanding Debt
Securities into such Common Stock at any time (assuming that, at the time of the
computation of such number of shares or securities, all such Debt Securities
would be held by a single holder); provided, however, that nothing contained
herein shall preclude the Company from satisfying its obligations in respect of
the conversion of the Debt Securities by delivery of purchased shares of Common
Stock which are held in the treasury of the Company. The Company shall from
time to time, in accordance with the laws of the State of Delaware, use its best
efforts to cause the authorized amount of the Common Stock to be increased if
the aggregate of the authorized amount of the Common Stock remaining unissued
and the issued shares of such Common Stock in its treasury (other than any such
shares reserved for issuance in any other connection) shall not be sufficient to
permit the conversion of all Debt Securities.
(b) If any shares of Common Stock which would be issuable upon conversion of
Debt Securities hereunder require registration with or approval of any
governmental authority before such shares or securities may be issued upon such
conversion, the Company will in good faith and as expeditiously as possible
endeavor to cause such shares or securities to be duly registered or approved,
as the case may be. The Company will endeavor to list the shares of Common
Stock required to be delivered upon conversion of the Debt Securities prior to
such delivery upon the principal national securities exchange upon which the
outstanding Common Stock is listed at the time of such delivery.
Section 16.8 TAXES ON CONVERSION.
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The Company shall pay any and all documentary, stamp or similar issue or
transfer taxes that may be payable in respect of the issue or delivery of shares
of Common Stock on conversion of Debt Securities pursuant hereto. The Company
shall not, however, be required to pay any such tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock or the portion, if any, of the Debt Securities which are not so converted
in a name other than that in which the Debt Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of such tax or
has established to the satisfaction of the Company that such tax has been paid.
Section 16.9 CONVERSION AFTER RECORD DATE.
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If any Debt Securities are surrendered for conversion subsequent to the
record date preceding an Interest Payment Date but on or prior to such Interest
Payment Date (except Debt Securities called for redemption on a Redemption Date
between such record date and Interest
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<PAGE>
Payment Date), the holder of such Debt Securities at the close of business on
such record date shall be entitled to receive the interest payable on such Debt
Securities on such Interest Payment Date notwithstanding the conversion thereof.
Debt Securities surrendered for conversion during the period from the close of
business on any record date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date shall (except in the case of
Debt Securities which have been called for redemption on a Redemption Date
within such period) be accompanied by payment in New York Clearing House funds
or other funds of an amount equal to the interest payable on such Interest
Payment Date on the Debt Securities being surrendered for conversion. Except as
provided in this Section 16.9, no adjustments in respect of payments of interest
on Debt Securities surrendered for conversion or any dividends or distributions
of interest on the Common Stock issued upon conversion shall be made upon the
conversion of any Debt Securities.
Section 16.10 COMPANY DETERMINATION FINAL.
- ------------------------------------------
Any determination that the Company or the Board of Directors must make
pursuant to this Article is conclusive.
Section 16.11 TRUSTEE'S DISCLAIMER.
- -----------------------------------
The Trustee has no duty to determine when an adjustment under this Article
should be made, how it should be made or what it should be. The Trustee makes
no representation as to the validity or value of any securities or assets issued
upon conversion of Debt Securities. The Trustee shall not be responsible for
the Company's failure to comply with this Article. Each Conversion Agent other
than the Company shall have the same protection under this Section as the
Trustee.
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ARTICLE 17
MISCELLANEOUS
Section 17.1 NOTICES, ETC., TO TRUSTEE AND COMPANY.
- ---------------------------------------------------
Any Act of holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(a) the Trustee by any holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing to or with the Trustee at its Corporate
Trust Office, Attention: Corporate Trust Department, or
(b) the Company by the Trustee or by any holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid or airmail postage prepaid if
sent from outside the United States, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
instrument, to the attention of its
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<PAGE>
Treasurer, or at any other address previously furnished in writing to the
Trustee by the Company.
Any such Act or other document shall be in the English language, except that
any published notice may be in an official language of the country of
publication.
