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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 28, 1994
REGISTRATION NO. 33-55227
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNITED COMPANIES FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
LOUISIANA
(State or other jurisdiction of incorporation or 71-0430414
organization) (I.R.S. Employer Identification Number)
4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70809
(504) 924-6007
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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DALE E. REDMAN
CHIEF FINANCIAL OFFICER
4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70809
(504) 924-6007
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
REED D. AUERBACH, ESQ. LEE C. KANTROW, ESQ. PETER J. GORDON, ESQ.
STROOCK & STROOCK & LAVAN KANTROW, SPAHT, WEAVER & BLITZER SIMPSON THACHER & BARTLETT
SEVEN HANOVER SQUARE (A PROFESSIONAL LAW CORPORATION) 425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10004-2696 POST OFFICE BOX 2997 NEW YORK, NEW YORK 10017-3909
BATON ROUGE, LOUISIANA 70821-2997
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If 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, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. /X/
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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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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED SEPTEMBER 28, 1994
PROSPECTUS
UNITED COMPANIES FINANCIAL CORPORATION
DEBT SECURITIES AND PREFERRED STOCK
United Companies Financial Corporation ("UCFC" or the "Company") may offer
from time to time, together or separately, (i) its unsecured debt securities,
which may be either senior (the "Senior Debt Securities") or subordinated (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities,
the "Debt Securities"), and (ii) shares of its preferred stock, par value $2.00
per share (the "Preferred Stock"), (the Debt Securities and the Preferred Stock
are collectively referred to herein as the "Securities"), in amounts, at prices
and on terms to be determined at the time of the offering thereof. The
Subordinated Debt Securities and Preferred Stock may be convertible or
exchangeable into other series of Debt Securities or shares of the common stock,
par value $2.00 per share, of the Company (the "Common Stock"). The Securities
offered pursuant to this Prospectus may be issued in one or more series or
issuances the aggregate offering price of which will not exceed $200,000,000 (or
the equivalent thereof if the Debt Securities are denominated in one or more
foreign currencies or foreign currency units).
The specific terms of the Securities in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in an accompanying
supplement to this Prospectus (each, a "Prospectus Supplement"), including,
where applicable (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking as Senior Debt Securities or Subordinated
Debt Securities, authorized denominations, maturity, any premium, rate or method
of calculation of interest, if any, and dates for payment thereof, any terms for
optional or mandatory redemption, any sinking fund provisions, any terms for
conversion or exchange into other series of Debt Securities or Common Stock and
any other special terms, and (ii) in the case of the Preferred Stock, the
specific designation, the aggregate number of shares offered, the dividend rate
(or method of calculation thereof), the dividend period and dividend payment
dates, whether such dividends will be cumulative or noncumulative, the
liquidation preference, voting rights, if any, any terms for optional or
mandatory redemption, any terms for conversion or exchange into other series of
Debt Securities or Common Stock and any other special terms. If so specified in
the applicable Prospectus Supplement, Debt Securities of a series may be issued
in whole or in part in the form of one or more temporary or permanent global
securities.
The Senior Debt Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Company. The Subordinated Debt Securities will
be subordinate in right of payment to all existing and future Senior
Indebtedness (as defined herein) of the Company.
The Securities may be sold (i) through underwriting syndicates represented
by managing underwriters, or by underwriters without a syndicate, with such
underwriters to be designated at the time of sale; (ii) through agents
designated from time to time; or (iii) directly by the Company. The names of any
underwriters or agents of UCFC involved in the sale of the Securities, the
public offering price or purchase price thereof, any applicable commissions or
discounts, any other terms of the offering of such Securities and the net
proceeds to the Company from such sale, will be set forth in the applicable
Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1994.
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THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA
(THE "NORTH CAROLINA INSURANCE COMMISSIONER") NOR HAS THE NORTH CAROLINA
INSURANCE COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
LOUISIANA INSURANCE LAWS AND REGULATIONS PROVIDE THAT NO PERSON MAY
ACQUIRE CONTROL OF THE COMPANY AND THUS INDIRECT CONTROL OF ITS LOUISIANA
DOMICILED INSURANCE SUBSIDIARIES, UNITED COMPANIES LIFE INSURANCE COMPANY AND
UNITED GENERAL TITLE INSURANCE COMPANY, UNLESS SUCH PERSON HAS PROVIDED CERTAIN
REQUIRED INFORMATION TO THE INSURANCE COMMISSIONER OF THE STATE OF LOUISIANA
AND SUCH ACQUISITION HAS BEEN APPROVED BY THE INSURANCE COMMISSIONER OF THE
STATE OF LOUISIANA, AFTER PUBLIC HEARING. UNDER LOUISIANA INSURANCE LAWS AND
REGULATIONS, ANY PERSON WHO OWNS, CONTROLS OR HAS THE POWER TO VOTE 10% OR MORE
OF THE VOTING SECURITIES OF A CORPORATION IS PRESUMED TO HAVE CONTROL OF THAT
CORPORATION AND ITS SUBSIDIARIES. A SECURITY WHICH IS CONVERTIBLE INTO OR
EVIDENCES A RIGHT TO ACQUIRE A VOTING SECURITY IS VIEWED AS A VOTING SECURITY.
CONSEQUENTLY, NO PURCHASER IN THIS OFFERING MAY ACQUIRE, DIRECTLY OR
INDIRECTLY, AN AMOUNT OF VOTING SECURITY WHICH WOULD BRING SUCH PURCHASER'S
TOTAL HOLDINGS TO 10% OR MORE OF THE VOTING SECURITIES OF THE COMPANY, UNLESS
SUCH PURCHASER HAS PROVIDED THE REQUIRED INFORMATION TO THE INSURANCE
COMMISSIONER OF THE STATE OF LOUISIANA AND THE ACQUISITION HAS BEEN APPROVED BY
THE INSURANCE COMMISSIONER OF THE STATE OF LOUISIANA.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1993;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994 and June 30, 1994; and
(c) The description of the Company's Preferred Share Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed on
August 5, 1994.
All reports and any definitive proxy or information statements filed by
the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to he incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
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THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO DALE E. REDMAN, CHIEF FINANCIAL OFFICER, UNITED COMPANIES FINANCIAL
CORPORATION, 4041 ESSEN LANE, BATON ROUGE, LOUISIANA 70809. TELEPHONE REQUESTS
MAY BE DIRECTED TO MR. REDMAN AT (504) 924-6007.
AVAILABLE INFORMATION
UCFC is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the following public reference
facilities maintained by the Commission: Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; Seven World Trade Center, Suite 1300, New
York, New York 10048; and the Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material may
also be obtained by mail from the Public Reference Section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
upon payment of prescribed rates. In addition, reports, proxy statements and
other information concerning UCFC may be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement filed by
the Company with the Commission on Form S-3 under the Securities Act of 1933,
as amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement and related exhibits for further information
with respect to the Company and the securities offered hereby. Statements
contained herein concerning the provisions of any document are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference. These documents may be inspected without charge at the office of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies may be obtained at fees and charges prescribed by the
Commission.
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THE COMPANY
GENERAL
The Company, founded in 1946, is a financial services holding company
having mortgage and insurance operations. The Company's mortgage operations
are focused on the origination, sale and servicing of first mortgage,
non-conventional, home equity loans. The Company's financial performance has
improved in recent years primarily as a result of its increased loan production
and its reduced cost of funding due to the Company-sponsored public mortgage
loan securitization transactions. The Company's strategy for increasing loan
production includes continued geographic expansion, the introduction of new
loan products and wholesale loan originations and acquisitions. Home equity
loan production in 1993, 1992 and 1991 was $540 million, $301 million and $254
million, respectively. Home equity loan production for the first six months of
1994 was $425 million compared to $210 million for the same period of 1993.
The Company believes its securitization strategy improves its access to funding
and thereby provides a distribution outlet capable of purchasing the Company's
expanded home equity loan production. Increased loan production and
securitization are the primary reasons that the operating income before income
taxes of the Company's mortgage operations rose from $4.4 million in 1991 to
$24.0 million in 1992 to $46.3 million in 1993. The Company's insurance
operations sell primarily single premium deferred annuities marketed in 47
states, the District of Columbia and Puerto Rico and underwrite primarily
residential title insurance in 28 states. For additional information regarding
the Company's operations by business segment, see "Selected Financial and Other
Data" herein and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" herein and in the Company's Annual Report on Form
10-K for the year ended December 31, 1993 and the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1994.
The Company is incorporated in the State of Louisiana, its headquarters
is located at 4041 Essen Lane, Baton Rouge, Louisiana 70809, and its telephone
number is (504) 924-6007. As of June 30, 1994, the Company had approximately
1,300 employees.
MORTGAGE OPERATIONS
United Companies Lending Corporation ("UC Lending" or "UCLC"), the
Company's wholly owned mortgage subsidiary, originates, sells and services
primarily first mortgage, non-conventional, home equity loans which are
typically not loans for the purchase of homes. These loans are made primarily
to individuals who may not otherwise qualify for conventional loans which are
readily marketable to government-sponsored mortgage agencies or conduits and
available through most commercial banks and many other lending institutions.
The weighted average interest rate and the weighted average loan origination
fee on UC Lending home equity loans originated during 1993 were 11.8% and 7.0%,
respectively, and for such loans originated during the first six months of
1994, were 11.3% and 6.0%, respectively. The Company attributes these loan
terms to its belief that its customers generally place a higher priority on the
amount of the monthly payment and prompt credit approval than on the interest
rate and origination fees associated with the loan. Further, borrowers of
non-conventional loans may present a greater credit risk and generally pay
higher interest rates and loan origination fees. Management of the Company
believes that any greater credit risk arising out of making loans to these
borrowers is compensated by higher fees and interest rates. The average home
equity loan amount at origination was approximately $39,000 during 1993, up
from $28,000 during 1992, and increased to $42,000 during the first six months
of 1994. This increase has been due primarily to an expansion into geographic
areas where home values are higher, a de-emphasis of second mortgage loans, an
expansion of loan product lines and the introduction of a wholesale loan
production program. UC Lending originated $531 million of first mortgage home
equity loans in 1993, up 88% from $283 million in 1992 and originated $419
million of first mortgage home equity loans during the first six months of 1994
compared to $205 million for the same period of 1993. Loan originations are
accomplished primarily through a retail branch network. During the third
quarter of 1992, UC Lending initiated a wholesale loan network of
correspondents and brokers through a division operating under the registered
servicemark UNICOR Mortgage(R) ("UNICOR"). The Company has expanded this
division which, as of June 30, 1994, was operating in 18 states. The Company
plans to further expand UNICOR on a selective basis into other states. UNICOR
offers fixed and adjustable rate home equity loans to borrowers of a credit
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quality comparable to borrowers who typically receive loans through the
Company's branch network. Loans may be secured by one or more single family,
owner-occupied or non-owner occupied, and multi-family properties. A network
of field account executives solicit qualifying loans from mortgage
correspondents and brokers within target markets by employing a combination of
direct solicitation, participation in seminars, trade shows and conventions, as
well as advertising directed at the mortgage lender/broker market. During
late 1993, UC Lending began another wholesale loan network which offers the
same products as the UNICOR program to banks and other financial institutions
through its division operating under the registered servicemark GINGER MAE SM,
application pending for Federal registration, the acronym for the Good Neighbor
Reinvestment Mortgage Assistance Loan Program. This program is intended to
permit participating institutions to originate loans to borrowers who do not
qualify for conventional credit. Loans purchased by UC Lending under this
program are underwritten by UC Lending personnel prior to approval and funding
under the same guidelines as those utilized by UNICOR. As of June 30, 1994,
GINGER MAE SM had 38 financial institutions in 5 states participating in the
GINGER MAE SM program. The Company has formed two separate subsidiaries and
intends at a future date to operate the UNICOR and GINGER MAE SM divisions
through these separate subsidiaries.
Historically, most of the Company's home equity loans were held or sold
to financial institutions. Since the fourth quarter of 1991, however, the
secondary mortgage market's growing acceptance of mortgage-backed securities
based on non-conventional home equity loans has allowed the Company to pool
large numbers of loans for sale as mortgage-backed securities. In late 1991
and in 1992, this was accomplished primarily through private placement
transactions. The weighted average interest spread on loans sold to third
parties (the difference between the stated rate on the loan and the rate paid
to purchasers, less certain recurring fees) ranged from 4.56% in 1992 to 6.06%
in 1993 to 4.88% in the six months ended June 30, 1994. During 1993 and in the
first six months of 1994, UC Lending securitized and sold publicly $451 million
and $440 million of home equity loans, respectively, through a
Company-sponsored shelf registration statement which has been amended to cover
an additional $3 billion principal amount of mortgage-backed securities. The
weighted average interest spread on loans sold is determined without regard to
expected credit losses. Therefore, the spread is not impacted by projected or
actual credit losses. Such securitization transactions are credit enhanced and
have received ratings of "Aaa" from Moody's Investors Service, Inc. and "AAA"
from Standard & Poor's Ratings Group, a division of McGraw Hill, Inc. The
Company presently intends to effect securitization transactions on a quarterly
basis, but the amount and timing of sales of securities under the shelf
registration statement will depend upon market and other conditions affecting
the operations of the Company. Servicing rights are retained on substantially
all loans sold, and as of June 30, 1994, UC Lending serviced approximately
46,000 home equity loans having an aggregate principal balance of approximately
$1.4 billion. The ability of the Company to sell loans and/or mortgage-backed
securities in the secondary market is essential for continuation of the
Company's loan origination operations. A prolonged, substantial reduction in
the size of the secondary market for home equity loans may adversely affect the
Company's ability to sell its loan originations and/or mortgage-backed
securities in the secondary market with consequent adverse impact on the
Company's profitability and future originations. Moreover, market and other
considerations could affect the timing of the Company's securitization
transactions and delays in such sales could reduce the amount of gains
recognized from the sale of loans in a given quarter.
The Company derives a significant portion of its income by realizing
gains upon the sale of loans due to the excess servicing income of such loans.
Excess servicing income represents the excess of the interest rate payable by a
borrower on a loan over the interest rate passed through to the investor
acquiring an interest in such loan, less the Company's normal servicing fee and
other applicable recurring fees. When loans are sold, the Company recognizes
as current income the present value of the excess servicing income expected to
be realized over the anticipated average life of loans sold less future
estimated credit losses relating to the loans sold. At June 30, 1994, the
Company's balance sheet reflected capitalized excess servicing income of
approximately $149 million and an allowance for loss on loans serviced of
approximately $20.5 million. The capitalized excess servicing income is
computed using prepayment, default and interest rate assumptions that the
Company believes market participants would use for similar instruments at the
time of sale. The weighted average discount rate used to determine the present
value of the balance of capitalized excess servicing income on home equity
loans reflected on the Company's balance sheet at June 30, 1994, was
approximately 9.9%. The Company is not aware of an active market for this kind
of receivable. No assurance can be given that this receivable could in fact be
sold at its stated value on the balance sheet.
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Capitalized excess servicing income is amortized over the lesser of the
estimated or actual remaining life of the underlying loans as an offset against
the excess servicing income component of servicing income actually received in
connection with such loans. Although management of the Company believes that
it has made reasonable estimates of the excess servicing income likely to be
realized, it should be recognized that the rate of prepayment and the amount of
defaults utilized by the Company are estimates and actual experience may vary
from these estimates. The Company periodically reviews its prepayment
assumptions in relation to current rates of prepayment and, if necessary,
writes down the remaining asset to the net present value of the estimated
remaining future excess servicing income. Rapid increases in interest rates or
competitive pressures may result in a reduction of excess servicing income,
thereby reducing the gains recognized by the Company upon the sale of loans in
the future.
The gain recognized by the Company upon sale of loans will have been
overstated if the excess servicing income actually received by the Company is
less than originally assumed. An acceleration of future prepayments could
result in capitalized excess servicing income amortization expense exceeding
realized excess servicing income, thereby adversely affecting the Company's
servicing income and resulting in a charge to earnings in the period of
adjustment. Likewise, if delinquencies or liquidations were to occur sooner in
the portfolio of loans sold by the Company and/or with greater frequency than
was initially assumed, capitalized excess servicing income amortization would
occur more quickly than originally anticipated, which would have an adverse
effect on servicing income in the period of such adjustment.
INSURANCE OPERATIONS
United Companies Life Insurance Company ("UC Life" or "UCLIC"), the
Company's wholly-owned life insurance subsidiary domiciled in Louisiana and
organized in 1955, is currently authorized to conduct business in 47 states,
the District of Columbia and Puerto Rico. The primary products of UC Life are
single premium deferred annuities marketed principally through financial
institutions and independent agents. Premiums for these annuities currently
average approximately $20,000 per contract and are generally sold to middle
income customers seeking tax deferred insurance products, primarily to provide
savings for retirement. UC Life produced $208 million, $187 million, $176
million and $116 million in sales of annuity products during the years ended
December 31, 1993, 1992 and 1991 and in the six months ended June 30, 1994,
respectively. At June 30, 1994, total annuity reserves were approximately $1.4
billion. UC Life continues to focus its efforts on improving the quality and
liquidity of its investment portfolio. At June 30, 1994, the weighted average
rating of its publicly traded bond portfolio according to nationally recognized
statistical rating agencies was "AA". At June 30, 1994, the amortized cost of
the assets allocated to investments in investment grade fixed maturity
securities was $279 million or 27.7% of the portfolio and in investment grade
mortgage-backed securities was $711 million or 70.5% of the portfolio. At June
30, 1994, the amortized cost of UC Life's holdings of non-investment grade
publicly traded bonds was $19 million or 1.8% of the portfolio. During the
first six months of 1994, the net interest margin on the Company's annuity
business improved to 2.68% from 2.20% during 1993. Measures taken by UC Life
to stabilize and improve this margin included reducing crediting rates on new
and existing annuity contracts.
Reserves for annuity policies constitute the Company's primary
liabilities. The duration of these liabilities is affected by a number of
factors, including interest rates, surrender penalties, ratings, public
confidence in the insurance industry generally, and in the Company
specifically, governmental regulations and tax laws. Since insurance
commissions incurred at the origination of annuity policies are generally
deferred and recognized over the estimated life of the policies, any unexpected
increase in surrenders of annuity contracts would require more rapid
recognition of these expenses, thereby adversely impacting profitability.
The Company is also engaged in underwriting title insurance through its
subsidiary, United General Title Insurance Company ("UG Title" or "UGTIC"),
which conducts operations in 28 states exclusively through independent agents.
UG Title's revenues in the first six months of 1994 and for the years ended
December 31, 1993 and 1992 totaled $19.8 million, $25.1 million and $11.4
million, respectively.
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BUSINESS STRATEGIES
The Company's strategic plan focuses primarily on its continued emphasis
on its mortgage operations. Management of the Company believes that the
implementation of significant changes in mortgage operations, such as
centralization of collections and other loan servicing functions, institution
of a branch incentive compensation structure, and the addition of the UNICOR
and GINGER MAE SM programs have positioned the Company to be able to continue
the increased loan production in its mortgage operations. The Company's
increased profitability has resulted primarily from its increased loan
origination capacity and its ability to more efficiently pool and sell loans in
the secondary market, principally through securitizations. Management of the
Company intends to continue to pursue the following strategies in its mortgage
operations:
Mortgage Production Strategy
-- Continue to focus production on first mortgage non-conventional, home
equity loans.
-- Increase the number of retail branches and expand geographically to
become a national lender.
-- Continue to expand the product line and distribution channels.
-- Continue to centralize and improve customer service and loan servicing
functions to focus the Company's branches on loan originations.
-- Continue to grow its wholesale lending operation to complement its
retail network and thereby broaden the market reach of the Company.
Securitization Strategy
-- Continue to focus production on selected categories of loans that are
attractive to purchasers of mortgage-backed securities.
-- Maintain direct access to the mortgage-backed securities markets through
a Company-sponsored conduit which uses its own shelf registration
statement.
-- Continue to maintain the Company's underwriting standards.
-- Use standardized loan documentation based upon Federal National Mortgage
Association ("FNMA"), Government National Mortgage Association ("GNMA")
and Federal Home Loan Mortgage Corporation ("FHLMC") forms.
In addition to its mortgage banking strategy, the Company intends to
focus its insurance operations on developing the economies of scale necessary
to compete in the current annuity marketplace while maintaining an operating
philosophy which emphasizes investment grade securities, cost control and
quality customer service.