Section 17.2 NOTICE TO HOLDERS; WAIVER.
- ---------------------------------------
When this Indenture provides for notice to holders of any event, such notice
shall be sufficiently given to holders (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to such holders
as their names and addresses appear in the Security Register, within the time
prescribed; provided, however, that, in any case, any notice to holders of
Floating Rate Securities regarding the determination of a periodic rate of
interest, if such notice is required pursuant to Section 3.1, shall be
sufficiently given if given in the manner specified pursuant to Section 3.1.
In the event of suspension of regular mail service or by reason of any other
cause it shall be impracticable to give notice by mail, such notification as
shall be given with the approval of the Trustee shall constitute sufficient
notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspapers or by
reason of any other cause it shall be impracticable to give notice by
publication, such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
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 on 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 any case
where notice to holders is given by publication, any defect in any notice so
published as to any particular holder shall not affect the sufficiency of such
notice with respect to other holders, and any notice which is published in the
manner herein provided shall be conclusively presumed to have been duly given.
Section 17.3 CONFLICT WITH TRUST INDENTURE ACT.
- -----------------------------------------------
If any provision hereof limits, qualifies or conflicts with the duties
imposed on any person by the provisions of Sections 310 to 317, inclusive, of
the Trust Indenture Act, such imposed duties shall control.
Section 17.4 COUNTERPARTS; EFFECT OF HEADINGS AND TABLE OF CONTENTS.
- --------------------------------------------------------------------
This Indenture may be executed in any number of counterparts, each of which
when executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same
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Indenture. The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 17.5 SUCCESSORS AND ASSIGNS.
- ------------------------------------
All covenants and agreements in this Indenture by the parties hereto shall
bind their respective successors and assigns and inure to the benefit of their
permitted successors and assigns, whether so expressed or not.
Section 17.6 SEPARABILITY CLAUSE.
- ---------------------------------
In case any provision in this Indenture or in the Debt Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 17.7 BENEFITS OF INDENTURE.
- -----------------------------------
Nothing in this Indenture or in the Debt Securities, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent and their successors hereunder, and the holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
Section 17.8 GOVERNING LAW.
- ---------------------------
This Indenture and the Debt Securities shall be deemed to be contracts made
and to be performed entirely in the State of California, and for all purposes
shall be governed by and construed in accordance with the internal laws of said
State without regard to the conflicts of law rules of said State.
Section 17.9 LEGAL HOLIDAYS.
- ----------------------------
Unless otherwise specified pursuant to Section 3.1 or in any Debt Security,
in any case where any Interest Payment Date, Redemption Date or Stated Maturity
of any Debt Security of any series shall not be a Business Day at any Place of
Payment for the Debt Securities of that series, then (notwithstanding any other
provision of this Indenture or of the Debt Securities) payment of principal (and
premium, if any) or interest need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date,
Redemption Date or at the Stated Maturity, and no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to such Business Day if
such payment is made or duly provided for on such Business Day.
Section 17.10 NO RECOURSE AGAINST OTHERS.
- -----------------------------------------
No direct or indirect incorporator, employee, stockholder, director or
officer, as such, past, present or future of the Company or
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<PAGE>
any successor corporation or any of the Company's Affiliates, shall have any
personal liability in respect of the obligations of the Company under the Debt
Securities or this Indenture, either directly or through the Company, by reason
of his, her or its status as such incorporator, stockholder, employee, director
or officer. Each holder by accepting a Debt Security waives and releases all
such liability. Such waiver and release are part of the consideration for the
issuance of the Debt Securities.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
METRO-GOLDWYN-MAYER INC.
By:
---------------------------
Name:
---------------------------
Title:
-------------------------
[SEAL]
Attest:
By:
------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[NAME OF TRUSTEE], as Trustee
By:
------------------------------------------------------
Name:
-----------------------------------------------------
Title:
----------------------------------------------------
[SEAL]
Attest:
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
81
<PAGE>
EXHIBIT A
[FORM OF REDEEMABLE OR NONREDEEMABLE DEBT SECURITY]
[FACE OF DEBT SECURITY]
[THIS DEBT SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS DEBT SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY DEBT SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR
OR IN LIEU OF, THIS DEBT SECURITY SHALL BE A GLOBAL NOTE SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.]
[IF THIS DEBT SECURITY IS AN ORIGINAL ISSUE DISCOUNT DEBT SECURITY,
INSERT--FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS DEBT SECURITY IS
_____% OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS __________, 20__ [AND] THE
YIELD TO MATURITY IS ____ %. THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL PERIOD OF __________, 20__ TO
________, 20__, IS ____% OF THE PRINCIPAL AMOUNT OF THIS DEBT SECURITY.]
METRO-GOLDWYN-MAYER INC. [DESIGNATION OF SERIES]
No.__________ $__________
METRO-GOLDWYN-MAYER INC., a Delaware corporation (herein referred to as the
"Company," which term includes any successor corporations under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to _____________________ or registered assigns the principal sum of
_____________________ Dollars on ___________ (the "Stated Maturity Date") [OR
INSERT DATE FIXED FOR EARLIER REDEMPTION (the "Redemption Date" and, together
with the Stated Maturity Date with respect to principal repayable on such date,
the "Maturity Date")].
[IF THE DEBT SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT--and to
pay interest thereon from _____________________ or from the most recent interest
payment date to which interest has been paid or duly provided for, semi-annually
on _________________ and ________________ in each year (each, an "Interest
Payment Date"), commencing _________________, at the rate of _____% per annum,
until the principal hereof is paid or duly provided for. The interest so
payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Holder in whose name this Debt Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which shall be the _______________ or _______________ (whether or not
a Business Day, as defined below), as the case may be, next preceding such
Interest Payment Date [at the office or agency of the Company maintained for
such purpose; PROVIDED, HOWEVER, that such interest may be paid, at the
Company's option, by mailing a check to such Holder at his or her registered
address or by transfer of funds to an account maintained by such Holder within
the United States]. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Holder in whose name this Debt Security (or one or
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<PAGE>
more Predecessor Debt Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Debt Securities of this
series not less than 15 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Debt Securities of this series may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Interest will be computed on the basis of a
360-day year of twelve 30-day months.]
[IF THE DEBT SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT-- The
principal of this Debt Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at the
[Stated] Maturity Date and in such case the overdue principal of this Debt
Security shall bear interest at the rate of _________% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue principal
shall be payable on demand. Any such interest on any overdue principal that is
not so paid on demand shall bear interest at the rate of _____% per annum (to
the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such demand for payment to the date payment
of such interest has been made or duly provided for, and such interest shall
also be payable on demand.]
The principal of this Debt Security payable on the [Stated] Maturity Date [or
the principal of, premium, if any, and, if the Redemption Date is not an
Interest Payment Date, interest on this Debt Security payable on the Redemption
Date] will be paid against presentation of this Debt Security at the office or
agency of the Company maintained for that purpose in ____________, in such coin
or currency of the United States as at the time of payment is legal tender for
the payment of public and private debts.
Interest payable on this Debt Security on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date, as the case may be,] will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ____________, if no interest has been paid on this Debt Security) to
but excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date, as the case may be]. If any Interest Payment Date or the
[Stated] Maturity Date [or Redemption Date] falls on a day that is not a
Business Day, principal, premium, if any, and/or interest payable with respect
to such Interest Payment Date or [Stated] Maturity Date [or Redemption Date, as
the case may be,] will be paid on the next succeeding Business Day with the same
force and effect as if it were paid on the date such payment was due, and no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or [Stated] Maturity Date [or Redemption Date, as the
case may be]. "Business Day" means any day, other than a Saturday or Sunday, on
which banking institutions or trust companies in [__________] are authorized to
close.
[IF THIS DEBT SECURITY IS A GLOBAL DEBT SECURITY, INSERT--All payments of
principal, premium, if any, and interest in respect of this Debt Security will
be made by the Company in immediately available funds.]