DISCONTINUED OPERATIONS
On May 7, 1993, the Company decided to divest its subsidiary Foster
Mortgage Corporation ("FMC"). As a result of this decision, the operations of
FMC have been classified as discontinued operations and, accordingly, the
consolidated financial statements and the related notes of the Company
segregate continuing and discontinued operations. In connection with the
decision to dispose of FMC, the Company recorded a $17.6 million after tax loss
in its financial statements as of and for the quarter ended March 31, 1993,
reflecting the operating loss of FMC for the quarter ended March 31, 1993 of
$1.5 million, net of tax benefit and the estimated loss from disposal of FMC of
$16.1 million, net of tax benefit. The Company has not reflected operating
losses incurred by FMC subsequent to that date in the Company's financial
statements.
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As of November 30, 1993, the servicing rights owned by FMC,
which constituted substantially all of its assets, were sold. On December 21,
1993, the institutional lenders under FMC's primary credit facility (the "FMC
Institutional Lenders") filed a petition in the U.S. bankruptcy court to cause
the remaining affairs of FMC to be wound up under the supervision of the
bankruptcy court. The FMC Institutional Lenders filed and the bankruptcy court
has approved a plan of liquidation for FMC providing for the disposal of FMC's
remaining assets and distributions to FMC's creditors, and allege therein
potential claims of FMC against the Company. FMC and the Company executed,
subject to the approval of the bankruptcy court, a settlement agreement
relating to payments between FMC and the Company in connection with the federal
income tax benefits resulting from FMC's losses and to certain prior
intercompany payments between FMC and the Company. The FMC Institutional
Lenders opposed the proposed settlement agreement. At the conclusion of a
hearing on the proposed settlement on August 18, 1994, the bankruptcy court
approved the portion of the settlement providing for a net payment by the
Company of $1.65 million to FMC in satisfaction of the federal income tax
benefits resulting from FMC's losses. The Company had previously recorded
substantially all of the impact of this portion of the settlement in its prior
financial statements. The bankruptcy court declined to approve the other
portion of the proposed settlement relating to payments received by the Company
from FMC within twelve months of the bankruptcy filing. These matters may be
pursued by the trustee under the plan of liquidation approved by the bankruptcy
court. If the Company were required to refund such payments, the Company has
estimated the potential additional loss to be $1.9 million, net of tax
benefits. The decision of the bankruptcy court on the settlement is not final
and has been appealed by the FMC Institutional Lenders. Management of the
Company does not believe that any additional amounts are owed by the Company to
FMC and intends to vigorously contest any claims which may be brought against
it for such amounts.
FMC is in payment default under its primary credit facility with the FMC
Institutional Lenders and the outstanding principal balance as of June 30, 1994
of approximately $43.7 million is due. The Company has not guaranteed any debt
of FMC and believes, based upon advice of its counsel, that it has no
responsibility for the obligations of FMC under such credit facility or
(excluding potential consequences of the bankruptcy filing on certain prior
intercompany transactions or potential additional payment for tax benefits as
discussed above) for any other liabilities to FMC's lenders.
GOVERNMENT REGULATION AND LEGISLATION; LEGAL PROCEEDINGS
The Company's mortgage banking and insurance businesses are subject to
extensive regulation, supervision and licensing by federal and state
authorities. Regulated matters include, without limitation, maximum interest
rates and fees which may be charged by the Company, disclosure in connection
with loan originations, credit reporting requirements, servicing requirements,
insurance premium rates and coverage issues, federal and state taxation, and
multiple qualification and licensing requirements for doing business in various
jurisdictions. While the Company believes that it maintains all requisite
licenses, permits and approvals and is in compliance in all material respects
with applicable federal and state regulations, there can be no assurance that
more restrictive laws or regulations will not be adopted which could make
compliance in the future more difficult and/or more expensive. Legislative and
regulatory proposals are frequently advanced which, if adopted, could adversely
affect the Company's profitability or the manner in which the Company conducts
its activities. In particular, legislation passed in early August 1994 by the
United States Congress and signed by the President in September 1994 imposes
disclosure requirements and prohibits prepayment penalty charges, among other
requirements, on loans secured by a borrower's principal residence with a
specified level of origination fees or a specified interest rate level. A
significant percentage of the Company's home equity loans could be subject to
the restrictions of this legislation when it becomes effective. The Company is
currently reviewing this legislation in its final form to determine the impact
of its provisions on the Company's business or results of operations.
The United States Court of Appeals for the Eleventh Circuit held, in
part, that a lender improperly disclosed the collection of the Florida state
intangible tax from the borrower, thereby subjecting the loan to rescission
under the Federal Truth-in-Lending Act (the "TILA") by the borrower for three
years after it was made. Subsequent to the court's initial decision and prior
to its refusal to reconsider its decision, the Florida Legislature amended the
language of the intangible tax to clarify the legislature's previous intention
that the intangible tax be disclosed for purposes of the TILA in the manner
that had been followed by most lenders in Florida, including the Company.
Although the Florida Legislature intended this legislation to apply
retroactively, no judicial determination has yet been made as to the effect of
this legislation on loans
-8-
<PAGE> 10
originated prior to its effective date. This Court decision may also apply to a
similar intangible tax imposed by other states. To its knowledge, as of
September 26, 1994, no claims have been filed against the Company under this
recent court decision (other than as a defense to a foreclosure proceeding) and
no notice of a breach of a representation has been received under the Company's
loan sale agreements requesting it to repurchase, cure or substitute other
loans for the loans sold. If the intent of the Florida Legislature is not
upheld and if a substantial number of claims are filed by borrowers against the
Company resulting in rescission or repurchase, the Company's financial
statements and operations will be materially adversely affected. As the
financial impact, if any, of this contingency cannot presently be reasonably
estimated, the Company has made no accrual therefor.
A substantial amount of the Company's annuity policies are marketed
through financial institutions. In August 1993, the United States Court of
Appeals for the Fifth Circuit held that the United States Comptroller of the
Currency's decision to permit national banks to sell annuities in towns with
more than 5,000 inhabitants violated the National Bank Act. In June 1994, the
United States Supreme Court granted certiorari and decided that it will hear
arguments in this action. If the Fifth Circuit ruling is upheld by the Supreme
Court, it will have a material adverse effect on the ability of the Company to
market its annuities. Furthermore, any future regulatory restrictions on the
authority of financial institutions to market annuities could have a material
adverse effect on the ability of the Company to market this product.
COMPETITION
As a marketer of credit and annuity products, the Company faces intense
competition. Traditional competitors in the financial services business
include other mortgage banking companies, commercial banks, credit unions,
thrift institutions, credit card issuers and finance companies. Competitors in
the annuity business include an increasing number of insurance companies which
have recently begun to offer annuity products. Many of these competitors in
the financial services and annuity business are substantially larger and have
more capital and other resources than the Company. Competition can take many
forms including convenience in obtaining a loan or annuity, customer service,
marketing and distribution channels and interest or crediting rates. In
addition, the current level of gains realized by the Company and its existing
competitors on the sale of its and their non- conventional loans could attract
additional competitors into this market with the possible effect of lowering
gains on future loan sales owing to increased loan origination competition.
USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the net proceeds from the sale of the Offered Securities will be
used to reduce the Company's revolving bank debt and for general corporate
purposes. At June 30, 1994, the floating interest rate on the Company's
revolving bank debt was 6.00% per annum.
-9-
<PAGE> 11
RATIOS OF EARNINGS
The following tables set forth the ratio of earnings to fixed charges
and the ratio of earnings to combined fixed charges and preferred stock
dividends for the Company for the six months ended June 30, 1994 and for each
of the years in the five-year period ended December 31, 1993.
The ratio of earnings to fixed charges has been computed by dividing
earnings by fixed charges. The ratio of earnings to combined fixed charges and
preferred stock dividends has been computed by dividing earnings by the sum of
fixed charges and preferred stock dividend requirements. Earnings consist of
income before income taxes plus fixed charges. Fixed charges consist of
interest on all indebtedness and the portion of rental expense considered to be
representative of interest.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS DECEMBER 31,
ENDED JUNE 30, --------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989
-------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
7.8 4.9 2.7 1.5 1.4 1.6
</TABLE>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS DECEMBER 31,
ENDED JUNE 30, --------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989
-------------- -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
7.8 4.7* 2.7 1.5 1.4 1.6
</TABLE>
_______________________
* The Company had no preferred stock outstanding other than for a portion
of the year ended December 31, 1993.The preferred stock dividend
declared during such period has been increased to an amount representing
the pre-tax earnings which would be required to cover such dividend.
-10-
<PAGE> 12
SELECTED FINANCIAL AND OTHER DATA (1)
The selected financial data set forth below are derived from the
Company's Consolidated Financial Statements. The Company's Consolidated Balance
Sheets at December 31, 1993 and 1992, and Consolidated Statements of Income,
Stockholders' Equity and Cash Flows for the years ended December 31, 1993, 1992
and 1991 and notes thereto were audited by Deloitte & Touche LLP, independent
certified public accountants, and are incorporated by reference herein and
available as described under "Incorporation of Certain Documents by Reference"
and "Available Information." The Company's Consolidated Financial Statements
should be read in conjunction with this table and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
herein and in the Company's Annual Report on Form 10-K for the year ended
December 31, 1993. The financial information and other data set forth for the
six months ended June 30, 1994 and 1993 are unaudited; however, in the opinion
of the Company's management, the accompanying financial information contains
all adjustments, consisting only of normal accruals, except for discontinued
operations, necessary to present fairly the financial information for such
periods. The results of operations for the six months ended June 30, 1994 may
not be indicative of results of operations to be expected for the full year.
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
---------------------- -------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ----------- ---------- ---------- ---------- ----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:(2)
Interest, charges and fees on loans . . . $ 57,105 $ 44,534 $ 95,975 $ 92,584 $ 90,169 $ 63,300 $ 56,946
Investment income . . . . . . . . . . . . 39,192 37,021 75,604 62,915 60,223 66,226 64,028
Loan sale gains . . . . . . . . . . . . . 43,346 22,845 59,441 33,475 29,627 18,613 12,193
Net insurance premiums . . . . . . . . . 25,152 18,695 43,119 33,795 42,195 42,745 44,009
Loan servicing income . . . . . . . . . . 7,684 5,654 10,077 10,611 9,492 10,592 10,525
Investment gains (losses) . . . . . . . . 99 68 595 3,110 2,089 (472) 7,392
---------- ---------- ----------- ---------- ---------- ---------- ----------
Total revenues . . . . . . . . . . . . . 172,578 128,817 284,811 236,490 233,795 201,004 195,093
Total expenses . . . . . . . . . . . . . 128,996 118,240 240,439 215,120 225,419 193,737 182,947
---------- ---------- ----------- ---------- ---------- ---------- ----------
Income from continuing operations
before income taxes . . . . . . . . . . 43,582 10,577 44,372 21,370 8,376 7,267 12,146
Provision for income taxes . . . . . . . 15,173 3,631 15,212 7,865 3,363 2,620 4,087
---------- ---------- ----------- ---------- ---------- ---------- ----------
Income from continuing operations . . . . 28,409 6,946 29,160 13,505 5,013 4,647 8,059
Income (loss) from discontinued
operations(1) . . . . . . . . . . . . . - (17,585) (17,585) (3,259) 6,463 3,660 -
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) . . . . . . . . . . . $ 28,409 $ (10,639) $ 11,575 $ 10,246 $ 11,476 $ 8,307 $ 8,059
========== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA - PERIOD END:(2)
Loans - net . . . . . . . . . . . . . . $ 447,168 $ 506,011 $ 519,634 $ 504,503 $ 606,825 $ 362,919 $ 413,634
Bonds and stocks - net(3) . . . . . . . 994,267 854,999 905,999 762,160 379,720 591,150 482,099
Capitalized excess servicing income . . 149,052 86,853 113,192 72,062 53,942 47,153 26,927
Deferred policy acquisition costs . . . 86,242 83,397 83,495 80,007 78,599 77,601 71,984
Total assets . . . . . . . . . . . . . 1,923,445 1,707,212 1,817,544 1,629,387 1,493,706 1,364,610 1,198,195
Annuity reserves . . . . . . . . . . . 1,363,382 1,246,758 1,294,983 1,147,555 1,014,649 875,346 790,786
Notes payable:
Current . . . . . . . . . . . . . . . 2,421 820 500 1,420 25,447 11,524 15,184
Long-term . . . . . . . . . . . . . . 185,000 180,243 155,000 205,430 175,000 205,447 169,332
Total liabilities . . . . . . . . . . . 1,763,664 1,604,011 1,664,176 1,533,129 1,405,272 1,285,180 1,120,347
Stockholders' equity(3) . . . . . . . . 159,781 103,201 153,368 96,258 88,434 79,430 77,848
</TABLE>
-11-
<PAGE> 13
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
---------------------- -------------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Mortgage operations
Total loan originations . . . . . . $ 426,412 $210,828 $545,229 $321,198 $328,184 $397,794 $341,049
Home equity loan originations . . . 425,446 209,758 539,868 301,234 253,613 224,783 163,669
Average home equity loan size . . . 42 36 39 28 24 23 21
Home equity loans serviced -
period end. . . . . . . . . . . . 1,388,877 916,629 1,125,139 819,448 703,922 575,282 472,258
Total loans serviced - period end . 1,777,022 1,412,031 1,568,781 1,367,822 1,344,388 1,175,038 951,109
Average coupon on home equity
loans originated. . . . . . . . . 11.3% 12.2% 11.8% 13.4% N/A N/A N/A
Loan origination fees as % of home
equity loans. . . . . . . . . . . 6.0% 7.3% 7.0% 7.9% 8.2% 7.9% 8.0%
Interest spread retained on home
equity loans sold . . . . . . . . 4.88% 6.26% 6.06% 4.56% 4.42% 4.01% 4.32%
Insurance operations
Annuity sales . . . . . . . . . . . $116,322 $120,028 $207,682 $187,050 $175,796 $102,391 $114,023
Net interest spread on
annuities . . . . . . . . . . . . 2.68% 2.04% 2.20% 1.84% 1.88% 2.18% 2.43%
Investment grade bonds as %
of invested assets. . . . . . . . 59.7% 57.5% 59.6% 54.3% 25.1% 45.5% 42.5%
</TABLE>
________________
(1) On May 7, 1993, the Company announced its decision to dispose of the
net assets and operations of FMC.The operations of FMC have been
reclassified as discontinued operations and the prior years' financial
statements of the Company included herewith have been restated
accordingly.
(2) During the first quarter of 1993, the Company implemented the
provisions of Financial Accounting Standards Board ("FASB") Statement
of Financial Accounting Standards Nos. 109 ("SFAS 109") and 113 ("SFAS
113") and, in connection therewith, elected to restate financial
statements subsequent to 1989.Amounts prior to 1990 have not been
restated for SFAS 109 or SFAS 113 and, therefore, the comparability of
these amounts with later years may be affected.See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Accounting Standards" contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1993.
(3) During the first quarter of 1994, the Company implemented the
provisions of FASB Statement of Financial Accounting Standards No. 115
("SFAS 115"), which revised the method of accounting for certain of
the Company's investments.Prior to adoption of SFAS 115, the Company
reported its investments in fixed income investments at amortized
cost, adjusted for declines in value considered to be other than
temporary.SFAS 115 requires the classification of securities in one of
three categories:"available-for-sale", "held-to-maturity" or "trading
securities". Securities classified as held-to-maturity are carried at
amortized cost, whereas securities classified as trading securities or
available-for-sale are recorded at market value.Effective with the
adoption of SFAS 115, the Company determined the appropriate
classification of its investments and, if necessary,adjusted the
carrying value of such securities accordingly as if the unrealized
gains or losses had been realized.The adjustment, net of applicable
income taxes, for investments classified as available-for-sale is
recorded in "Net unrealized loss on securities" and is included in
stockholders' equity.
-12-
<PAGE> 14
<TABLE>
<CAPTION>
SELECTED FINANCIAL INFORMATION BY SEGMENT
Six Months
Ended June 30, Year Ended December 31,
------------------- -------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------- ------- ------ ------- ------- ------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
MORTGAGE
Income Statement Data:
Interest, charges and fees on loans . . . . . $32,385 $18,362 $44,797 $35,003 $36,174 $33,029 $30,300
Investment income . . . . . . . . . . . . . . 770 400 1,054 696 1,137 - -
Loan sale gains . . . . . . . . . . . . . . . 43,346 22,625 59,220 29,679 15,571 14,636 11,422
Loan servicing income . . . . . . . . . . . . 10,077 8,470 15,568 15,284 12,108 10,289 7,577
------- -------- ------- ------- ------- ------- -------
Total revenues . . . . . . . . . . . . . . . 86,578 49,857 120,639 80,662 64,990 57,954 49,299
Total expenses . . . . . . . . . . . . . . . 44,801 36,244 74,344 56,661 60,592 54,406 41,667
------- -------- ------- ------- ------- ------- -------
Income from continuing operations
before income taxes . . . . . . . . . . . . 41,777 13,613 46,295 24,001 4,398 3,548 7,632
------- -------- ------- ------- ------- ------- -------
INSURANCE
Income Statement Data:
Interest, charges and fees on loans . . . . . 23,056 22.787 45,561 51,396 51,584 32,399 29,108
Investment income . . . . . . . . . . . . . . 39,149 36,938 75,666 64,713 61,318 66,288 63,811
Net insurance premiums . . . . . . . . . . . 25,152 18,695 43,119 33,795 42,195 42,745 44,009
Loan sale gains . . . . . . . . . . . . . . . - - - 3,310 - 3,977 771
Loan servicing income (loss) . . . . . . . . (136) 124 340 673 1,645 2,625 2,949
Investment gains (losses) . . . . . . . . . . 99 72 600 3,051 2,451 (335) 7,286
------- -------- ------- ------- ------- ------- -------
Total revenues . . . . . . . . . . . . . . . 87,320 78,616 165,286 156,938 159,193 147,699 147,934
Total expenses . . . . . . . . . . . . . . . 82,819 79,407 161,340 150,718 156,556 134,115 129,339
------- -------- ------- ------- ------- ------- -------
Income (loss) from continuing
operations before income taxes . . . . . . 4,501 (791) 3,946 6,220 2,637 13,584 18,595
------- -------- ------- ------- ------- ------ ------
OTHER OPERATIONS
Income (loss) from continuing
operations before income taxes . . . . . . (62) (5) (275) (1,339) 13,566 262 3
CORPORATE
Loss from continuing
operations before income taxes . . . . . . (2,576) (2,979) (5,812) (5,958) (10,315) (9,654) (14,084)
ELIMINATIONS . . . . . . . . . . . . . . . . (58) 739 218 (1,554) (1,910) (473) -
------- -------- ------- ------- ------- ------ ------
CONSOLIDATED
Income from continuing operations
before income taxes . . . . . . . . . . . . 43,582 10,577 44,372 21,370 8,376 7,267 12,146
Provision for income taxes . . . . . . . . . 15,173 3,631 15,212 7,865 3,363 2,620 4,087
------- -------- ------- ------- ------- ------ ------
Income from continuing operations . . . . . . 28,409 6,946 29,160 13,505 5,013 4,647 8,059
Income (loss) from discontinued
operations . . . . . . . . . . . . . . . . - (17,585) (17,585) (3,259) 6,463 3,660 -
------- -------- ------- ------- ------- ------ ------
Net income (loss) . . . . . . . . . . . . . . $28,409 $(10,639) $11,575 $10,246 $11,476 $8,307 $8,059
======= ======== ======= ======= ======= ====== ======
</TABLE>
-13-
<PAGE> 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following analysis should be read in conjunction with the Company's
financial statements and accompanying notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1993 and
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1994.See "Incorporation of Certain Documents by Reference" and "Available
Information."
OVERVIEW
The table below sets forth income from continuing operations before
income taxes for each of the Company's business segments and certain home
equity loan data for the indicated periods:
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
---------------------- --------------------------------------
1994 1993 1993 1992 1991
-------- -------- --------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Mortgage operations
UC Lending . . . . . . . . . . $ 41,777 $ 13,613 $ 46,295 $ 24,001 $ 4,398
Insurance operations
UC Life . . . . . . . . . . . . 4,504 (1,370) 2,635 5,465 2,077
UG Title . . . . . . . . . . . (3) 579 1,311 755 560
Other operations . . . . . . . . (62) (5) (275) (1,339) 13,566
Corporate and eliminations . . . (2,634) (2,240) (5,594) (7,512) (12,225)
-------- -------- --------- -------- --------
Total . . . . . . . . . . . . . $ 43,582 $ 10,577 $ 44,372 $ 21,370 $ 8,376
======== ======== ========= ======== ========
Home equity loan originations . . $425,446 $209,758 $ 539,868 $301,234 $253,613
Home equity loans sold . . . . . 460,359 167,889 462,873 271,920 161,680
Interest spread retained on
home equity loans sold . . . . 4.88% 6.26% 6.06% 4.56% 4.42%
</TABLE>
The following summary identifies the major factors which influenced
the results of operations of the Company's primary operating divisions during
the indicated periods.
Mortgage operations
In 1993, the Company began selling its home equity loans in public
securitization transactions through its own shelf registration statement.During
the second quarter of 1994, the size of this shelf registration statement was
increased by $3 billion.The Company believes loan securitizations improve its
access to funding and thereby provides a distribution outlet sufficient to meet
the Company's expanded home equity loan production.Home equity loan production
increased to $540 million in 1993 compared to $301 million in 1992 and for the
first six months of 1994 increased to $425 million compared to $210 million for
the same period of 1993.The Company's strategy for increasing home equity loan
production includes continued geographic expansion, introduction of new loan
products and wholesale loan originations.During the first six months of 1994,
the Company opened offices in ten additional states thereby expanding its
retail operations to 33 states.In addition, brokers and correspondents were
added to the Company's wholesale loan network, which , at June 30, 1994, had
over 650 representatives in 18 states.
-14-
<PAGE> 16
The positive effect on income of the mortgage operations for 1993
resulting from the wider interest margins retained on loans sold and the lower
costs of funding loan originations was partially offset by increases in the
provision for loan losses and by the accrual of a $2.3 million estimated loss
arising from the settlement of litigation.Income from operations before income
taxes of the mortgage division for the six months ended June 30, 1994 increased
approximately $28.2 million compared to the same period of 1993, primarily as
the result of a $292 million increase in the amount of loans sold and an
increase in gains and fees recognized at the time of sale.As the result
primarily of increases in the level of market interest rates, the interest
spread retained on home equity loans sold declined to 4.88% in the first six
months of 1994 from 6.26% during the same period in 1993.
The Company's mortgage operations are interest rate sensitive and,
therefore, fluctuations in and the level of interest rates can have a variety
of effects on the Company's profitability.In particular, significant changes in
interest rates may impact the volume of loan originations, and will influence
the funding costs of such originations and the amount of gain recognized on
loans sold in the secondary market.During periods of declining interest rates,
the mortgage operations will generally experience an increase in profitability
as the interest spread should widen both on loans held by the Company as an
investment and on loans sold in the secondary market.Although historically a
lower interest rate environment has not resulted in a significant increase in
the level of prepayment of loans originated and serviced by the Company, a
significant and sustained reduction in interest rates could cause prepayments
to increase, and thereby result in a contraction of the amount of loans owned
and serviced and an accelerated amortization of capitalized excess servicing
income.Increased prepayments reduce the time period during which the Company
receives excess servicing income and other servicing income with respect to
prepaid loans.Increased amortization of capitalized excess servicing income is
a current charge to earnings.Likewise, if delinquencies or liquidations were to
occur sooner in the portfolio of loans sold by the Company and/or with greater
frequency than was initially assumed, capitalized excess servicing income
amortization would occur more quickly than originally anticipated, which would
have an adverse effect on servicing income in the period of such adjustment.In
contrast, an increase in the level of interest rates for an extended period of
time could adversely affect the ability of the Company to originate loans, as
well as the profitability of the loan origination program, by increasing the
cost of funding and reducing the interest spread on loans retained and loans
sold.If actual prepayments with respect to loans sold occur more slowly than
estimated at the time of sale, total income would exceed previously estimated
amounts; however, no adjustments would be made to capitalized excess servicing
income on the Company's consolidated balance sheet as such income would be
recognized prospectively.The Company began originating adjustable rate mortgage
loans in 1993 and the effects of changes in interest rates discussed above
should be less for such loans than with respect to fixed rate loans.
Insurance operations
Life and annuity products.UC Life has focused its efforts on increased
annuity sales by expanding its distribution network through financial
institutions and independent general agents.In 1993, annuity sales were $208
million, the largest annual production since 1982.During periods of lower
interest rates, UC Life's investment yields tend to decline, thereby reducing
the margin between the interest earned on invested assets and the interest
credited on annuity contracts.The average spread on the annuity business was
1.88% and 1.84% in 1991 and 1992, respectively, and increased to 2.20% during
1993.Measures taken by UC Life to stabilize and improve this margin include the
reduction in interest crediting rates on new and existing annuity
contracts.Reductions in renewal crediting rates have been implemented without
an adverse impact on surrender rates when compared to prior years.Income from
operations before income taxes of UC Life for the first six months of 1994
increased approximately $5.9 million compared to the same period of 1993
primarily as the result of the positive effect of an increase in the interest
margin on the Company's annuity products, which rose from 2.04% for the first
six months of 1993 to 2.68% for the same period of 1994.In addition, an
improvement in the market for commercial real estate resulted in a $.4 million
reduction in the provision for losses on commercial real estate mortgage loans
in the first six months of 1994 compared to the same period of 1993.Income from
operations before income taxes in the first six months of 1993 was reduced by
approximately $1.4 million as the result of an estimated loss in connection
with the termination of an agreement with a third-party administrator of credit
life insurance underwritten by UC Life.
-15-
<PAGE> 17
UC Life has continued its efforts to improve the quality and liquidity
of its investment portfolio.At June 30, 1994, the weighted average rating of
the publicly traded bond portfolio according to nationally recognized
statistical rating agencies was "AA". At June 30, 1994, the amortized cost of
the assets allocated to investments in investment grade fixed maturity
securities was $279 million or 27.7% of the portfolio and in investment grade
mortgage-backed securities was $711 million or 70.5% of the portfolio.At June
30, 1994, the amortized cost of UC Life's holdings of non-investment grade
publicly traded bonds was $19 million or 1.8% of the portfolio.UC Life's
invested assets also include residential and commercial real estate mortgages
originated and serviced by UC Lending; however, the percentage of assets
invested in mortgage loans in recent years has been reduced primarily as the
result of their disfavor with insurance regulatory authorities and rating
agencies.
The annuities sold by UC Life are monetary in nature and therefore
sensitive to changes in the interest rate environment.Profitability of UC Life
is directly affected by its ability to invest annuity premiums at yields above
the interest crediting rates on the related policy liabilities.One of the
primary financial objectives of UC Life is to effectively manage this interest
rate spread over time in changing interest rate environments.This is
accomplished in part by adjusting the interest crediting rate paid on its
existing and new annuity policies.During periods of declining interest rates,
the market value of UC Life's investments, primarily fixed maturity
investments, increases; however, yields earned on investments made during such
periods decline.In contrast, during periods of rising interest rates, the
market value of the investment portfolio declines and the risk of policy
surrenders increases.An unanticipated increase in surrenders would impact the
Company's liquidity, potentially requiring the sale of certain investments
prior to their maturities, which may be at a loss.
Title insurance products.The Company's title insurance unit, UG Title,
has continued to expand its operations and, as of June 30, 1994, operated in 28
states.UG Title increased its premium volume in the first six months of 1994
approximately $11.2 million compared to the same period in 1993.Income from
operations before income taxes of UG Title during the first six months of 1994
was adversely impacted by approximately $.9 million due to losses associated
with a loan broker in California.Although UG Title was originally formed in
1983 to complement the Company's mortgage operation, underwriting of affiliated
transactions currently represents less than 5% of UG Title's business.This unit
operates exclusively through approximately 785 independent agents.In 1993, UG
Title began operations in California, which is the largest title insurance
market in the United States.
DISCONTINUED OPERATIONS
On May 7, 1993, the Company announced its decision to dispose of the
net assets of FMC.As a result of this decision, the operations of FMC have been
classified as discontinued operations, and, accordingly, the consolidated
financial statements and the related notes of the Company segregate continuing
and discontinued operations.
The assets of FMC were acquired by the Company in November of 1990.FMC
was engaged in servicing residential mortgage loans for government and
quasi-government agencies and private investors.Because the operations of FMC
during 1990 cover only a two-month period, the following discussion focuses
primarily on operations during 1992 and 1991.
During late 1991 and throughout 1992, FMC experienced a significant
reduction in its servicing portfolio as the result of mortgage refinancings
caused by a dramatic and sustained decline in mortgage interest
rates.Notwithstanding efforts to downsize operations to reduce expenses and to
develop a correspondent loan origination program to replenish its portfolio,
FMC experienced a net loss from operations of $3.3 million in 1992 compared to
net income of $6.5 million in 1991.
The principal sources of revenue for FMC were servicing fees, which
approximated 0.50% of the average principal balance of loans serviced, and
investment income earned on reinvesting funds borrowed under investment lines
of credit.The average serviced portfolio during 1992 was $6.3 billion compared
to $7.3 billion during 1991, resulting in a decrease of approximately $5.7
million in servicing income during 1992.The lower
-16-
<PAGE> 18
interest rate environment also negatively impacted investment yields causing a
decrease in investment income of $1.3 million during 1992.
The primary expense items of FMC were the amortization of purchased
mortgage servicing rights and interest. The costs of acquiring mortgage
servicing rights are capitalized and amortized in proportion to and over the
period of estimated servicing income. Amortization of purchased mortgage
servicing rights totaled $12.2 million and $9.7 million during 1992 and 1991,
respectively. As a result of the significant increase in the level of
prepayments and the sustained decline in mortgage interest rates, FMC
accelerated the amortization of servicing rights during 1992. FMC was also
required to pass through to the investors interest for the entire month on a
loan which was paid off regardless of the date of payoff of the loan during
such month; therefore, the significant increase in the level of prepayments
experienced by FMC also caused an increase of $1.8 million in pool pass-through
interest during 1992. Interest expense incurred by FMC relates to debt incurred
in connection with the acquisition of its assets.
As of November 30, 1993, the servicing rights owned by FMC, which
constituted substantially all of its assets, were sold. On December 21, 1993,
the FMC Institutional Lenders filed a petition in the U.S. bankruptcy court to
cause the remaining affairs of FMC to be wound up under the supervision of the
bankruptcy court. The FMC Institutional Lenders filed and the bankruptcy court
has approved a plan of liquidation for FMC providing for the disposal of FMC's
remaining assets and distributions to FMC's creditors, and allege therein
potential claims of FMC against the Company. FMC and the Company executed,
subject to the approval of the bankruptcy court, a settlement agreement
relating to payments between FMC and the Company in connection with the federal
income tax benefits resulting from FMC's losses and to certain prior
intercompany payments between FMC and the Company. The FMC Institutional
Lenders opposed the proposed settlement agreement. At the conclusion of a
hearing on the proposed settlement on August 18, 1994, the bankruptcy court
approved the portion of the settlement providing for a net payment by the
Company of $1.65 million to FMC in satisfaction of the federal income tax
benefits resulting from FMC's losses. The Company had previously recorded
substantially all of the impact of this portion of the settlement in its prior
financial statements. The bankruptcy court declined to approve the other
portion of the proposed settlement relating to payments received by the Company
from FMC within twelve months of the bankruptcy filing. These matters may be
pursued by the trustee under the plan of liquidation approved by the bankruptcy
court. If the Company were required to refund such payments, the Company has
estimated the potential additional loss to be $1.9 million, net of tax
benefits. The decision of the bankruptcy court on the settlement is not final
and has been appealed by the FMC Institutional Lenders. Management of the
Company does not believe that any additional amounts are owed by the Company to
FMC and intends to vigorously contest any claims which may be brought against
it for such amounts.
FMC is in payment default under its primary credit facility with the
FMC Institutional Lenders and the outstanding principal balance as of June 30,
1994 of approximately $43.7 million is due. The Company has not guaranteed any
debt of FMC and believes, based upon advice of its counsel, that it has no
responsibility for the obligations of FMC under such credit facility or
(excluding potential consequences of the bankruptcy filing on certain prior
intercompany transactions or potential additional payment for tax benefits as
discussed above) for any other liabilities to FMC's lenders.
RESULTS OF OPERATIONS
Prior years' financial statements have been restated to present FMC as
discontinued operations. Discussed below are results of continuing operations
for the periods presented and certain financial data by business segment for
such periods.
-17-
<PAGE> 19
SIX MONTHS ENDED JUNE 30, 1994 COMPARED TO SIX MONTHS ENDED JUNE 30, 1993
The following table sets forth certain financial data for the periods
indicated.
<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------
1994 1993
---------- -----------
(in thousands)
<S> <C> <C>
Total revenues . . . . . . . . . . . . . . . . . $ 172,578 $ 128,817
Total expenses . . . . . . . . . . . . . . . . . 128,996 118,240
Income from continuing operations
before income taxes . . . . . . . . . . . . . . 43,582 10,577
Income from continuing operations . . . . . . . . 28,409 6,946
</TABLE>
Revenues.The following table sets forth information regarding the
components of the Company's revenues for the six months ended June 30, 1994 and
1993.
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1994 1993
--------- ---------
(in thousands)
<S> <C> <C>
Interest, charges and fees on loans . . . . . . . $57,105 $44,534
Investment income . . . . . . . . . . . . . . . . 39,192 37,021
Loan sale gains . . . . . . . . . . . . . . . . . 43,346 22,845
Net insurance premiums . . . . . . . . . . . . . . 25,152 18,695
Loan servicing income . . . . . . . . . . . . . . 7,684 5,654
Investment gains . . . . . . . . . . . . . . . . . 99 68
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . . $ 172,578 $ 128,817
========= =========
</TABLE>
Interest, charges and fees on loans increased $12.6 million for the
first six months of 1994.This line item includes interest on mortgage loans
owned by the mortgage and insurance divisions and loan origination fees earned
by the mortgage division.Loan origination fees in excess of direct origination
costs on loans held by the Company are recognized over the life of the loan or
earlier at the time of sale on loans sold to third parties.During the six
months ended June 30, 1994 and 1993, the Company sold approximately $460
million and $168 million, respectively, in home equity loans and recognized
approximately $15.6 million and $7.2 million, respectively, in net loan
origination fees in connection with these sales. Other loan income includes
primarily prepayment fees, late charges and insurance commissions.
The following table presents the composition of interest, charges and
fees on loans for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1994 1993
-------- --------
(in thousands)
<S> <C> <C>
Mortgage loan interest . . . . . . . . . . . . . . $ 25,085 $ 26,070
Loan origination fees . . . . . . . . . . . . . . 27,210 14,523
Other loan income . . . . . . . . . . . . . . . . 4,810 3,941
-------- --------
Total interest, charges and fees on loans. . . . $ 57,105 $ 44,534
======== ========
</TABLE>
The Company estimates that non-accrual loans reduced mortgage loan
interest for the first six months of 1994 and 1993 by approximately $5.1
million and $4.7 million, respectively.During the six months ended June 30,
1994 the average amount of non- accrual loans owned by the Company was $28.2
million compared to approximately $33.5 million during the same period of
1993.In addition, the average balance of loans serviced
-18-
<PAGE> 20
for third parties which were on a non-accrual basis or in foreclosure was $52.4
million and $41.2 million during the first six months of 1994 and 1993,
respectively, representing 4.4% and 4.5%, respectively, of the average amount
of loans serviced for third parties.The Company is generally obligated to
advance interest on delinquent loans to the investor or holder of the
mortgage-backed security, as the case may be, at the pass-through rate until
satisfaction of the note, liquidation of the collateral or charge off of the
delinquent loan.At June 30, 1994, the Company owned approximately $9.8 million
of commercial loans which were on an accrual status, but which the Company
considers as potential problem loans, compared to $11.6 million at June 30,
1993.The Company evaluates each of these commercial loans to estimate its risk
of loss in the investment and provides for such loss through a charge to
earnings.
Investment income totaled $39.2 million on average investments of
approximately $1.0 billion for the first six months of 1994 compared to
investment income of $37.0 million on average investments of approximately $833
million during the same period of 1993.The impact on revenue of the increased
asset base in 1994 was offset by lower weighted average investment yields than
experienced during the first six months of 1993.At June 30, 1994 the amortized
cost of the fixed income portfolio totaled $1.0 billion and was comprised
principally of $713 million in investment grade mortgage-backed securities and
$284 million in investment grade bonds.At June 30, 1994, the weighted average
rating of the publicly traded bond portfolio according to nationally recognized
statistical rating agencies was "AA".
Net insurance premiums increased $6.5 million for the first six months
of 1994 compared with the same period of 1993.Net insurance premiums reflect
revenues associated primarily with sales of title insurance policies
underwritten by UG Title and credit insurance underwritten by UC Life.The
increase in premium income is primarily the result of an increase of $11.2
million in title insurance premiums offset by a reduction in premiums earned on
credit insurance products reflecting the impact of UC Life's decision to
discontinue sales of credit insurance products.
Loan sale gains recognized by the Company's mortgage unit increased
$20.7 million during the first six months of 1994 over the same period in
1993.Loan sale gains approximate the present value over the estimated lives of
the loans of the excess of the contractual rates on the loans sold, over the
sum of the pass through rate paid to the buyer, a normal servicing fee, a
trustee fee, a surety bond fee, if any, in mortgage-backed securitization
transactions, and an estimate of future credit losses.The increase in the
amount of loan sale gains was due primarily to a $292 million increase in the
amount of loans sold which offset a decrease in excess servicing income
retained by the Company (i.e., the stated interest rate on the loan less the
pass through rate and the normal servicing fee and other applicable recurring
fees).Interest spread retained by the Company on loans sold includes the normal
servicing fee.The following table presents information regarding home equity
loan sale transactions by the Company's mortgage division for the periods
indicated.
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1994 1993
--------- ---------
(dollars in thousands)
<S> <C> <C>
Home equity loans sold . . . . . . . . . . . . . . $ 460,359 $ 167,889
Average coupon on home equity loans sold . . . . . 11.51% 12.59%
Interest spread retained on home equity loans sold 4.88% 6.26%
Home equity loan sale gains . . . . . . . . . . . $43,346 $22,625
</TABLE>
Historically, the Company originated and sold portfolios of home equity
loans on a whole loan basis (or participations therein) to institutional
investors or government-sponsored mortgage agencies or conduits and, during
1992, with the participation of one of these investors, securitized and
publicly sold home equity loan pass-through certificates.In the second quarter
of 1993, the Company began selling its loans in public securitization
transactions through its own shelf registration statement.In comparison to the
first six months of 1993, market interest rates were higher during the first
half of 1994, and, as a result, the Company experienced a decrease in the
interest spread retained on home equity loans sold from 6.26% in the six months
ended June 30, 1993, to 4.88% in the six months ended June 30,
1994.Fluctuations in and the level of market interest rates will
-19-
<PAGE> 21
impact the interest spread retained by the Company on loans sold, and,
potentially, the amount of its loan sale gains.An increase in the level of
market interest rates will generally adversely affect the interest spread on
loans sold, whereas such interest spread generally widens during a declining
interest rate environment.Although strategic actions can be taken by the
Company during a rising interest rate environment to mitigate the impact on
earnings of fluctuations in market rates, such as increasing the coupon rate
charged on its loan products,the effect of such action will generally lag
behind the impact of market rate fluctuations.As the result of recent increases
in the level of interest rates, the interest spread retained by the Company on
loan sales during the second quarter of 1994 declined to 4.33% from 5.61%
retained on loan sales during the first quarter of 1994.If the current level of
market interest rates is sustained or if such rates continue to increase during
the third quarter of 1994, the interest spread retained on home equity loans
sold during the third quarter of 1994 may be narrower than that received on
sales during the three months ended June 30, 1994.
Loan servicing income increased $2.0 million for the six months ending
June 30, 1994 compared to the same period of 1993, reflecting the impact of an
increased amount of home equity loans serviced for third parties offset by an
increase in the amortization of prior loan sale gains.The following table
reflects the components of loan servicing income for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1994 1993
-------- --------
(in thousands)
<S> <C> <C>
Servicing fees earned . . . . . . . . . . . . . . $ 25,042 $ 13,407
Amortization of loan sale gains . . . . . . . . . (17,358) (7,753)
-------- --------
Loan servicing income . . . . . . . . . . . . . . $ 7,684 $ 5,654
======== ========
</TABLE>
Expenses.The following table presents the components of the Company's
expenses for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1994 1993
--------- ---------
(in thousands)
<S> <C> <C>
Interest on annuity policies . . . . . . . . . . . $ 35,854 $ 38,190
Personnel . . . . . . . . . . . . . . . . . . . . 28,185 19,601
Insurance commissions . . . . . . . . . . . . . . 23,704 14,374
Insurance benefits . . . . . . . . . . . . . . . . 6,941 9,844
Loan loss provision . . . . . . . . . . . . . . . 6,311 7,825
Interest . . . . . . . . . . . . . . . . . . . . . 5,699 5,429
Other operating . . . . . . . . . . . . . . . . . 22,302 22,977
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . . $ 128,996 $ 118,240
========= =========
</TABLE>
Interest on annuity policies declined $2.3 million for the first six
months of 1994 when compared to the same period of 1993 as the result of a
reduction in the average interest crediting rate on the Company's annuity
policies offset by the impact of an increase in annuity reserves.Average
annuity reserves were $1.3 billion during the first six months of 1994, an
increase of approximately $112 million from the same period of 1993.