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<PAGE>
Reference is hereby made to the further provisions of this Debt Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature of one of its authorized signatories, this Debt
Security shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its [facsimile] corporate seal.
Dated _________________ METRO-GOLDWYN-MAYER INC.
By:
--------------------------
Name:
Title:
Attest:
By:
--------------------------
Name:
Title:
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<PAGE>
[Reverse of Debt Security]
METRO-GOLDWYN-MAYER INC.
This Debt Security is one of a duly authorized issue of securities of the
Company, issued and to be issued in one or more series under an Indenture, dated
as of ___________, 2000 (herein called the "Indenture") between the Company and
__________________, as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture with respect to the series of which
this Debt Security is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Debt Securities, and of the terms upon which
the Debt Securities are, and are to be, authenticated and delivered. This Debt
Security is one of the duly authorized series of Debt Securities designated on
the face hereof (collectively, the "Debt Securities"), [IF APPLICABLE, INSERT--
and the aggregate principal amount of the securities to be issued under such
series is limited to $________ (except for Debt Securities authenticated and
delivered upon transfer of, or in exchange for, or in lieu of other Debt
Securities).] All terms used in this Debt Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
If an Event of Default shall occur and be continuing, the principal of the
Debt Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture.
[IF APPLICABLE, INSERT--The Debt Securities may not be redeemed prior to the
[Stated] Maturity Date.]
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<PAGE>
[IF APPLICABLE, INSERT--The Debt Securities are subject to redemption [(a) [IF
APPLICABLE, INSERT--on ______________ in any year commencing with the year ____
and ending with the year ____ through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount and (b)] [IF
APPLICABLE, INSERT--at any time [on or after _______________], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed on or before
___________, ____% and if redeemed during the 12-month period beginning
______________ of the years indicated, at the Redemption Prices indicated below.
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together, in the case of any such redemption [IF APPLICABLE, INSERT--(whether
through operation of the sinking fund or otherwise)], with accrued interest to
the Redemption Date; PROVIDED, HOWEVER, that installments of interest on this
Debt Security whose Stated Maturity is on or prior to such Redemption Date will
be payable to the Holder of this Debt Security, or one or more Predecessor Debt
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.]
[IF APPLICABLE, INSERT--The Debt Securities are subject to redemption (a) on
____________ in any year commencing with the year ____ and ending with the year
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below and (b) at any time on or
after __________], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below:
If redeemed during the 12-month period beginning of the years indicated,
Redemption Price for Redemption
Otherwise Than Through Redemption Price for Redemption
Operation of the Sinking Fund Through Operation of Sinking Fund
Year
- ----------------------------- ---------------------------------
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<PAGE>
and thereafter at a Redemption Price equal to ___% of the principal amount,
together, in the case of any such redemption (whether through operation of the
sinking fund or otherwise), with accrued interest to the Redemption Date;
PROVIDED, HOWEVER, that installments of interest on this Debt Security whose
Stated Maturity is on or prior to such Redemption Date will be payable to the
Holder of this Debt Security, or one or more Predecessor Debt Securities, of
record at the close of business on the relevant record dates referred to on the
face hereof, all as provided in the Indenture.]
[IF APPLICABLE, INSERT--Notwithstanding the foregoing, the Company may not,
prior to __________ redeem any Debt Securities as contemplated by [clause (b)
of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of money borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than ____% per annum.]
[IF APPLICABLE, INSERT--The sinking fund for the Debt Securities provides for
the redemption on __________ in each year, beginning with the year ____ and
ending with the year ____, of [not less than] $___] [("mandatory sinking fund")
and not more than $_______] aggregate principal amount of the Debt Securities.
[The Debt Securities acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made in the [DESCRIBE ORDER]
order in which they become due.]]
Notice of redemption will be given by mail to Holders of Debt Securities, not
less than 30 nor more than 60 days prior to the Redemption Date, all as provided
in the Indenture.
In the event of redemption of the Debt Security in part only, a new Debt
Security or Debt Securities for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.