Personnel expenses increased approximately $8.6 million primarily
because of costs associated with the geographic expansion of the Company's
mortgage subsidiary and an increase in the cost of the Company's employee
benefit and incentive plans.
Insurance commissions for the first six months of 1994 increased by
approximately $9.3 million over commissions for the same period of 1993
primarily as the result of commissions associated with the increase in title
policies written.Commissions paid on issuance of the Company's single premium
deferred annuity products are generally capitalized as deferred policy
acquisition costs ("DPAC") and amortized over the estimated life of the
policy.During the six months ended June 30, 1994, the Company capitalized
approximately $9.4 million
-20-
<PAGE> 22
in commissions paid on sales of annuities compared to $7.9 million during the
same period of 1993.Amortization of commission expense on annuities capitalized
in prior periods was $4.4 million during the six months ended June 30, 1994,
compared to $2.8 million during the same period of 1993.
The Company's loan loss provision was $6.3 million and $7.8 million for
the six months ended June 30, 1994 and 1993, respectively. The decrease in the
provision resulted primarily from a $.4 million decrease by UC Life in the
provision for losses on commercial real estate mortgage loans and a decrease of
$1.1 million in the provision for losses on home equity loans due to a
reduction in the amount of property placed into foreclosure and a lower
incidence of loss per property.
Interest expense for the first six months of 1994 increased
approximately $.3 million from the same period of 1993 primarily as the result
of an increase in the weighted average interest rate charged on the debt offset
by a decrease of $14 million in the average amount of debt outstanding.
Other operating expenses for the six months ended June 30, 1994
declined approximately $.7 million when compared to the same period of
1993.Other operating expenses in the second quarter of 1994 included a $.9
million charge by UG Title in connection with losses associated with a loan
broker in California while other operating expenses in the first six months of
1993 included a $2.3 million accrual for the estimated cost of a legal
settlement and $1.4 million in estimated losses in connection with termination
of a third party administrative contract for credit insurance.
YEAR ENDED DECEMBER 31, 1993 COMPARED TO YEAR ENDED DECEMBER 31, 1992
The following table sets forth certain financial data for the periods
indicated.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Total revenues . . . . . . . . . . . . . . . . . . $ 284,811 $ 236,490
Total expenses . . . . . . . . . . . . . . . . . . 240,439 215,120
Income from continuing operations
before income taxes . . . . . . . . . . . . . . . 44,372 21,370
Income from continuing operations . . . . . . . . 29,160 13,505
</TABLE>
The following table sets forth income from continuing operations
before income taxes for each of the Company's business segments for the year
ended December 31, 1993 and 1992.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1993 1992
--------- --------
(in thousands)
<S> <C> <C>
Mortgage operations . . . . . . . . . . . . . . . $ 46,295 $ 24,001
Insurance operations . . . . . . . . . . . . . . . 3,946 6,220
Other operations . . . . . . . . . . . . . . . . . (275) (1,339)
Corporate . . . . . . . . . . . . . . . . . . . . (5,812) (5,958)
Elimination . . . . . . . . . . . . . . . . . . . 218 (1,554)
-------- --------
Total . . . . . . . . . . . . . . . . . . . . . $ 44,372 $ 21,370
======== ========
</TABLE>
Operating results were positively affected by higher loan sale gains,
an increase in the spread earned on annuity products and lower borrowing costs
and negatively impacted by higher loan loss provisions and the estimated
settlement costs of litigation.By comparison to 1992, income from continuing
operations for the mortgage division was increased by higher loan sale gains in
1993 and reduced by the $2.3 million accrual of legal settlement costs and an
increase in the provision for loan losses.Earnings from insurance operations
were
-21-
<PAGE> 23
positively affected in 1993 by a wider margin between the interest yield on
investments and the interest crediting rates on the annuity products and an
increase in title insurance premiums; however, losses incurred on bond
investments and a probable loss associated with a previously terminated
agreement with a third-party administrator of credit life insurance
underwritten by UC Life offset the impact on earnings of these factors.In
addition, earnings of the insurance division in 1992 were increased by a $3.3
million gain on the sale of loans.
Revenues.The following table sets forth information regarding the
components of the Company's revenues for the years ended December 31, 1993 and
1992.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Interest, charges and fees on loans . . . . . . . $ 95,975 $ 92,584
Investment income . . . . . . . . . . . . . . . . 75,604 62,915
Loan sale gains . . . . . . . . . . . . . . . . . 59,441 33,795
Net insurance premiums . . . . . . . . . . . . . . 43,119 33,475
Loan servicing income . . . . . . . . . . . . . . 10,077 10,611
Investment gains . . . . . . . . . . . . . . . . . 595 3,110
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . . $ 284,811 $ 236,490
========= =========
</TABLE>
Interest, charges and fees on loans increased $3.4 million for
1993.This line item includes interest on mortgage loans owned by the mortgage
and insurance divisions and loan origination fees earned by the mortgage
division.Loan origination fees in excess of direct origination costs on loans
held by the Company are recognized over the life of the loan or earlier at the
time of sale on loans sold to third parties.During 1993 and 1992, the Company
sold approximately $463 million and $272 million, respectively, in home equity
loans and recognized approximately $18.9 million and $12.1 million,
respectively, in net loan origination fees in connection with these sales.The
average loan portfolio owned totaled approximately $487 million during 1993
compared to $540 million during 1992, due to an increased level of loan sales
which, in turn, decreased mortgage loan interest.Other loan income includes
primarily prepayment fees, late charges and insurance commissions.
The following table presents the composition of interest, charges and
fees on loans.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Mortgage loan interest . . . . . . . . . . . . . . . $ 51,763 $ 57,467
Loan origination fees . . . . . . . . . . . . . . . 35,987 26,340
Other loan income . . . . . . . . . . . . . . . . . 8,225 8,777
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . . . $ 95,975 $ 92,584
========= =========
</TABLE>
The Company estimates that non-accrual loans reduced mortgage loan
interest for 1993 and 1992 by approximately $9.5 million and $8.1 million,
respectively.During 1993 the average amount of non-accrual loans owned by the
Company was $31.7 million compared to approximately $31.6 million during
1992.In addition, the average balance of loans serviced for third parties which
were on a non- accrual basis or in foreclosure was $43.4 million and $32.2
million during 1993 and 1992, respectively, representing 4.5% and 3.9%,
respectively, of the average amount of loans serviced for third parties.The
Company is generally obligated to advance interest on delinquent loans to the
investor or holder of the mortgage-backed security, as the case may be, at the
pass-through rate until satisfaction of the note, liquidation of the collateral
or charge off of the delinquent loan.At December 31, 1993, the Company owned
approximately $8.1 million of commercial loans which were on an accrual status,
but which the Company considers as potential problem loans, compared to $13.8
million at December 31, 1992.The Company evaluates each of these commercial
loans to estimate its risk of loss in the investment and provides for such loss
through a charge to earnings.
-22-
<PAGE> 24
Investment income totaled $75.6 million on average investments of
approximately $877 million for 1993 compared to investment income of $62.9
million on average investments of approximately $690 million during 1992.In
addition to the impact on revenue of the increased asset base, investment
income during 1993 was increased as the result of a reduction in the amount of
funds invested in short term maturities when compared to 1992.At December 31,
1993, the fixed income portfolio totaled $906 million and was comprised
principally of $598 million in investment grade mortgage-backed securities and
$238 million in investment grade corporate bonds.At December 31, 1993, the
weighted average rating of the publicly traded bond portfolio according to
nationally recognized statistical rating agencies was "AA".
Net insurance premiums increased $9.3 million during 1993 compared to
1992.The increase in premium income is primarily the result of an increase of
$13.5 million in title insurance premiums offset by a reduction in premiums
earned on credit insurance products.
Loan sale gains recognized by the Company's mortgage unit increased
$29.5 million during 1993 over 1992.The increase in amount of loan sale gains
was due primarily to an increase in the excess servicing income retained by the
Company and a $191 million increase in the amount of home equity loans
sold.Interest spread retained by the Company on loans sold includes the normal
servicing fee.The following table presents information regarding home equity
loan sale transactions by the Company's mortgage division for the periods
indicated.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1993 1992
--------- ---------
(dollars in thousands)
<S> <C> <C>
Home equity loans sold . . . . . . . . . . . . . . $ 462,873 $ 271,920
Average coupon on home equity loans sold . . . . . 12.00% 13.69%
Interest spread retained on
home equity loans sold . . . . . . . . . . . . . 6.06% 4.56%
Home equity loan sale gains . . . . . . . . . . . $ 59,220 $ 29,679
</TABLE>
Historically, the Company has originated and sold portfolios of home
equity loans on a whole loan basis (or participations therein) to institutional
investors or government-sponsored mortgage agencies or conduits and, during
1992, with the participation of one of these investors, securitized and
publicly sold home equity loan pass-through certificates.In 1993, the Company
began selling its loans in public securitization transactions through its own
shelf registration statement.As a primary consequence of this process, the
Company realized an increase in the interest spread retained on home equity
loans sold from 4.56% in 1992 to 6.06% in 1993.
Loan servicing income declined in 1993 compared to 1992 as the
result of higher amortization of prior loan sale gains partially offset by an
increase in the amount of home equity loans serviced.The following table
reflects the components of loan servicing income for the periods indicated.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1993 1992
-------- --------
(in thousands)
<S> <C> <C>
Servicing fees earned . . . . . . . . . . . . . . $ 31,621 $ 23,021
Amortization of loan sale gains . . . . . . . . . (21,544) (12,410)
-------- --------
Total . . . . . . . . . . . . . . . . . . . . . $ 10,077 $ 10,611
======== ========
</TABLE>
-23-
<PAGE> 25
Expenses.The following table presents the components of the
Company's expenses for the periods indicated.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1993 1992
--------- ---------
(in thousands)
<S> <C> <C>
Interest on annuity policies . . . . . . . . . . . $ 76,086 $ 77,268
Personnel . . . . . . . . . . . . . . . . . . . . 41,525 35,250
Insurance commissions . . . . . . . . . . . . . . 34,814 24,056
Insurance benefits . . . . . . . . . . . . . . . . 18,920 21,159
Loan loss provision . . . . . . . . . . . . . . . 17,343 10,027
Interest . . . . . . . . . . . . . . . . . . . . . 10,158 12,082
Other operating . . . . . . . . . . . . . . . . . 41,593 35,278
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . . $ 240,439 $ 215,120
========= =========
</TABLE>
Interest on annuity policies declined $1.2 million during 1993
compared to 1992.Due to the sustained lower interest rate environment, the
average interest crediting rate on these annuity policies was reduced which
offset the impact of an increase in average annuity reserves of approximately
$156 million during 1993 compared to 1992.In addition, by comparison with 1992,
annuity surrenders declined during 1993 notwithstanding reductions in renewal
crediting rates on these policies.
Personnel expenses increased approximately $6.3 million primarily
because of the costs associated with the geographic expansion of the Company's
mortgage operations and incentive compensation paid in connection with loan
originations.
Insurance commissions for 1993 increased by approximately $10.8
million over commissions for 1992 primarily as the result of commissions
associated with the increase in titlepolicies written.Commissions paid on
issuance of the Company's single premium deferred annuity products are
generally capitalized as DPAC and amortized over the estimated life of the
policy.During 1993, the Company capitalized approximately $13.7 million in
commissions paid on sales of annuities compared to $11.6 million during
1992.Amortization of commission expense on annuities capitalized in prior
periods was $5.6 million during 1993, compared to $4.1 million during 1992.
The Company's loan loss provision was $17.3 million and $10.0
million for 1993 and 1992, respectively.The increase in the provision resulted
primarily from an increase in the amount of losses incurred in 1993 as the
result of an increase in the number of properties placed in foreclosure and an
increase in the average amount of loss per property sold.
Interest expense for 1993 declined $1.9 million from 1992 primarily
as the result of lower borrowing costs.
Other operating expenses for 1993 were approximately $6.3 million
higher than in 1992.Included in other operating expenses is the $2.3 million
accrual for the settlement of litigation and approximately $1.4 million in
estimated loss recognized in connection with the previously terminated
agreement to administer certain blocks of the Company's credit life business.
ASSET QUALITY AND RESERVES
The quality of the Company's loan and bond portfolios and of the
loan portfolio serviced for third parties significantly affects the
profitability of the Company.The values of and markets for these assets are
dependent on a number of factors, including general economic conditions,
interest rates and governmental regulations.Adverse changes in such factors,
which become more pronounced in periods of economic decline, may affect the
quality of these assets and the Company's resulting ability to sell these
assets for acceptable prices.General economic deterioration can result in
increased delinquencies on existing loans, reductions in
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<PAGE> 26
collateral values and declines in the value of investments resulting from a
reduced capacity of issuers to repay the bonds.
Loans.Substantially all of the loans owned by the Company were
originated by UC Lending through its branch (i.e., retail) network or wholesale
loan programs.The Company's loan portfolio at June 30, 1994 was comprised
primarily of $254 million in home equity loans and $173 million in commercial
loans.In connection with its origination of home equity loans, the Company
relies on thorough underwriting and credit review procedures by UC Lending, a
mortgage on the borrower's residence and, in some cases, other security, and,
in its retail origination program, close personal contact with borrowers
through its branch office system to manage credit risk on its loans.In addition
to servicing the loans owned by the Company, UC Lending serviced approximately
$1.4 billion in loans for third parties at June 30, 1994.The Company is subject
to risk of loss on loans in its owned portfolio and for loans sold under loan
sale agreements that provide limited recourse against the Company or
subordination of cash and excess interest spread relating to the sold loans by
the Company.Such recourse and subordination relate to credit losses which may
occur after the sale of the loans and continues until the earlier of the
payment in full of the loans or termination of the agreement pursuant to which
the loans were sold.The Company is also obligated to repurchase or replace
loans which may be determined after the sale to violate representations and
warranties relating to them and which are made by the Company at the time of
the sale.See "--Recent legal developments related to mortgage loans" below.The
Company regularly evaluates the quality of the loan portfolio and estimates its
risk of loss based upon historical loss experience, prevailing economic
conditions, estimated collateral value and such other factors which, in
management's judgment, are relevant in estimating the credit risk in owned
and/or serviced loans. Estimated losses on the owned portfolio are provided for
by an increase in the allowance for loan losses through a charge to current
operating income.For loans sold with limited recourse or subordination of
certain cash and excess interest spread relating to the sold loans, the Company
reduces the amount of gain recognized on the sale by the estimated amount of
credit losses, subject to the recourse limitation or maximum subordination
amount of the related loan sale agreements, and records such amount on its
balance sheet in the allowance for loss on loans serviced.At June 30, 1994, the
maximum recourse associated with sales of home equity loans according to terms
of the loan sale agreements totaled approximately $195.5 million, of which
amount approximately $179.6 million relates to the subordinated cash and excess
interest spread.However, the Company's estimate of its losses was approximately
$20.5 million at June 30, 1994, and is recorded in the Company's allowance for
loss on loans serviced.Should credit losses on loans sold with limited recourse
or subordination of certain cash and excess interest spread materially exceed
the Company's estimates for such losses, such consequence will have a material
adverse impact on the Company's operations.
At June 30, 1994, the contractual balance of loans serviced by UC
Lending was approximately $1.8 billion comprised of approximately $0.4 billion
serviced for the Company and approximately $1.4 billion serviced for
investors.The geographic distribution of this portfolio by state and by loan
category was as follows at June 30, 1994:
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<PAGE> 27
<TABLE>
<CAPTION>
Percent
State Home Equity Commercial Conventional Consumer Total of Total
----- ----------- ---------- ------------ --------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Florida . . . . . . . . $187,750 $86,815 $9,499 $18 $284,082 16.0%
Louisiana . . . . . . . . 134,153 13,192 41,058 21 188,424 10.6
Ohio . . . . . . . . . . 175,585 6,112 1,671 183,368 10.3
Tennessee . . . . . . . . 108,966 19,998 5,312 7 134,283 7.6
Alabama . . . . . . . . . 111,305 12,536 5,340 3 129,184 7.3
North Carolina . . . . . 119,099 15,906 1,877 136,882 7.7
Georgia . . . . . . . . . 73,022 47,097 2,651 11 122,781 6.9
Virginia . . . . . . . . 50,543 23,414 2,766 76,723 4.3
Indiana . . . . . . . . . 68,810 3,469 1,206 73,485 4.1
South Carolina . . . . . 63,440 1,271 1,271 65,982 3.7
Michigan . . . . . . . . 51,597 182 51,779 2.9
Other States . . . . . . 244,607 75,558 9,872 12 330,049 18.6
---------- --------- -------- ---- ----------- -----
Total. . . . . . . . . $1,388,877 $ 305,368 $ 82,705 $ 72 $ 1,777,022 100.0%
========== ========= ======== ==== =========== =====
</TABLE>
The following table provides a summary of loans owned and/or serviced
by UC Lending which are past due 30 days or more, foreclosed properties and
loans charged off as of the dates indicated.
<TABLE>
<CAPTION>
Foreclosed Properties
-----------------------
Contractual Delinquencies Owned Serviced for % of
Balance Contractual % of by the Third Party Net Loans Average
Period Ended of Loans Balance Amount Company Investors Charged Off Loans*
- ------------ -------------------------------------------------------------------------------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Six months ended June 30, 1994
- ------------------------------
Home equity . . . $ 1,388,877 $ 103,319 7.44% $ 10,849 $7,056 $ 6,931 1.10%
Commercial . . . 305,368 11,090 3.63% 27,196 10,336 1,133 0.28%
Conventional . . 82,705 2,972 3.59% 35 - 15 0.04%
Consumer . . . . 72 19 - - - (23) -
----------- --------- -------- -------- -------
Total. . . . . $ 1,777,022 $ 117,400 6.61% $ 38,080 $ 17,392 $ 8,056
=========== ========= ======== ======== =======
Year ended December 31, 1993
- ----------------------------
Home equity . . . $ 1,125,139 $ 92,974 8.26% $ 17,014 $ 8,355 $ 8,548 0.88%
Commercial . . . 345,365 19,292 5.59% 20,871 9,275 3,579 0.95%
Conventional . . 98,189 3,730 3.80% 148 - 112 0.09%
Consumer . . . . 88 17 - - - (35) -
----------- ---------- ---------- --------- --------
Total. . . . . $ 1,568,781 $ 116,013 7.40% $ 38,033 $ 17,630 $ 12,204
=========== ========== ========== ========= ========
Year ended December 31, 1992
- ----------------------------
Home equity . . . $ 819,448 $ 71,762 8.76% $ 13,092 $ 7,244 $ 4,498 .59%
Commercial . . . 404,857 29,954 7.40% 20,976 7,338 4,805 1.14%
Conventional . . 143,311 2,933 2.05% 291 - 4 -
Consumer . . . . 206 64 - - - 82 2.86%
----------- ---------- ---------- --------- --------
Total. . . . . $ 1,367,822 $ 104,713 7.66% $ 34,359 $ 14,582 $ 9,389
=========== ========== ========== ========= ========
</TABLE>
*Annualized for the six months ended June 30, 1994
-26-
<PAGE> 28
Management of the Company continues to focus on reducing the level of
non-earning assets owned and/or serviced by focusing on expediting the
foreclosure process.As the result of being more aggressive in liquidating
foreclosed property, the Company's net charge-offs on home equity loans in the
six months ended June 30, 1994 increased to $6.9 million compared to $4.6
million during the same period of 1993.During the first six months of 1994, the
balance of foreclosed home equity loans owned and/or serviced by the Company
was reduced by $7.5 million.The Company will continue to focus resources on
further reductions in the level of foreclosed properties.
The above delinquency and loan loss experience represents the
Company's recent experience.However, the delinquency, foreclosure and net loss
percentages may be affected by the increase in the size and relative lack of
seasoning of the portfolio.As a result, the information in the above tables
should not be considered as a basis for assessing the likelihood, amount or
severity of delinquencies or losses in the future on loans and no assurance can
be given that the delinquency and loss experience presented in the tables will
be indicative of such experience on loans.
A summary analysis of the changes in the Company's allowance for loan
losses for the indicated periods is as follows.
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended December 31,
---------------- --------------------------------
1994 1993 1993 1992 1991
------ ------ --------- ---------- ---------
(in thousands)
<S> <C> <C> <C> <C> <C>
Balance at beginning of period . . . $21,017 $15,842 $15,842 15,962 $10,472
Loans charged to allowance
Home equity . . . . . . . . . . . (7,367) (4,856) (9,114) (5,511) (3,487)
Commercial . . . . . . . . . . . . (1,141) (1,193) (3,579) (4,805) (2,753)
Conventional . . . . . . . . . . . (17) (49) (128) (4) (6)
Consumer . . . . . . . . . . . . . (1) (12) (14) (154) (321)
------- ------- ------- ------- --------
Total. . . . . . . . . . . . . . (8,526) (6,110) (12,835) (10,474) (6,567)
Recoveries on loans previously
charged to allowance. . . . . . . . 470 293 631 1,085 948
------- ------- ------- ------- --------
Net loans charged off . . . . . . . . (8,056) (5,817) (12,204) ( 9,389) (5,619)
------- ------- ------- ------- --------
Loan loss provisions . . . . . . . . 6,311 7,825 17,343 10,027 9,850
Reserve reclassification . . . . . . (107) (82) 36 ( 758) 1,259
------- ------- ------- ------- --------
Balance at end of period . . . . . . $19,165 $17,768 21,017 15,842 $15,962
======= ======= ======= ======= ========
Specific reserves . . . . . . . . . . $ 8,234 $ 7,750 $8,500 $7,067 $ 7,268
Unallocated reserves . . . . . . . . 10,931 10,018 12,517 8,775 8,694
------- ------- ------- ------- --------
Total reserves . . . . . . . . . . . $19,165 $17,768 21,017 15,842 $15,962
======= ======= ======= ======= ========
</TABLE>
Specific reserves are provided for foreclosures in which the carrying
value of the loan exceeds the market value of the collateral.Unallocated
reserves are provided for loans not in foreclosure and are calculated primarily
using objective measurement techniques.Unallocated reserves also include
reserves for active loans which have been modified or indicate potential
problems as well as reserves for a $32.5 million subordinated position the
Company acquired in connection with the securitization and sale of
approximately $230 million in commercial real estate mortgage loans in 1990.At
June 30, 1994, the Company owned $38.1 million of property acquired in
settlement of loans, excluding the specific reserves attributed to these
properties.These balances are included in the loans owned by the Company.The
specific reserve in the table above is provided to reduce the carrying value of
these properties to their market value.
-27-
<PAGE> 29
A summary of the amounts provided by the Company for future credit
losses on loans and foreclosed properties owned by the Company and loans sold
with recourse as of the dates indicated is as follows:
<TABLE>
<CAPTION>
June 30, December 31,
-------------------- -------------------------------
1994 1993 1993 1992 1991
-------- -------- ------- ------- --------
(in thousands)
<S> <C> <C> <C> <C> <C>
Allowance for loan losses
(Applicable to loans and foreclosed
properties owned by the Company) $ 19,165 $ 17,768 $21,017 $15,842 $ 15,962
Allowance for loss on loans serviced
(Applicable to loans
sold with recourse) . . . . . . . 20,549 9,041 12,938 7,015 3,737
-------- -------- ------- ------- --------
Total . . . . . . . . . . . . . $ 39,714 $ 26,809 $33,955 $22,857 $ 19,699
======== ======== ======= ======= ========
</TABLE>
As of June 30, 1994, approximately $1.1 billion of home equity loans
sold were serviced by UC Lending under agreements which provide limited
recourse, or subordination of cash and excess interest spread owned by the
Company, for credit losses ("loans sold with recourse"). The Company's estimate
of its losses, based on historical loan loss experience, was approximately
$20.5 million at June 30, 1994 and is recorded in the Company's allowance for
loss on loans serviced. Should credit losses on loans sold with limited
recourse, or subordination of cash and excess interest spread owned by the
Company, materially exceed the Company's estimate for such losses, such
consequence will have a material adverse impact on the Company's financial
statements.
Recent legal developments related to mortgage loans. The United States
Court of Appeals for the Eleventh Circuit held, in part, that a lender
improperly disclosed the collection of the Florida state intangible tax from
the borrower, thereby subjecting the loan to rescission under the TILA by the
borrower for three years after it was made. Subsequent to the Court's initial
decision and prior to its refusal to reconsider its decision, the Florida
Legislature amended the language of the intangible tax to clarify the
Legislature's previous intention that the intangible tax be disclosed for
purposes of the TILA in the manner that had been followed by most lenders in
Florida, including the Company. Although the Florida Legislature intended this
legislation to apply retroactively, no judicial determination has yet been made
as to the effect of this legislation on loans originated prior to its effective
date. This court decision may also apply to a similar intangible tax imposed by
other states. To its knowledge, as of September 26, 1994, no claims have been
filed against the Company under this recent court decision (other than as a
defense to a foreclosure proceeding) and no notice of a breach of a
representation has been received under the Company's loan sale agreements
requesting it to repurchase, cure or substitute other loans for the loans sold.
If the intent of the Florida Legislature is not upheld and if a substantial
number of claims are filed by borrowers against the Company resulting in
rescission or repurchase, the Company's financial statements and operations
will be materially adversely affected. As the financial impact, if any, of this
contingency cannot presently be reasonably estimated, the Company has made no
accrual therefor.
Bonds. Investment purchases are made with the intention of holding
fixed income securities until maturity. Prior to January 1, 1994 securities were
generally carried at cost adjusted for discount accretion and premium
amortization. At June 30, 1994, the amortized cost of the Company's bond
portfolio was $1.0 billion, consisting primarily of $713 million in
mortgage-backed securities and $258 million in corporate bonds. In connection
with the adoption of SFAS 115 (see note 4 to the consolidated financial
statements contained in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994), bonds with an amortized cost of approximately
$939 million or 93% of the Company's bond portfolio were classified in an
available-for-sale category and the carrying value adjusted to market value by
means of an adjustment to stockholders' equity. The remainder of the portfolio,
consisting primarily of private placements made either directly or through an
investment partnership, continues to be classified as held-to- maturity and
valued at cost. At June 30, 1994, the Company did not own any securities
classified as trading securities. The net unrealized loss in the bond portfolio
(cost over market value) at June 30, 1994 was $37.5 million compared to an
unrealized gain of $31.5 million at December 31, 1993.
-28-
<PAGE> 30
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal cash requirements consist of funding loan
originations in its mortgage operations and the payment of policyholder claims
and surrenders incurred in its insurance operations.The Company's mortgage
operations require continued access to short and long-term sources of debt
financing, the sale of loans to UC Life and the sale of loans and asset-backed
securities in the secondary market; whereas liquidity requirements for the
Company's insurance operations are generally met by funds provided from the
sale of annuities and cash flow from its investment in fixed income securities
and mortgage loans.
The following discussion reflects the primary sources of liquidity and
capital for each of the Company's primary operating divisions.
UC Lending.The principal cash requirements of the Company's mortgage
operations arise from loan originations, repayments of inter-company debt
borrowed by the Company under its $200 million revolving credit facility,
payments of operating and interest expenses and deposits to reserve accounts
related to loan sale transactions.Loan originations are initially funded
principally through the Company's $200 million revolving credit facility and
short-term bank facilities pending loan sales to UC Life and in the secondary
market.At June 30, 1994, the Company's debt facilities available to fund
general operating needs totaled $218 million, of which $186.8 million was
outstanding, compared to December 31, 1993 when $208.5 million in such debt
facilities was available with $155.5 million outstanding.Substantially all of
the loans originated by UC Lending are sold.Net cash used by investing
activities of the Company in 1993 and 1992 and for the six months ended June
30, 1994 and 1993, respectively, reflects approximately $600 million, $346
million, $436 million and $230 million, respectively, in cash used for loan
originations.The primary source of funding for loan originations is derived
from the reinvestment of proceeds from the ultimate sale of loans in the
secondary market which totaled approximately $464 million and $344 million in
1993 and 1992, respectively, and $460 million and $168 million in the first six
months of 1994 and 1993, respectively.In connection with the loan sale
transactions in the secondary market, surety bonds and cash deposits were
provided by the Company as credit enhancements.The loan sale transactions
required the subordination of certain cash flows payable to UC Lending to the
payment of scheduled principal and interest due to certificate holders.In
connection with these transaction, UC Lending was required, in some instances,
to fund an initial deposit, and thereafter, in each transaction, a portion of
the amounts receivable by UC Lending and its subsidiary from the excess
interest spread is required to be placed and maintained in a reserve account to
the extent of the subordination requirements.The subordination requirements
generally provide that the excess interest spread is payable to the reserve
account until a specified level of cash, which is less than the maximum
subordination amount, is accumulated therein.The capitalized excess servicing
income of the Company is subject to being utilized first to replenish cash paid
from the reserve account to fund shortfalls in collections from borrowers who
default on the payment of principal or interest on the loans underlying the
pass-through certificates issued until the total of the Company's deposits into
the reserve account equal the maximum subordination amount.In connection with
the issuance and sale of approximately $1.3 billion of pass-through
certificates through June 30, 1994, the aggregate subordination amounts were
initially set at approximately $179.6 million.After the Company's deposits into
the reserve account equal the maximum subordination amount for a transaction,
the subordination of the related excess interest spread for these purposes is
terminated.The excess interest spread required to be deposited and maintained
in the respective reserve accounts will not be available to support the cash
flow requirements of the Company until such amount exceeds the maximum
subordinated amount (other than amounts, if any, in excess of the specified
levels required to be maintained in the reserve accounts, which may be
distributed periodically to the Company).At June 30, 1994, the amounts on
deposit in such reserve accounts totaled $56.2 million.
Adequate credit facilities and other sources of funding, including the
ability of the Company to sell loans in the secondary market and to UC Life,
are essential for the continuation of the Company's loan origination
operations.The Company's available, but unfunded, debt capacity for general
operating needs as of June 30, 1994 was $31.2 million while such capacity as of
December 31, 1993 totaled $53 million.During the second quarter of 1994, peak
borrowings under such credit facilities reached $210.9 million. The Company's
$200 million revolving credit facility has a committed term to December 31,
1995.The interest rate on such credit facility is based upon various floating
rate indices as may be selected by the Company from time to time.There can be
no assurance that the Company's present credit facilities will be available in
the future on terms or in amounts which the Company would consider favorable.
-29-
<PAGE> 31
UC Life.The principal cash requirements of UC Life consist of
contractual obligations to policyholders, principally through policy claims and
surrenders.The primary sources of funding these obligations, in addition to
cash flow from investments, are the sale of annuities.Net cash flow from
underwriting operations is used to build an investment portfolio, which in turn
produces future cash flows from investment income and provides a secondary
source of liquidity for this division.Net cash provided by operating activities
of the insurance division in 1993 and 1992 was approximately $78 million and
$69 million, respectively, and in the six months ended June 30, 1994 and 1993
was approximately $31.7 million and $34.3 million, respectively, resulting
primarily from cash earnings on investments.The Company monitors available cash
and cash equivalents to maintain adequate balances for current payments while
maximizing cash available for longer term investment activities.The Company's
financing activities in 1993 and 1992 reflect approximately $208 million and
$187 million, respectively, and during the six months ended June 30, 1994 and
1993 reflect approximately $116 million and $120 million, respectively, in cash
received primarily from sales by UC Life of its annuity products.As reflected
in the net cash used by investing activities during the same periods,
investment purchases were approximately $293 million, $631 million, $182
million and $147 million, respectively, reflecting the investment of these
funds and the reinvestment of proceeds from maturities of investments.Cash used
by financing activities also reflects payments of $136 million and $131 million
in 1993 and 1992, respectively, and $85 million and $58 million for the six
months ended June 30, 1994 and 1993, respectively, primarily on annuity
products resulting from policyholder surrenders and claims.In response to the
decline in interest rates in 1992 and 1993, the Company reduced the crediting
rates on its annuity policies.At June 30, 1994, the interest margin on the
Company's annuity liabilities was 2.73% compared to 2.46% at December 31, 1993
and 2.24% at June 30, 1993.Notwithstanding reductions in renewal crediting
rates on its policies, the percentages of annuities surrendered has generally
remained stable.UC Life's investments at June 30, 1994, included approximately
$394 million in residential and commercial mortgage loans, $288 million in
corporate and government bonds and private debt placements and $711 million
inmortgage-backed securities.The investment portfolio is also managed to
provide a secondary source of liquidity as investments can be sold, if
necessary, to fund abnormal levels of policy surrenders, claims and expenses.An
unanticipated increase in surrenders would impact the Company's liquidity,
potentially requiring the sale of certain assets, such as bonds and loans prior
to their maturities, which may be at a loss.
As a holding company, the Company's ability to meet debt service
obligations and pay operating expenses and dividends depends on receipt of
sufficient funds from its subsidiaries.The payment of dividends by UC Life to
the Company is subject to restrictions set forth in the insurance laws and
regulations of Louisiana, its domiciliary state.The Louisiana Insurance Code
(the "Code") provides that no Louisiana stock insurer shall declare and pay any
dividends to its stockholders unless (i) its capital is fully paid in cash and
is unimpaired and (ii) it has a surplus beyond its capital stock and the
initial minimum surplus required and all other liabilities equal to 15% of its
capital stock, provided that this restriction shall not apply to an insurer
when its paid- in capital and surplus exceed the minimum required by the Code
by 100% or more.Additional dividend restrictions are imposed by the Louisiana
Insurance Holding Company System Regulatory Law.Specifically, extraordinary
dividends by an insurance company are subject to a prior approval requirement
by the Louisiana Commissioner of Insurance (the "Louisiana Commissioner") and
an insurance company's surplus as regards policyholders following any dividends
or distributions to affiliates must be reasonable in relation to the insurance
company's outstanding liabilities and adequate to its financial needs.An
extraordinary dividend is defined as an amount in excess of the lesser of (a)
10% of surplus as of the preceding December 31, or (b) the net gain from
operations for the preceding calendar year.If insurance regulators determine
that payment of a dividend or any other payment to an affiliate (such as a
payment under a tax allocation agreement or for employee or other services or
pursuant to a surplus debenture) would, because of the financial condition of
the paying insurance company or otherwise, be hazardous to such insurance
company's policyholders or creditors, the regulators may block payment of such
dividend or such other payment to the affiliate that would otherwise be
permitted without prior approval. Under the statutory and regulatory scheme in
Louisiana, UC Life had the capacity to pay dividends of $8.5 million at each of
June 30, 1994 and December 31, 1993 without prior regulatory approval.UC Life
did not pay any dividends to the Company during the first six months of 1994 or
at any time during 1991, 1992 or 1993 in order to retain capital in UC Life.
UG Title.Liquidity requirements for the Company's title insurance
business are generally met from funds provided by the sale of title insurance
policies and cash flow from its investment portfolio.UG Title's investments at
June 30, 1994 included approximately $3.3 million in residential mortgage
loans, $6.9 million in
-30-
<PAGE> 32
U.S. government and agency securities and $1.1 million in temporary
investments, primarily certificates of deposit. An unanticipated increase in
policy claims would impact UG Title's liquidity, potentially requiring the sale
of its investments prior to their maturities, which may be at a loss. The
principal liability of UG Title is the loss reserve established for title
policy claims.
ACCOUNTING STANDARDS
In May 1993, the FASB issued Statement of Financial Accounting
Standards No. 114 ("SFAS 114") which addresses the accounting by creditors for
impairment of loans and specifies how allowances for credit losses related to
certain loans should be determined. SFAS 114 also addresses the accounting by
creditors for all loans that are restructured in a troubled debt restructuring
involving modification of terms of a receivable. SFAS 114 is effective for
financial statements for fiscal years beginning after December 15, 1994. The
Company is reviewing the provisions of this pronouncement but has not yet
determined the effect of its implementation on the Company's financial
condition or results of operations.
DESCRIPTION OF SECURITIES
GENERAL
The following description of the terms of the Securities sets forth
certain general terms and provisions of the Securities to which any Prospectus
Supplement may relate. The particular terms of the Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to the Securities so offered will be described in the Prospectus
Supplement relating to such Securities.
DEBT SECURITIES
The Senior Debt Securities are to be issued under an indenture to be
dated as of a date prior to the first issuance of Senior Debt Securities, as
supplemented from time to time (the "Senior Indenture"), between the Company
and The First National Bank of Chicago, as Trustee (the "Senior Trustee"), and
the Subordinated Debt Securities are to be issued under an indenture to be
dated as of a date prior to the first issuance of Subordinated Debt Securities,
as supplemented from time to time (the "Subordinated Indenture"), between the
Company and State Street Bank and Trust Company, as Trustee (the "Subordinated
Trustee"). The term "Trustee" as used herein shall refer to either the Senior
Trustee or the Subordinated Trustee, as appropriate, for Senior Debt Securities
or Subordinated Debt Securities. The form of the Senior Indenture and the form
of the Subordinated Indenture (being referred to herein collectively as the
"Indentures" and individually as an "Indenture") are filed as exhibits to the
Registration Statement. The Indentures are subject to and governed by the Trust
Indenture Act of 1939, as amended (the "TIA"). The statements made under this
heading relating to the Debt Securities and the Indentures are summaries of the
provisions thereof, do not purport to be complete and are qualified in their
entirety by reference to the Indentures, including the definitions of certain
terms therein and in the TIA. Certain capitalized terms used below but not
defined herein have the meanings ascribed to them in the applicable
Indenture. Unless otherwise noted below, section references below are to both
Indentures.
The particular terms of the Debt Securities being offered (the
"Offered Debt Securities"), any modifications of or additions to the general
terms of the Debt Securities as described herein that may be applicable in the
case of the Offered Debt Securities and any applicable Federal income tax
considerations will be described in the Prospectus Supplement relating to the
Offered Debt Securities. Accordingly, for a description of the terms of the
Offered Debt Securities, reference must be made both to the Prospectus
Supplement relating thereto and the description of Debt Securities set forth in
this Prospectus.
General
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The Debt Securities will be direct, unsecured obligations of the
Company.The indebtedness represented by the Senior Debt Securities will rank
equally with all other unsecured and unsubordinated indebtedness of the
Company.The indebtedness represented by the Subordinated Debt Securities will
be subordinated in right of payment to the prior payment in full of the Senior
Indebtedness of the Company (including the Senior Debt Securities) as described
under "--Subordination" below.The Debt Securities may be issued in one or more
series.
The Company primarily conducts its operations through its
Subsidiaries.The rights of the Company and its creditors, including the Holders
of the Debt Securities, to participate in the assets of any Subsidiary upon the
latter's liquidation or reorganization will be subject to the prior claims of
the Subsidiary's creditors except to the extent that the Company may itself be
a creditor with recognized claims against the Subsidiary.
The accompanying Prospectus Supplement will set forth the terms of the
Offered Debt Securities, which may include the following:
(1) The title of the Offered Debt Securities and whether they
are Senior Debt Securities or Subordinated Debt Securities.
(2) The aggregate principal amount of the Offered Debt
Securities and any limit on the aggregate principal amount of the
Offered Debt Securities.
(3) The percentage of the principal amount at which the Offered
Debt Securities 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 thereof or the method by
which such portion shall be determined.
(4) The date or dates on which or periods during which the
Offered Debt Securities 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 Offered Debt Securities
will be payable.
(5) The rate or rates at which the Offered Debt Securities will
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, the interest payment dates on which such interest will be
payable and, if the Offered Debt Securities are Registered Securities,
the regular record dates, if any, for the interest payable on such
interest payment dates, and, if the Offered Debt Securities are
floating rate securities, the notice, if any, to Holders regarding the
determination of interest and the manner of giving such notice.
(6) The place or places where the principal of (and premium, if
any) and interest on the Offered Debt Securities shall be payable; the
extent to which, or the manner in which, any interest payable on any
Global Note (as defined below) on an interest payment date will be
paid, and the manner in which any principal of, or premium, if any,
on, any Global Note will be paid.
(7) The obligation, if any, of the Company to redeem, repay or
purchase the Offered Debt Securities pursuant to any mandatory
redemption, sinking fund or analogous provisions 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 Offered Debt Securities shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation.
(8) The right, if any, of the Company to redeem the Offered
Debt Securities 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 Offered Debt Securities may be
redeemed, if any, in whole or in part, at the option of the Company or
otherwise.
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(9) If the coin or currency in which the Offered Debt
Securities shall be issuable is U.S. dollars, the denominations of the
Offered Debt Securities if other than denominations of $1,000 and any
integral multiple thereof.