[IF APPLICABLE, INSERT CONVERSION PROVISIONS SET FORTH IN ANY BOARD
RESOLUTION OR INDENTURE SUPPLEMENTAL TO THE INDENTURE.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of
not less than at least a majority of the aggregate principal amount of all Debt
Securities issued under the indenture at the time Outstanding and affected
thereby. The Indenture also contains provisions permitting the Holders of not
less than at least a majority of the aggregate principal amount of the
Outstanding Debt Securities, on behalf of the Holders of all such Debt
Securities, to waive compliance by the Company with certain provisions of the
Indenture. Furthermore, provisions in the Indenture permit the Holders of not
less than at least a majority of the aggregate principal amount, in certain
instances, of the Outstanding Debt Securities of any series to waive, on behalf
of all of the Holders of Debt Securities of such series, certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Debt Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Debt Security and other Debt Securities
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Debt Security.
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No reference herein to the Indenture and no provision of this Debt Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Debt Security at the times, rates and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein [and
herein] set forth, the transfer of this Debt Security is registrable in the
Security Register of the Company upon surrender of this security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this Debt Security
are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new Debt Securities, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations therein [and
herein] set forth, this Debt Security is exchangeable for a like aggregate
principal amount of Debt Securities of different authorized denominations but
otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.
The Debt Securities of this series are issuable only in registered form
[without coupons] in denominations of $________ and any integral multiple
thereof. No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. Prior to
due presentment of this Debt Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Debt Security is registered as the owner hereof for all
purposes, whether or not this Debt Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium, if
any, or the interest on this Debt Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any past, present or future
incorporator, stockholder, employee, officer or director, as such, of the
Company or of any successor or Affiliate of the Company, either directly or
through the Company or any successor, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
[IF APPLICABLE, INSERT--The obligations of the Company under the Indenture
shall be secured as set forth in the Indenture.]
The Indenture and the Debt Securities shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed entirely in such State.
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the series of Debt Securities issued under the within-mentioned
Indenture.
[NAME OF TRUSTEE], as Trustee
By
-------------------------------
Authorized Signatory
89
<PAGE>
EXHIBIT 12
Metro-Goldwyn-Mayer Inc.
Ratio of Earnings to Fixed Charges (1)
<TABLE>
<CAPTION>
Year Ended January 1 to October 11 to Year Ended December 31,
December 31, October 10, December 31, ----------------------------------
1995 1996 1996 1997 1998 1999
------------ ------------ ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Pre-tax income (loss) before income taxes $(168,374) $(744,765) $ 4,512 $(117,769) $(147,467) $(521,109)
Fixed Charges:
Gross interest expense 87,844 75,487 10,399 68,347 97,386 102,290
Interest factor on rental expense 655 672 248 1,041 1,192 1,426
----------------------------------------------------------------------------------
Total Fixed Charges 88,539 76,159 10,647 69,388 98,578 103,716
Add: amortization of capitalized interest 8,290 11,234 - 1,544 8,356 10,798
Less: capitalized interest (21,498) (4,112) (524) (15,242) (16,775) (15,845)
----------------------------------------------------------------------------------
Total earnings (loss) $ (93,043) $(661,484) $14,635 $ (62,079) $ (57,308) $(422,440)
----------------------------------------------------------------------------------
Ratio of Earnings to Fixed Charges (1.05) (8.69) 1.37 (0.89) (0.58) (4.07)
==================================================================================
Deficiency For One-to-One Coverage $ 181,582 $ 737,643 $ - $ 131,467 $ 155,886 $ 526,156
==================================================================================
</TABLE>
(1) The calculation of "Fixed Charges" does not include MGM's share of interest
costs of its unconsolidated affiliates due to immateriality.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Metro-Goldwyn-Mayer Inc.:
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 1, 2000
in Metro-Goldwyn-Mayer Inc.'s Form 10-K for the year ended December 31, 1999 and
to all references to our Firm included in this registration statement.
Arthur Andersen LLP
Los Angeles, California
April 28, 2000