(10) Whether the Offered Debt Securities are to be issued as
original issue discount securities ("Discount Securities") and the
amount of discount at which such Offered Debt Securities may be issued
and, if other than the principal amount thereof, the portion of the
principal amount of Offered Debt Securities which shall be payable
upon declaration of acceleration of the Maturity thereof upon an Event
of Default.
(11) Provisions, if any, for the defeasance of Offered Debt
Securities or certain of the Company's obligations with respect to the
Offered Debt Securities.
(12) Whether the Offered Debt Securities are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are issued, whether any interest coupons appertaining
thereto ("Coupons") will be attached thereto, whether such Bearer
Securities may be exchanged for Registered Securities and the
circumstances under which, and the place or places at which, any such
exchanges, if permitted, may be made.
(13) Whether provisions for payment of additional amounts or
tax redemptions shall apply and, if such provisions shall apply, such
provisions; and, if any of the Offered Debt Securities are to be
issued as Bearer Securities, the applicable procedures and
certificates relating to the exchange of temporary Global Notes for
definitive Bearer Securities.
(14) If other than U.S. dollars, the currency, currencies or
currency units (the term "currency" as used herein will include
currency units) in which the Offered Debt Securities shall be
denominated or in which payment of the principal of (and premium, if
any) and interest on the Offered Debt Securities may be made, and
particular provisions applicable thereto and, if applicable, the
amount of Offered Debt Securities which entitles the Holder of an
Offered Debt Security or its proxy to one vote for purposes of voting
at a meeting of Holders of the Offered Debt Securities.
(15) If the principal of (and premium, if any) or interest on
the Offered Debt Securities are to be payable, at the election of the
Company or a Holder thereof, in a currency other than that in which
the Debt Securities are denominated or payable without such election,
in addition to or in lieu of the applicable provisions of the
Indentures, the period or periods within which and the terms and
conditions upon which, such election may be made and the time and the
manner of determining the exchange rate or rates between the currency
or currencies in which the Offered Debt Securities are denominated or
payable without such election and the currency or currencies in which
the Offered Debt Securities are to be paid if such election is made.
(16) The date as of which any Offered Debt Securities shall be
dated.
(17) If the amount of payments of principal of (and premium, if
any) or interest on the Offered Debt Securities 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 Offered Debt
Securities are denominated or payable, or any other type of index, the
manner in which such amounts shall be determined.
(18) If the Offered Debt Securities are denominated or payable
in foreign currency, any other terms concerning the payment of
principal of (and premium, if any) or any interest on the Offered Debt
Securities (including the currency or currencies of payment thereof).
(19) The designation of the original Currenty Determination
Ageny, if any.
(20) The applicable Overdue Rate, if any.
(21) If the Offered Debt Securities do not bear interest, the
applicable dates upon which the Company will furnish or cause to be
furnished to the Trustee a list of the names and addresses of the
Registered Holders of the Offered Debt Securities.
(22) Any addition to, or modification or deletion of, any
Events of Default or covenants provided for in the applicable
Indenture with respect to the Offered Debt Securities.
(23) If any of the Offered Debt Securities are to be issued as
Bearer Securities, (x) whether interest in respect of any portion of a
temporary Debt Security in global form (representing all of the
Outstanding Bearer Securities of the series) payable in respect of any
interest payment date prior to the exchange of such temporary Offered
Debt Security for definitive Offered Debt Securities shall be
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<PAGE> 35
paid to any clearing organization with respect to the portion of such
temporary Offered Debt Security held for its account and, in such
event, the terms and conditions (including any certification
requirements) upon which any such interest payment received by a
clearing organization will be credited to the Persons entitled to
interest payable on such interest payment date, (y) the terms upon
which interests in such temporary Offered Debt Security in global form
may be exchanged for interests in a permanent Global Note or for
definitive Offered Debt Securities and the terms upon which interests
in a permanent Global Note, if any, may be exchanged for definitive
Offered Debt Securities and (z) the cities in which the Authorized
Newspapers designated for the purposes of giving notices to Holders
are published.
(24) Whether the Offered Debt Securities shall be issued in
whole or in part in the form of one or more Global Notes and, in such
case, the depositary or any common depositary for such Global Notes;
and if the Offered Debt Securities are issuable only as Registered
Securities, the manner in which and the circumstances under which
Global Notes representing Offered Debt Securities may be exchanged for
Registered Securities in definitive form.
(25) The designation, if any, of any depositaries, trustees
(other than the applicable Trustee), paying agents, authenticating
agents, security registrars (other than the Trustee) or other agents
with respect to the Offered Debt Securities.
(26) If the Offered Debt Securities are to 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.
(27) If the Offered Debt Securities are Subordinated Debt
Securities, whether they will be convertible or exchangeable into
shares of Common Stock and, if so, the terms and conditions, which may
in addition to or in lieu of the provisions contained in the
Subordinated Indenture, upon which such Offered Debt Securities will
be so convertible or exchangeable, including the conversion or
exchange price and the conversion or exchange period.
(28) Any other terms of the Offered Debt Securities not
specified in the Indenture under which such Offered Debt Securities
are to be issued (which other terms shall not be inconsistent with the
provisions of such Indenture).
Each Indenture provides that the aggregate principal amount of Debt
Securities that may be issued thereunder is unlimited. The Debt Securities may
be issued in one or more series thereunder, in each case as authorized from
time to time by the Board of Directors of the Company, or any committee thereof
or any duly authorized officer or pursuant to any modification of an Indenture.
(Section 3.01)
In the event that Discount Securities are issued, the Federal income
tax consequences and other special considerations applicable to such Discount
Securities will be described in the Prospectus Supplement relating thereto.
The general provisions of the Indentures do not contain any provisions
that would limit the ability of the Company or its Subsidiaries to incur
indebtedness or that would afford holders of Debt Securities protection in the
event of a highly leveraged or similar transaction involving the Company or its
Subsidiaries. Reference is made to the accompanying Prospectus Supplement for
information with respect to any deletions from, modifications of or additions,
if any, to the Events of Default or covenants of the Company described below
that are applicable to the Offered Debt Securities, including any addition of
covenants or other provisions providing event risk or similar protection.
All of the Debt Securities of a series need not be issued at the same
time, and may vary as to denomination, interest rate, maturity and other
provisions and unless otherwise provided, a series may be reopened for issuance
of additional Debt Securities of such series. (Section 3.01)
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Denominations, Registration and Transfer
Unless specified in the Prospectus Supplement, the Debt Securities of
any series shall be issuable only as Registered Securities in denominations of
$1,000 and any integral multiple thereof and shall be payable only in U.S.
dollars. (Section 3.02) The Indentures also provide that Debt Securities of a
series may be issuable in global form. See "--Book-Entry Debt Securities."
Unless otherwise indicated in the Prospectus Supplement, Bearer Securities
(other than in global form) will have Coupons attached. (Section 2.01)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of like aggregate principal amount and
of like Stated Maturity and with like terms and conditions. If so specified in
the Prospectus Supplement, at the option of the Holder thereof, to the extent
permitted by law, any Bearer Security of any series which by its terms is
registrable as to principal and interest may be exchanged for a Registered
Security of such series of like aggregate principal amount and of a like Stated
Maturity and with like terms and conditions, upon surrender of such Bearer
Security at the corporate trust office of the applicable Trustee or at any
other office or agency of the Company designated for the purpose of making any
such exchanges. Subject to certain exceptions, any Bearer Security issued with
Coupons surrendered for exchange must be surrendered with all unmatured Coupons
and any matured Coupons in default attached thereto. (Section 3.05)
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Debt Securities in effect at the time of
such exchange. (Section 3.05)
Except as otherwise specified in the Prospectus Supplement, in no
event may Registered Securities, including Registered Securities received in
exchange for Bearer Securities, be exchanged for Bearer Securities. (Section
3.05)
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained for such
purpose, the Company shall deliver, in the name of the designated transferee,
one or more new Registered Securities of the same series of like aggregate
principal amount of such denominations as are authorized for Registered
Securities of such series and of a like Stated Maturity and with like terms and
conditions. No service charge will be made for any transfer or exchange of Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. (Section
3.05)
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 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 3.05)
Events of Default
Under the Indentures, "Event of Default" with respect to the 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):(1) default in the payment of any interest
upon any Debt Security or any payment with respect to the Coupons, if any, of
such series when it becomes due and payable, and continuance of such default
for a period of 30 days; (2) default in the payment of the principal of (and
premium, if any, on) any Debt Security of such series at its Maturity; (3)
default in the deposit of any sinking fund payment, when and as due by the
terms of a Debt Security of such series; (4) default in the performance, or
breach of any covenant or warranty in the applicable Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in the applicable Indenture specifically dealt with or which
expressly has been included in the applicable 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 to the
Company by the applicable Trustee or to the Company and the applicable
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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; (5) certain events of bankruptcy,
insolvency or reorganization with respect to the Company; or (6) any other
Event of Default provided with respect to Debt Securities of that series
pursuant to the applicable Indenture.(Section 5.01)
Each Indenture requires the Company to file with the applicable
Trustee, annually, an officers' certificate as to the Company's compliance with
all conditions and covenants under the applicable Indenture.(Section 12.02)Each
Indenture provides that the applicable Trustee may withhold notice to the
Holders of a series of Debt Securities of any default (except payment defaults
on such Debt Securities) if it considers such withholding to be in the interest
of the Holders of such series of Debt Securities to do so.(Section 6.02)
If an Event of Default with respect to Debt Securities of any series
at the time Outstanding occurs and is continuing, then in every case the
applicable 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 the Debt Securities of such series
to be due and payable immediately, by a notice in writing to the Company (and
to the applicable Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount), plus accrued and unpaid interest
(and premium, if any) shall become immediately due and payable.Upon payment of
such amount in the currency in which such Debt Securities are denominated
(except as otherwise provided in the applicable Indenture or specified in the
Prospectus Supplement), all obligations of the Company in respect of the
payment of principal of the Debt Securities of such series shall
terminate.(Section 5.02)
Subject to the provisions of each Indenture relating to the duties of
the applicable Trustee, in case an Event of Default with respect to Debt
Securities of a particular series shall occur and be continuing, the applicable
Trustee shall be under no obligation to exercise any of its rights or powers
under such Indenture at the request, order or direction of any of the Holders
of Debt Securities of that series, unless such Holders shall have offered to
the applicable Trustee reasonable indemnity against the expenses and
liabilities which might be incurred by it in compliance with such
request.(Section 5.07) Subject to such provisions for the indemnification of
the applicable Trustee, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the applicable Trustee under such Indenture, or exercising any trust or power
conferred on the applicable Trustee with respect to the Debt Securities of that
series provided that such direction does not conflict with law or with the
applicable Indenture.(Section 5.12)
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 applicable Trustee as
provided in the Indentures, the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series, by written notice to the
Company and the applicable Trustee, may rescind and annul such declaration and
its consequences if (1) the Company has paid or deposited with the applicable
Trustee a sum in the currency in which such Debt Securities are denominated
(except as otherwise provided in the applicable Indenture or specified in the
Prospectus Supplement) sufficient to pay (A) all overdue installments of
interest on all Debt Securities or all overdue payments with respect to any
Coupons of such series, (B) 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, (C) to the extent that payment of
such interest is lawful, interest upon overdue installments of interest on each
Debt Security of such series or upon overdue payments on any Coupons of such
series at a rate established for such series, and (D) all sums paid or advanced
by the applicable Trustee and the reasonable compensation, expenses,
disbursements and advances of the applicable Trustee, its agents and counsel;
and (2) 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 have become due solely by such declaration of acceleration, have been
cured or waived as provided in the applicable Indenture.No such rescission and
waiver will affect any subsequent default or impair any right consequent
thereon.(Section 5.02)
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Modification or Waiver
Without prior notice to or consent of any Holders, the Company and the
applicable Trustee, at any time and from time to time, may modify the
applicable Indenture for any of the following purposes:(1) to evidence the
succession of another corporation to the rights of the Company and the
assumption by such successor of the covenants and obligations of the Company in
the applicable Indenture and in the Debt Securities and Coupons, if any, issued
thereunder; (2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Debt Securities and the Coupons, if any,
appertaining thereto (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
conferred in the applicable Indenture upon the Company; (3) 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); (4) to add or
change any of the provisions of the applicable Indenture to such extent as
shall be necessary to permit or facilitate the issuance thereunder of Debt
Securities of any series in bearer form, registrable or not registrable, and
with or without Coupons, to permit Bearer Securities to be issued in exchange
for Registered Securities, to permit Bearer Securities to be issued in exchange
for Bearer Securities of other authorized denominations or to permit the
issuance of Debt Securities of any series in uncertificated form, provided that
any such action shall not adversely affect the interests of the Holders of Debt
Securities of any series or any related Coupons in any material respect; (5) to
change or eliminate any of the provisions of the applicable Indenture, provided
that any such change or elimination will become effective only when there is no
Outstanding Debt Security issued thereunder or Coupon of any series created
prior to such modification which is entitled to the benefit of such provision
and as to which such modification would apply; (6) to secure the Debt
Securities issued thereunder; (7) to supplement any of the provisions of the
applicable Indenture to such extent as is necessary to permit or facilitate the
defeasance and discharge of any series of Debt Securities, provided that any
such action will not adversely affect the interests of the Holders of Debt
Securities of such series or any other series of Debt Securities issued under
such Indenture or any related Coupons in any material respect; (8) to establish
the form or terms of Debt Securities and Coupons, if any, as permitted by the
applicable Indenture; (9) to evidence and provide for the acceptance of
appointment thereunder 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 the
applicable Indenture as is necessary to provide for or facilitate the
administration of the trusts thereunder by more than one Trustee; or (10) to
cure any ambiguity, to correct or supplement any provision in the applicable
Indenture which may be defective or inconsistent with any other provision
therein, to eliminate any conflict between the terms of the applicable
Indenture and the Debt Securities issued thereunder and the TIA or to make any
other provisions with respect to matters or questions arising under the
applicable Indenture which will not be inconsistent with any provision of the
applicable Indenture; provided such other provisions shall not adversely affect
the interests of the Holders of Outstanding Debt Securities or Coupons, if any,
of any series created thereunder prior to such modification in any material
respect.(Section 11.01)
With 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, the Company and the applicable Trustee may
modify the applicable Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the applicable
Indenture or of modifying in any manner the rights of the Holders of Debt
Securities and Coupons, if any, under the applicable Indenture; provided,
however, that no such modification may, without the consent of the Holder of
each Outstanding Debt Security of each such series affected thereby (1) change
the Stated Maturity of the principal of, or any installment of interest on, any
Debt Security, or reduce the principal amount thereof or the interest thereon
or any premium payable upon redemption thereof, or change the Stated Maturity
of or reduce the amount of any payment to be made with respect to any Coupon,
or change the currency or currencies in which the principal of (and premium, if
any) or interest on such Debt Security is denominated or payable, 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, or adversely affect
the right of repayment or repurchase, if any, at the option of the Holder, or
reduce the amount of, or postpone the date fixed for, any payment under any
sinking fund or analogous provisions for any Debt Security, 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), or limit the obligation of the Company to maintain a paying agency
outside the United States for payments on Bearer
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Securities, or adversely affect the right to convert any Subordinated Debt
Security into shares of Common Stock as may be set forth in the Prospectus
Supplement; (2) reduce the percentage in principal amount of the Outstanding
Debt Securities of any series, the consent of whose Holders is required for any
such modification, or the consent of whose Holders is required for any waiver
of compliance with certain provisions of the applicable Indenture or certain
defaults or Events of Default thereunder and their consequences provided for
in such Indenture; (3) modify any of the provisions of the applicable Indenture
relating to modifications and waivers of defaults and covenants, except to
increase any such percentage or to provide that certain other provisions of
the applicable 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 certain of such modifications may be made without the
consent of any Holder of any Debt Security; or (4) in the case of the
Subordinated Indenture, modify any of the provisions relating to the
subordination of the Subordinated Debt Securities in a manner adverse to the
Holders thereof. (Section 11.02)
A modification which changes or eliminates any covenant or other
provision of the applicable Indenture with respect to one or more particular
series of Debt Securities and Coupons, if any, or which modifies the rights of
the Holders of Debt Securities and Coupons of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under the
applicable Indenture of the Holders of Debt Securities and Coupons, if any, of
any other series. (Section 11.02)
In the case of the Subordinated Indenture, no modification may
adversely affect the rights of any holder of Senior Indebtedness under the
subordination provisions of the Subordinated Indenture without the consent of
such holder. (Section 11.08 of the Subordinated Indenture)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
the Debt Securities of any such series waive, by notice to the applicable
Trustee and the Company, any past default or Event of Default under the
applicable Indenture with respect to such series and its consequences, except a
default (1) 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 (2) in respect of a covenant or provision hereof which pursuant to
the second paragraph under "--Modification and Waiver" 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 will cease to exist,
and any Event of Default arising therefrom will be deemed to have been cured,
for every purpose of the Debt Securities of such series under the applicable
Indenture, but no such waiver will extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. (Section 5.13)
The Company may omit in any particular instance to comply with certain
covenants in the applicable Indenture (including, if so specified in the
Prospectus Supplement, any covenant not set forth in the applicable Indenture
but specified in the Prospectus Supplement to be applicable to the Debt
Securities of any series issued thereunder, except as otherwise specified in
the Prospectus Supplement, and including the covenants relating to the
maintenance by the Company of its existence, rights and franchises, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Debt Securities of such series either waive such
compliance in such instance or generally waive compliance with such provisions,
but no such waiver may extend to or affect any term, provision or condition
except to the extent expressly so waived, and, until such waiver becomes
effective, the obligations of the Company and the duties of the applicable
Trustee in respect of any such provision will remain in full force and
effect. (Section 12.09 of the Senior Indenture; Section 12.07 of the
Subordinated Indenture)
Subordination
Upon any distribution of assets of the Company upon the dissolution,
winding up, liquidation or reorganization of the Company, the payment of the
principal of (and premium, if any) and interest on the Subordinated Debt
Securities will be subordinated to the extent provided in the Subordinated
Indenture in right of payment to the prior payment in full of all Senior
Indebtedness, including Senior Debt Securities (Sections 16.01 and 16.02 of the
Subordinated Indenture), but the obligation of the Company to make payment of
principal (and premium if any) or interest on the Subordinated Debt Securities
will not otherwise be affected. (Section 16.02 of the Subordinated Indenture)No
payment on account of principal (or premium, if any), sinking funds or interest
may be made on the Subordinated Debt Securities (including, without limitation,
payment of any Coupons) unless full payment of amounts then due
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for principal, premium, if any, sinking funds and interest on Senior
Indebtedness has been made or duly provided for. (Section 16.03 of the
Subordinated Indenture) In the event that, notwithstanding the foregoing, any
payment by the Company described in the foregoing sentence is received by the
Trustee under the Subordinated Indenture, any Paying Agent or the Holders of
any of the Subordinated Debt Securities before all Senior Indebtedness is paid
in full, such payment or distribution shall be paid over to the holders of such
Senior Indebtedness or on their behalf for application to the payment of all
such Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness. Subject to payment in
full of Senior Indebtedness, the Holders of the Subordinated Debt Securities
will be subrogated to the rights of the holders of the Senior Indebtedness to
the extent of payments made to the holders of such Senior Indebtedness out of
the distributive share of the Subordinated Debt Securities. (Section 16.02 of
the Subordinated Indenture)
By reason of such subordination, in the event of a distribution of
assets upon insolvency, certain general creditors of the Company may recover
more, ratably, than Holders of the Subordinated Debt Securities. The
Subordinated Indenture provides that the subordination provisions thereof shall
not apply to money and securities held in trust pursuant to the satisfaction
and discharge and the legal defeasance provisions of the Subordinated
Indenture. (Sections 4.02 and 15.02 of the Subordinated Indenture)
If this Prospectus is being delivered in connection with the offering
of a series of Subordinated Debt Securities, the accompanying Prospectus
Supplement or the information incorporated by reference therein will set forth
the approximate amount of Senior Indebtedness outstanding as of a recent date.
Discharge, Legal Defeasance and Covenant Defeasance
The applicable Indenture with respect to the Debt Securities of any
series may be discharged, subject to certain terms and conditions, when (1)
either (A) all Debt Securities and the Coupons, if any, of such series have
been delivered to the applicable Trustee for cancellation, or (B) all Debt
Securities and the Coupons, if any, of such series not theretofore delivered to
the applicable Trustee for cancellation (i) have become due and payable, (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 applicable Trustee for the giving of notice by the applicable Trustee,
and the Company, in the case of (i), (ii) or (iii) of subclause (B), has
irrevocably deposited or caused to be deposited with the applicable Trustee as
trust funds in trust for such purpose an amount in the currency in which such
Debt Securities are denominated 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
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
applicable Trustee is required to return the deposited money to the Company,
the obligations of the Company under the applicable Indenture with respect to
such Debt Securities will not be deemed terminated or discharged; (2) the
Company has paid or caused to be paid all other sums payable under the
applicable Indenture by the Company; (3) the Company has delivered to the
applicable Trustee an officers' certificate and an opinion of counsel each
stating that all conditions precedent therein provided relating to the
satisfaction and discharge of the applicable Indenture with respect to such
series have been complied with; and (4) the Company has delivered to the
applicable Trustee an opinion of counsel or a ruling of the Internal Revenue
Service to the effect that such deposit and discharge will not cause the
Holders of the Debt Securities of the series to recognize income, gain or loss
for Federal income tax purposes. (Section 4.01)
If provision is made for the defeasance of Debt Securities of a
series, and if the Debt Securities of such series are Registered Securities and
denominated and payable only in U.S. dollars, then the provisions of each
Indenture relating to defeasance shall be applicable except as otherwise
specified in the Prospectus Supplement for Debt Securities of such
series. Defeasance provisions, if any, for Debt Securities denominated in a
foreign currency or currencies or for Bearer Securities may be specified in the
Prospectus Supplement. (Section 15.01)
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 obligation of the
Company or certain restrictive covenants of the applicable
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Indenture ("covenant defeasance option") at any time after the applicable
conditions set forth below have been satisfied: (1) the Company shall have
deposited or caused to be deposited irrevocably with the applicable 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 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 applicable 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; (2) such
deposit shall not cause the applicable Trustee with respect to the Debt
Securities of that series to have a conflicting interest with respect to the
Debt Securities of any series; (3) such deposit will not result in a breach or
violation of, or constitute a default under, the applicable Indenture or any
other agreement or instrument to which the Company is a party or by which it is
bound; (4) if the Debt Securities of such series are then listed on any
national securities exchange, the Company shall have delivered to the
applicable Trustee an opinion of counsel or a letter or other document from
such exchange to the effect that the Company's exercise of its legal defeasance
option or the covenant defeasance option, as the case may be, would not cause
such Debt Securities to be delisted; (5) no Event of Default or event
(including such deposit) which, with notice or lapse of time or both, would
become an Event of 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 the
provisions of the applicable Indenture relating to certain events of bankruptcy
or insolvency or event which with the giving of notice or lapse of time, or
both, would become an Event of Default under such bankruptcy or insolvency
provisions shall have occurred and be continuing on the 91st day after such
date; and (6) certain other opinions, officers' certificates and other
documents specified in the applicable Indenture, including an opinion of
counsel or a ruling of the Internal Revenue Service to the effect that such
deposit, defeasance or Discharge will not cause the Holders of the Debt
Securities of such series to recognize income, gain or loss for Federal income
tax purposes. Notwithstanding the foregoing, if the Company exercises its
covenant defeasance option and an Event of Default under the provisions of the
Indentures relating to certain events of bankruptcy or insolvency or event
which with the giving of notice or lapse of time, or both, would become an
Event of Default under such bankruptcy or insolvency provisions 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 in
full. (Section 15.02)
Payment and Paying Agents
If Debt Securities of a series are issuable only as Registered
Securities, 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 and where notices and
demands to or upon the Company in respect of the Debt Securities of that series
and the applicable Indenture may be served. (Section 12.03)
If Debt Securities of a series are issuable as Bearer Securities, the
Company will maintain (A) in the Borough of Manhattan, The City and State of
New York, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment, where any Registered Securities of
that series may be surrendered for registration of transfer, where Debt
Securities of that series may be surrendered for exchange or redemption,
where Subordinated Debt Securities of that series that are convertible may be
surrendered for conversion, where notices and demands to or upon the Company in
respect of the Debt Securities of that series and the applicable Indenture may
be served and where Bearer Securities of that series and related Coupons may be
presented or surrendered for payment in the circumstances described in the
following paragraph (and not otherwise), (B) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Debt Securities of that
series and related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Debt Securities of that
series, if so provided in such series; provided, however, that if the Debt
Securities of that 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
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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 (C) 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 Registered
Securities of that series may be surrendered for registration of transfer,
where Debt Securities of that series may be surrendered for exchange or
redemption, where Subordinated Debt Securities of that series that are
convertible may be surrendered for conversion and where notices and demands to
or upon the Company in respect of the Debt Securities of that series and the
applicable Indenture may be served. The Company will give prompt written notice
to the applicable Trustee of the locations, and any change in the locations, of
such offices or agencies. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the applicable Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the corporate trust office of the applicable Trustee,
except that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment at the offices specified in the
applicable Debt Security and the Company has appointed the applicable Trustee
(or in the case of Bearer Securities may appoint such other agent as may be
specified in the applicable Prospectus Supplement) as its agent to receive all
presentations, surrenders, notices and demands. (Section 12.03)
No payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that,
if the Debt Securities of a series are denominated and payable in U.S. dollars,
payment of principal of and any premium and interest on Bearer Securities of
such series, if specified in the applicable Prospectus Supplement, shall be
made at the office of the applicable Trustee or the Company's Paying Agent in
the Borough of Manhattan, the City and State of New York, if (but only if)
payment in U.S. dollars of the full amount of such principal, premium, interest
or additional amounts, as the case may be, at all offices or agencies outside
the United States maintained for the purpose by the Company in accordance with
the applicable Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions. (Section 12.03)
Book-Entry Debt Securities
The Debt Securities of a series may be issued in whole or in part in
global form that will be deposited with, or on behalf of, a depositary
identified in the Prospectus Supplement. Global Notes may be issued in either
registered or bearer form and in either temporary or permanent form (each a
"Global Note"). Payments of principal of (premium, if any) and interest on Debt
Securities represented by a Global Note will be made by the Company to the
applicable Trustee and then by such Trustee to the depositary.
If specified in the applicable Prospectus Supplement, any Global Notes
will be deposited with, or on behalf of, The Depository Trust Company, New
York, New York ("DTC"), as depositary, or such other depositary as may be
specified in the applicable Prospectus Supplement. In the event that DTC acts as
depositary with respect to any Global Notes, the Company anticipates that such
Global Notes will be registered in the name of DTC's nominee, and that the
following provisions will apply to the depositary arrangements with respect to
any such Global Notes. Additional or differing terms of the depositary
arrangements, if any, applicable to the Offered Debt Securities, will be
described in the accompanying Prospectus Supplement.
So long as DTC or its nominee is the registered owner of a Global
Note, DTC or its nominee, as the case may be, will be considered the sole
Holder of the Debt Securities represented by such Global Note for all purposes
under the applicable Indenture. Except as provided below, owners of beneficial
interests in a Global Note will not be entitled to have Debt Securities
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery or Debt Securities in certificated
form and will not be considered the owners or Holders thereof under the
applicable Indenture. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in certificated form;
accordingly, such laws may limit the transferability of beneficial interests in
a Global Note.
If DTC is at any time unwilling or unable to continue as depositary
and a successor depositary is not appointed by the Company within 90 days, the
Company will issue individual Debt Securities in certificated form in exchange
for the Global Notes. In addition, the Company may at any time, and in its sole
discretion, determine not to have any Debt Securities represented by one or
more Global Notes and, in such event, will
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issue individual Debt Securities in certificated form in exchange for the
relevant Global Notes. If Registered 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 issue individual Debt Securities in certificated
form in exchange for the relevant Global Notes. (Section 3.04)
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the Banking Law
of the State of New York, a "banking organization" within the meaning of the
Banking Law of the State of New York, a member of the Federal Reserve System, a
clearing corporation within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Commission.
Purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser of
each Debt Security ("Beneficial Owner") is in turn recorded on the Direct and
Indirect Participants' records. A Beneficial Owner does not receive written
confirmation from DTC of its purchase, but such Beneficial Owner is expected to
receive a written confirmation providing details of the transaction, as well as
periodic statements of its holdings, from the Direct or Indirect Participant
through which such Beneficial Owner entered into the transaction. Transfers of
ownership interests in Debt Securities are accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
do not receive certificates representing their ownership interests in Debt
Securities, except in the event that use of the book entry system for the Debt
Securities is discontinued.
To facilitate subsequent transfers, the Debt Securities are registered
in the name of DTC's partnership nominee, Cede & Co. The deposit of the Debt
Securities with DTC and their registration in the name of Cede & Co. effects no
change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Debt Securities; DTC records reflect only the identity of the
Direct Participants to whose accounts Debt Securities are credited, which may
or may not be the Beneficial Owners. The Participants remain responsible for
keeping account of their holdings on behalf of their customers.
Delivery of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners are governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Debt Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus
Proxy") to the issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Debt Securities are credited on the record
date (identified on a list attached to the Omnibus Proxy).
Principal and interest payments on the Debt Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on the payable
date in accordance with their respective holdings as shown on DTC's records
unless DTC has reason to believe that it will not receive payment on the
payable date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices,
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as is the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such
Participant and not of DTC, the Paying Agent or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to
time. Payment of principal and interest to DTC is the responsibility of the
Company or the Paying Agent, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depositary
with respect to the Debt Securities at any time by giving reasonable notice to
the Company or the Paying Agent. Under such circumstances, in the event that a
successor securities depositary is not appointed, Debt Security certificates
are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources (including DTC) that the Company believes
to be reliable, but the Company takes no responsibility for the accuracy
thereof.
Unless stated otherwise in the applicable Prospectus Supplement, the
underwriters or agents with respects to a series of Debt Securities issued as
Global Notes will be Direct Participants in DTC.
None of the Company, any underwriter or agent, the applicable Trustee
or any applicable Paying Agent will have the responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
interests in a Global Note, or for maintaining, supervising or reviewing any
records relating to such beneficial interests.
Conversion or Exchange Rights
The terms and conditions, if any, upon which Subordinated Debt
Securities being offered are convertible or exchangeable into Common Stock will
be set forth in the Prospectus Supplement relating thereto. Such terms will
include the conversion or exchange price, the conversion or exchange period,
provisions as to whether conversion or exchange will be at the option of the
Holder or the Company, the events requiring an adjustment of the conversion or
exchange price and provisions affecting conversions or exchanges in the event
of the redemption of such Subordinated Debt Securities.
Concerning the Trustees
The Company may from time to time maintain deposit accounts and
conduct other banking transactions with The First National Bank of Chicago or
State Street Bank and Trust Company and their affiliated entities in the
ordinary course of business.
Certain Definitions
Set forth below is summary of certain defined terms used in the
applicable Indenture. Reference is made to the applicable Indenture for the full
definition of all such terms.
"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
the applicable Indenture relating to the Debt Securities of such series, except
(i) the right of Holders of Debt Securities of such series to receive, from the
trust fund described under "Discharge, Legal Defeasance and Covenant
Defeasance" above, payment of the principal of (and premium, if any) and
interest on such Debt Securities when such payments are due, (ii) the Company's
obligations with respect to the Debt Securities of such series under the
provisions relating to exchanges, transfers and replacement of Debt Securities,
the maintenance of an office or agency of the Company and the defeasance trust
fund, the provisions relating
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to compensation and reimbursement of the applicable Trustee and (iii) the
rights, powers, trusts, duties and immunities of the applicable Trustee
thereunder. (Section 15.02)
"Indebtedness" means (i) any liability of any Persons (a) for borrowed
money, or (b) evidenced by a bond, note, debenture or similar instrument
(including purchase money obligations but excluding trade payables), or (c) for
the payment of money relating to a lease that is required to be classified as a
capitalized lease obligation in accordance with generally accepted accounting
principles, or (d) preferred or preference stock of a Subsidiary of the Company
held by Persons other than the Company or a Subsidiary of the Company; (ii) any
liability of others described in the preceding clause (i) that the Person has
guaranteed, that is recourse to such Person or that is otherwise its legal
liability; and (iii) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred to in
clauses (i) and (ii) above. (Section 1.01)
"Senior Indebtedness" means the principal of (and premium, if any) and
unpaid interest on (i) Indebtedness of the Company, whether outstanding on the
date of the Subordinated Indenture or thereafter created, incurred, assumed or
guaranteed, for money borrowed (other than the Indebtedness evidenced by the
Subordinated Debt Securities of any series), unless in the instrument creating
or evidencing the same or pursuant to which the same is outstanding it is
provided that such Indebtedness is not senior or prior in right of payment to
the Subordinated Debt Securities or is pari passu or subordinate by its terms
in right of payment to the Subordinated Debt Securities and (ii) renewals,
extensions and modifications of any such Indebtedness. (Section 1.01 of the
Subordinated Indenture)
"Subsidiary" means any Corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such Corporation, irrespective of whether or not
at the time stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency, is at
the time, directly or indirectly, owned or controlled by the Company or by one
or more Subsidiaries thereof, or by the Company and one or more Subsidiaries
thereof. (Section 1.01)
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely 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 a 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 15.02)
PREFERRED STOCK
The description of certain provisions of the Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be complete and is
subject to and qualified in its entirety by reference to the Company's Articles
of Incorporation and the Articles of Amendment relating to each such series of
Preferred Stock, which will be filed with the Commission in connection with the
offering of such series of Preferred Stock.
General
Under the Company's Articles of Incorporation, the Board of Directors
may, by resolution, establish series of Preferred Stock having such voting
powers, and such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as the Board of Directors may determine.
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The Preferred Stock offered hereby will have the dividend, liquidation
and voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of Preferred Stock. Reference is made
to the Prospectus Supplement relating to the particular series of Preferred
Stock offered thereby for specific terms, including:(1) the designation and
stated value per share of such Preferred Stock and the number of shares
offered; (2) the amount of liquidation preference per share; (3) the price at
which such Preferred Stock will be issued; (4) the dividend rate (or method of
calculation), the dates on which dividends will be payable, whether such
dividends will be cumulative or noncumulative and, if cumulative, the dates
from which dividends will commence to cumulate; (5) any redemption or sinking
fund provisions; (6) any terms by which such series of Preferred Stock may be
convertible into or exchanged for Common Stock or Debt Securities; and (7) any
additional or other rights, preferences, privileges, limitations and
restrictions relating to such series of Preferred Stock.
The Preferred Stock offered hereby will be issued in one or more
series. The holders of Preferred Stock will have no preemptive rights. Preferred
Stock will be fully paid and nonassessable upon issuance against full payment
of the purchase price therefor. Unless otherwise specified in the Prospectus
Supplement relating to a particular series of Preferred Stock, each series of
Preferred Stock will, with respect to dividend rights and rights on
liquidation, dissolution and winding up of the Company, rank prior to the
Common Stock (the "Junior Stock") and on a parity with each other series of
Preferred Stock offered hereby (the "Parity Stock").
Dividend Rights
Holders of the Preferred Stock of each series will be entitled to
receive, when, as and if declared by the Board of Directors of the Company, out
of funds legally available therefor, cash dividends at such rates and on such
dates as are set forth in the Prospectus Supplement relating to such series of
Preferred Stock. Such rate may be fixed or variable or both. Each such dividend
will be payable to the holders of record as they appear on the stock books of
the Company on such record dates as will be fixed by the Board of Directors of
the Company. Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the Prospectus Supplement relating thereto. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay the dividend accrued for that period, whether or not
dividends are declared for any future period. Dividends on shares of each series
of Preferred Stock for which dividends are cumulative will accrue from the date
set forth in the applicable Prospectus Supplement.
The Preferred Stock of each series will include customary provisions
(1) restricting the payment of dividends or the making of other distributions
on, or the redemption, purchase or other acquisition of, Junior Stock unless
full dividends, including, in the case of cumulative Preferred Stock, accruals,
if any, in respect of prior dividend periods, on the shares of such series of
Preferred Stock have been paid and (2) providing for the pro rata payment of
dividends on such series and other Parity Stock when dividends have not been
paid in full upon such series and other Parity Stock.
Rights Upon Liquidation
In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the holders of each series of Preferred Stock
will be entitled to receive out of assets of the Company available for
distribution to stockholders, before any distribution of assets is made to
holders of Junior Stock, liquidating distributions in the amount set forth in
the Prospectus Supplement relating to such series of Preferred Stock plus an
amount equal to accrued and unpaid dividends. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the amounts
payable with respect to the PreferredStock of any series and any Parity Stock
are not paid in full, the holders of the Preferred Stock of such series and of
such Parity Stock will share ratably in any such distribution of assets of the
Company in proportion to the full respective preferential amounts (which may
include accumulated dividends) to which they are entitled. After payment of the
full amount of the liquidating distribution to which they are entitled, the
holders of such series of Preferred Stock will have no right or claim to any of
the remaining assets of the Company. Neither the sale of all or a portion
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of the Company's assets nor the merger or consolidation of the Company into or
with any other corporation shall be deemed to be a dissolution, liquidation or
winding up, voluntarily or involuntarily, of the Company.
Voting Rights
The holders of Preferred Stock of a series offered hereby will not be
entitled to vote except as indicated in the Prospectus Supplement relating to
such series of Preferred Stock or as required by applicable law. Unless
otherwise specified in the Prospectus Supplement relating to a particular
series of Preferred Stock, when and if any such series is entitled to vote,
each share in such series will be entitled to one vote.
DESCRIPTION OF CAPITAL STOCK
GENERAL
Set forth below is a description of the material terms and provisions
of the equity securities of the Company. The following description does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Articles of Incorporation, as amended, of the Company (the
"Articles of Incorporation") and the By-Laws, as amended, of the Company (the
"By- Laws") and the Rights Plan of the Company dated as of July 27, 1994
between the Company and Chemical Bank, as Rights Agent (the "Rights Plan"). The
Articles of Incorporation and the By-Laws are exhibits to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993 and the Rights Plan is
an exhibit to Company's Registration Statement on Form 8-A.
The Company is authorized to issue (i) 100,000,000 shares of Common
Stock, par value $2.00 per share and (ii) 20,000,000 shares of Preferred Stock,
par value $2.00 per share, which may be issued in one or more series with such
voting powers, designations, preferences, rights, qualifications, limitations
and restrictions as shall be specified by the Board of Directors. The Board of
Directors may issue preferred stock with voting and conversion rights which
could adversely affect the voting power of the holders of Common Stock, and
which could, among other things, have the effect of delaying, deferring or
preventing a change in control of the Company. In connection with the Rights
Plan, the Board of Directors authorized the issuance of 1,000,000 shares of
Series A Junior Participating Preferred Stock to holders of rights issued under
the Rights Plan. See "--Rights Plan" below.
As of July 14, 1994, 12,435,519 shares of Common Stock were issued and
outstanding, excluding 524,207 treasury shares.
COMMON STOCK
Dividends
Holders of the Company's Common Stock are entitled to receive such
dividends as may be legally declared by the Board of Directors. The declaration
and amount of future dividends may depend, in part, on restrictive covenants
contained in certain loan agreements and certain state regulations regarding
minimum capitalization requirements for insurance companies that have the
effect of limiting dividends from UCLIC and UGTIC to the Company.
Under provisions of the Company's revolving credit facility
restricting the payment of dividends, approximately $37.2 million of retained
earnings was available for the payment of dividends at June 30, 1994. In
addition to the state regulatory provisions referenced above requiring minimum
capitalization for insurance companies and limiting the ability of insurance
companies to pay dividends or make other payments to affiliates, the ability of
UCLIC to pay dividends to the Company is restricted under certain circumstances
by the fact that payment of dividends by UCLIC would result in an increase in
UCLIC's federal income taxes.
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Voting Rights
Holders of Common Stock are entitled to one vote for each share held
of record. Except as discussed below, action of the stockholders may generally
be taken by the affirmative vote of a majority of the shares present or
represented at a duly called meeting at which a quorum is present or
represented.
Other Rights
Holders of Common Stock have no preemptive or subscription rights and
have no liability for further calls or assessments. All shares of Common Stock
are entitled to share ratably in the net assets of the Company upon
liquidation.
The transfer agent and registrar for the Common Stock is Chemical
Bank of New York, New York.
SPECIAL CHARTER AND LOUISIANA LAW PROVISIONS
Certain provisions of the Articles of Incorporation of the Company,
Louisiana law, and the Company's Rights Plan, may have the effect of delaying,
deterring or discouraging, among other things, a non-negotiated tender or
exchange offer for the Company's Common Stock or a proxy contest for control of
the Company.
Special Vote Provisions and Takeover Consideration Provisions
in the Company's Articles of Incorporation
The Articles of Incorporation of the Company include certain
provisions (the "Special Vote Provisions") requiring the affirmative vote of
80% of the outstanding shares of the Company's voting stock before the Company
may enter into (i) a merger or consolidation with any other corporation, (ii) a
sale or lease of substantially all of the assets of the Company to any other
corporation, person or entity, or (iii) a sale or lease to the Company by any
other corporation, person or other entity of assets having a value greater than
$1 million in exchange for voting stock of the Company, in each case if such
other corporation, person or other entity, directly or indirectly, owns or
controls 10% or more of the Company's voting stock prior to any such
transaction. The Special Vote Provisions apply only to the above-described
transactions which do not receive prior approval of the Board of Directors.
The Articles of Incorporation of the Company also contain certain
provisions (the "Takeover Consideration Provisions") authorizing the Board of
Directors, in evaluating an offer from a third party to merge with or acquire
the shares or assets of the Company, to give due consideration to certain
factors not directly related either to the price per share offered for or the
then market price of the Company's Common Stock. The factors that the Board of
Directors is authorized to consider under the Takeover Consideration Provisions
include, without limitation:(i) the consideration being offered in the
acquisition proposal as it relates to the then current value of the Company in
a freely negotiated transaction, and to the Board of Directors' then estimate
of the future value of the Company as an independent entity; (ii) the social,
legal and economic effects of the acquisition proposal on the Company and its
subsidiaries, and the franchisees, employees, suppliers, customers, creditors
and business of the Company and its subsidiaries; (iii) the financial condition
and earnings prospects of the potential offeror, including but not limited to,
debt service and other existing or likely financial obligations of the
potential offeror, and the possible effect of such condition upon the Company
and its subsidiaries and other elements of the communities in which the Company
and its subsidiaries operate or are located; and (iv) the competence,
experience and integrity of the potential offeror.
Pursuant to Section 91G of the Louisiana Business Corporation Law (the
"LBCL"), the Board of Directors is also authorized to consider the factors set
forth therein (which are generally comparable to those set forth in the
Takeover Consideration Provisions) and any other factors which it deems
relevant in evaluating a tender offer or an offer to make a tender or exchange
offer or to effect a merger or consolidation.
The Special Vote Provisions and the Takeover Consideration Provisions
may be altered only by the affirmative vote of 80% of the outstanding shares of
the Company's voting stock.
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Directors' and Officers' Exculpation and Indemnification
The Articles of Incorporation provide that no director or officer of
the Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director or officer except
for liability (i) for breach of the director's or officer's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 92(D) of the LBCL, which specifies certain corporate
transactions, such as certain dividend declarations and dispositions of assets,
as unlawful, or (iv) for any transaction from which the director or officer
derived an improper personal benefit. With the exception of the items noted in
(i) through (iv) above, the effect of this provision of the Articles of
Incorporation is to eliminate the rights of the Company and its stockholders
(through stockholders' derivative suits on behalf of the Company) to recover
monetary damages against a director or officer for breach of his or her
fiduciary duty as a director or officer. This provision does not limit or
eliminate the rights of the Company or any stockholders to seek non-monetary
relief, such as an injunction or rescission in the event of a breach of a
director's or officer's fiduciary duty.
Pursuant to Section 83 of the LBCL, the Company has adopted provisions
in its Articles of Incorporation which require the Company to indemnify its
directors and officers to the fullest extent permitted by Louisiana law.
Louisiana Fair Price and Control Share Acquisition Statutes
As a Louisiana corporation, the Company is subject to the provisions
of the LBCL which contain "fair price" and "control share acquisition"
provisions. Each of these provisions imposes significant restrictions on the
ability of an acquiror of a large block of voting stock of a Louisiana
corporation to exercise control over the corporation.
The "fair price" provisions are set forth in Sections 132-134 of the
LBCL and are designed to restrict the ability of a Louisiana corporation to
enter into mergers or other extraordinary corporate transactions with certain
stockholders. These provisions require that certain business combinations
between a Louisiana corporation and "interested stockholders" must be approved
by (i) the corporation's Board of Directors, (ii) the affirmative vote of at
least 80% of the voting stock of the corporation, and (iii) the affirmative
vote of two-thirds of the voting stock of the corporation (excluding stock held
by the interested stockholders), unless the business combination satisfies
certain "fair price" tests regarding the payments to be made to stockholders
and meets certain other procedural requirements. An "interested stockholder" is
defined as any person (other than the corporation, any subsidiary of the
corporation or any employee benefit plan of the corporation or any subsidiary)
that is the beneficial owner of 10% or more of the voting stock of the
corporation. In general, the "fair price" tests measure the value stockholders
receive for their stock from an interested stockholder in transactions within a
two year period.
The "control share acquisition" provisions of the LBCL are set forth
in Sections 135-140.2. In general, these provisions provide that persons who,
after May 4, 1987, acquire stock that would normally entitle them to exercise
20% or more of the voting power of the corporation will not be able to vote the
shares acquired by them in excess of 20% of such voting power unless their
ability to vote is reinstated by the stockholders of the corporation at a
meeting held after the acquiring person requests such a vote. A corporation is
required to call such a meeting only if the person proposing to make a control
share acquisition (an "acquiring stockholder") has demonstrated a financial
ability to make a successful acquisition and such proposed acquisition is
lawful. At such a meeting, the voting rights of the acquiring stockholder will
be reinstated for shares held by the acquiring stockholder in excess of 20% of
the Company's voting power if approved by the affirmative vote of (i) a
majority of all shares of the Company then entitled to vote and (ii) a majority
of all shares of the Company then entitled to vote (excluding shares
beneficially owned by the acquiring stockholder, its officers and its directors
who are also its employees). If the voting rights of the acquiring stockholder
are reinstated, such stockholder can acquire additional voting shares within
certain threshold levels, without obtaining additional stockholder
approval. However, if the acquiring stockholder acquires additional shares in an
acquisition that places such stockholder above the threshold ownership levels
of one-third and one-half of all voting shares, the additional shares acquired
in such an acquisition in excess of such ownership levels will not have voting
rights unless reinstated by the stockholders pursuant to the voting procedures
described above. A corporation must call a stockholders'
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meeting within 50 days of the date that both the corporation and the proposed
acquiring stockholder file definitive proxy materials with the Commission.
Louisiana Insurance Code
UCLIC is a Louisiana chartered life insurance company. Section 731 of
the Louisiana Insurance Code (La.R.S. 22:731) provides that a Louisiana insurer
may merge or consolidate with or acquire control of another insurer, or a
person may acquire control of a Louisiana insurance company only if the plan of
merger or consolidation or acquisition of control is submitted to or receives
advance approval from the Louisiana Commissioner of Insurance after a public
hearing thereon. Section 731 provides that the Louisiana Commissioner of
Insurance may disapprove any such merger, consolidation or other acquisition of
control for any of the following reasons: (i) the effect thereof would be
substantially to lessen competition in insurance in Louisiana or tend to create
a monopoly therein; (ii) the financial condition of any acquiring party is such
as might jeopardize the financial stability of the insurer, or prejudice the
interests of its policyholders or the interests of any remaining security
holders who are unaffiliated with such acquiring party; (iii) the terms of the
offer, request, invitation, agreement or acquisition are unfair and
unreasonable to the security holders of the insurer; (iv) the plans or
proposals which the acquiring party has to liquidate the insurer, sell its
assets or consolidate or merge it with any person, or to make any other
material change in its business or corporate structure or management are unfair
and unreasonable to policyholders of the insurer and not in the public
interest; or (v) the competence, experience and integrity of those persons who
would control the operation of the insurer are such that it would not be in the
interest of policyholders of the insurer and of the public to permit the
merger, consolidation or other acquisition of control.
Louisiana's Insurance Holding Company System Regulatory Law,
constituting Part XXI-A of the Louisiana Insurance Code (La.R.S. 22:1001-1015),
requires the filing of periodic registration statements by the Company with the
Louisiana Commissioner of Insurance and regulates transactions among members of
an insurance holding company system such as that of the Company. Any change of
control (10% or more of voting securities is presumed to constitute control for
purposes of this legislation) requires notification to hearing before and
approval of the Louisiana Commissioner of Insurance.
RIGHTS PLAN
On July 27, 1994, the Board of Directors of the Company redeemed the
rights issued under the rights plan adopted in February 1989, adopted the
Rights Plan, declared a dividend of one preferred stock purchase right (a
"Right") for each outstanding share of Common Stock on August 6, 1994, and
authorized the issuance of one Right with respect to each share of Common Stock
issued after August 6, 1994, and before the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined). The Rights have antitakeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors, except pursuant to an
offer conditioned on a substantial number of Rights being acquired.
Each Right entitles the registered holder upon exercise on and after
the Distribution Date to purchase from the Company one one-hundredth of a share
of Series A Junior Participating Preferred Stock, par value $2.00 per share
(the "Preferred Shares"), of the Company at a price of $240.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights, and the Preferred Shares
into which such Rights are exercisable, are set forth in the Rights Plan.
The "Distribution Date" occurs on the earliest of the close of
business on (i) the tenth day following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock,
(ii) the tenth day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any person becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer, the consummation of which
would result in the beneficial ownership by a person or group of 25% or more of
the outstanding shares of Common Stock, or (iii) 10 days after the Board of
Directors shall declare any person to be an "Adverse Person," upon a
determination that such person, alone or together with its affiliates and
associates, has become the beneficial owner of 10% or more of the
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outstanding shares of Common Stock and a determination by at least a majority
of the Board of Directors who are not officers of the Company, after reasonable
inquiry and investigation, including consultation with such persons as such
directors shall deem appropriate, that (a) such beneficial ownership by such
person is intended to cause, is reasonably likely to cause or will cause the
Company to repurchase the shares of Common Stock beneficially owned by such
person or to cause pressure on the Company to take action or enter into a
transaction or series of transactions intended to provide such person with
short-term financial gain under circumstances where the Board of Directors
determines that the best long-term interests of the Company and its
stockholders would not be served by taking such action or entering into such
transactions or series of transactions at that time or (b) such beneficial
ownership is causing or is reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive position) on
the business or prospects of the Company. However, the Board of Directors may
not declare a person to be an Adverse Person if, prior to the time that the
person acquired 10% or more of the shares of Common Stock then outstanding,
such person provided to the Board of Directors in writing a statement of the
person's purpose and intentions in connection with the proposed acquisition of
Common Stock, together with any other information reasonably requested of the
person by the Board of Directors, and the Board of Directors, based on such
statement and reasonable inquiry and investigation as it deems appropriate,
determines to notify and notifies such person in writing that it will not
declare the person to be an Adverse Person; provided, however, that the Board
of Directors may expressly condition in any manner a determination not to
declare a person an Adverse Person on such conditions as the Board of Directors
may select, including without limitation, such person not acquiring more than a
specified amount of stock and/or such person not taking actions inconsistent
with the purposes and intentions disclosed by such person in the statement
provided to the Board of Directors. In the event that the Board of Directors
should at any time determine, upon reasonable inquiry and investigation, that
such person has not met or complied with any conditions specified by the Board
of Directors, the Board of Directors may at any time thereafter declare the
person to be an Adverse Person. Until the Distribution Date, the Rights will
be transferred with and only with shares of Common Stock. The Rights will
expire on July 31, 2004 (the "Final Expiration Date"), unless the Rights are
earlier redeemed or exchanged by the Company.
The Purchase Price payable, and the number of Preferred Shares or
other securities of property issuable, on exercise of the Rights are subject to
adjustment from time to time to prevent dilution in the event of a stock
dividend on the Preferred Shares or other events described in the Rights Plan.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per share of Common
Stock. In the event of liquidation, the holders of the Preferred Shares will
be entitled to a minimum preferential liquidation payment of $100.00 per share
but will be entitled to an aggregate payment of 100 times the payment made per
share of Common Stock. Each Preferred Share will have 100 votes, voting
together with the Common Stock. Finally, in the event of merger, consolidation
or other transaction in which shares of Common Stock are exchanged, each
Preferred Share will be entitled to receive 100 times the amount received per
share of Common Stock. The Rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one share of Common Stock.
The Rights Plan contains a "flip-over" feature allowing the exercise
of the Rights so that the holder thereof (except those Rights held by the
Acquiring Person) will receive shares of Common Stock of the Acquiring Person
at half price, causing substantial dilution to the Acquiring Person. In
general, this "flip-over" feature provides that in the event that the Company
is acquired by an Acquiring Person in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold
to an Acquiring Person, proper provision will be made so that each holder of a
Right, other than Rights that are or were beneficially owned by the Acquiring
Person after the date upon which the Acquiring Person became such (which will
thereafter be void), will thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price, that number of shares of
common stock of the Acquiring Person which at the time of such transaction will
have a market value of two times the Purchase Price.
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The Rights Plan also contains a "flip-in" feature allowing holders of
Rights (except those held by an Acquiring Person) to purchase Common Stock of
the Company at half price, causing substantial dilution to the Acquiring
Person. In general, this "flip- in" feature provides that in the event that
(i) any person becomes the beneficial owner of 25% or more of the outstanding
Common Stock (unless such person first acquires 25% or more of the outstanding
Common Stock by a purchase pursuant to a tender offer for all of the Common
Stock which the independent directors determine to be fair to and otherwise in
the best interests of the Company and its stockholders, employees, customers
and communities in which the Company does business), (ii) any person is
declared by the Board of Directors to be an Adverse Person, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Plan, or (iv) during such time as there is an Acquiring Person, there
shall be a reclassification of securities or a recapitalization or
reorganization of the Company or other transaction or series of transactions
involving the Company which has the effect of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its subsidiaries beneficially owned by the Acquiring
Person, proper provision shall be made so that each holder of a Right, other
than Rights that are or were beneficially owned by the Acquiring Person after
the date upon which the Acquiring Person became such (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
shares of Common Stock (or, in the event that there are insufficient authorized
shares of Common Stock, substitute consideration such as cash, property, or
other securities of the Company) having a market value of two times the
Purchase Price.
At any time after the acquisition by an Acquiring Person of beneficial
ownership of 20% or more of the outstanding Common Stock and prior to the
acquisition by such person of 25% or more of the outstanding Common Stock, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by such person which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock, or one one-hundredth of a
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
At any time prior to the tenth day following a public announcement
that an Acquiring Person has acquired beneficial ownership of 20% or more of
the outstanding Common Stock, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"). Immediately upon any redemption of the Rights, the right
to exercise the Rights will terminate and the only right of the holder of the
Rights will be to receive the Redemption Price. The date on which the
redemption of the Rights occurs pursuant to the foregoing provisions is
referred to herein as the "Redemption Date."
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) any percentage greater than the largest percentage of the
outstanding shares of the Common Stock then known to the Company to be
beneficially owned by any Acquiring Person and (ii) 10%, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder of a Right will not, by reason
of being such a holder, have rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
PLAN OF DISTRIBUTION
The Company may offer and sell the Offered Securities in one or more
of the following ways: (i) through underwriters or dealers; (ii) through
agents; or (iii) directly by the Company to one or more purchasers. The
Prospectus Supplement with respect to a particular offering of a series of
Offered Securities will set forth the terms of the offering of such Offered
Securities, including the name or names of any underwriters or agents with whom
UCFC has entered into arrangements with respect to the sale of such Offered
Securities, the public offering or purchase price of such Offered Securities
and the proceeds to the Company from such sales, and any underwriting
discounts, agency fees or commissions and other items constituting
underwriters' compensation, the initial public offering price, any discounts or
concessions to be allowed or reallowed or paid to dealers and any securities
exchange, if any, on which such Offered Securities may be listed.
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Dealer trading may take place in certain of the Offered Securities, including
Offered Securities not listed on any securities exchange.
If underwriters are used in the offer and sale of Offered Securities,
the Offered Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The Offered Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters, or by underwriters without a syndicate, all of which
underwriters in either case will be designated in the applicable Prospectus
Supplement. Unless otherwise set forth in the applicable Prospectus
Supplement, under the terms of the underwriting agreement, the obligations of
the underwriters to purchase Offered Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Offered Securities may be offered and sold directly by the Company or
through agents designated by the Company from time to time. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named in, and any commissions payable by the
Company to such agent will be set forth in or calculable from, the applicable
Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best-efforts basis for the
period of its appointment.
The Offered Securities will be new issues of securities with no
established trading market. Any underwriters to whom Offered Securities are
sold by the Company for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any Offered Securities.
Any underwriter, dealer or agent participating in the distribution of
the Offered Securities may be deemed to be an underwriter, as that term is
defined in the Securities Act, of the Offered Securities so offered and sold,
and any discounts or commissions received by it from UCFC and any profit
realized by it on the sale or resale of the Offered Securities may be deemed to
be underwriting discounts and commissions under the Securities Act.
Under agreements entered into with the Company, underwriters, dealers
and agents may be entitled to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the underwriters or agents may be
required to make in respect thereof.
Underwriters, dealers and agents also may be customers of, engage in
transactions with, or perform other services for the Company in the ordinary
course of business.
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LEGAL OPINIONS
The legality of the Debt Securities will be passed upon for the
Company by Stroock & Stroock & Lavan, New York, New York. The legality of the
Common Stock and Preferred Stock will be passed upon for the Company by
Kantrow, Spaht, Weaver & Blitzer (A Professional Law Corporation), Baton Rouge,
Louisiana. Certain legal matters in connection with any offering of
Securities involving any underwriters or dealers will be passed upon for such
underwriters or dealers by Simpson Thacher & Bartlett (a partnership which
includes professional corporations), New York, New York. As to matters
governed by the laws of the State of Louisiana, Stroock & Stroock & Lavan and
Simpson Thacher & Bartlett will rely upon Kantrow, Spaht, Weaver & Blitzer (A
Professional Law Corporation). As of June 30, 1994, individual stockholders of
the firm of Kantrow, Spaht, Weaver & Blitzer (A Professional Law Corporation)
owned, directly or indirectly, approximately 23,566 shares of the Company's
Common Stock.
EXPERTS
The consolidated financial statements and the related financial
statement schedules incorporated in this Prospectus by reference from UCFC's
Annual Report on Form 10-K for the year ended December 31, 1993 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the
periods ended March 31, 1994 and 1993 and June 30, 1994 and 1993, which is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994 and June
30, 1994 and incorporated by reference herein, they did not audit and they do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte &
Touche LLP are not subject to the liability provisions of Section 11 of the
Securities Act of 1933 for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
registration statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
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================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
________________
TABLE OF CONTENTS
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PAGE
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<S> <C>
PROSPECTUS
Incorporation of Certain Documents by
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Ratios of Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Selected Financial and Other Data . . . . . . . . . . . . . . . . . . . . 11
Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . 31
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . 46
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
================================================================================
$200,000,000
UNITED COMPANIES
FINANCIAL CORPORATION
DEBT SECURITIES AND PREFERRED STOCK
_____________
PROSPECTUS
_____________
, 1994
================================================================================
<PAGE> 56
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses, other than underwriting or broker-dealer fees,
discounts and commissions, in connection with the offering are as follows:
<TABLE>
<S> <C>
Registration Fee -- Securities and
Exchange Commission . . . . . . . $ 68,965.52
Printing and Engraving Expenses . . 175,000.00
Legal Fees and Expenses . . . . . . 350,000.00
Accounting Fees and Expenses . . . . 35,000.00
Blue Sky Fees and Expenses . . . . . 45,000.00
Indenture Trustees' Expenses . . . . 7,000.00
Rating Agency Fees and Expenses . . 100,000.00
Miscellaneous . . . . . . . . . . . 150,000.00
-----------
Total . . . . . . . . . . . . . $930,965.52
===========
</TABLE>
_______________________
All of the amounts are estimated except for the Securities and Exchange
Commission registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 83 of the Louisiana Business Corporation Law (the "LBCL")
provides that a corporation may indemnify any person who was or is a party or
is threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative, or investigative (other than an action by or
in the right of the corporation), by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
another business, foreign or nonprofit corporation, partnership, joint venture,
or other enterprise. The indemnity may include expenses, including attorney
fees, judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. Section 83 further provides that a Louisiana corporation may
indemnify officers and directors in an action by or in the right of the
corporation under the same conditions except that no indemnification is
permitted without judicial approval if the director or officer shall have been
adjudged to be liable for willful or intentional misconduct in the performance
of his duty to the corporation. Where an officer or director is successful on
the merits or otherwise in any defense of any action referred to above or any
claim therein, the corporation must indemnify him against such expenses that
such officer or director actually incurred. Section 83 permits a corporation
to pay expenses incurred by the officer or director in defending an action,
suit or proceeding in advance of the final disposition thereof if approved by
the board of directors.
Pursuant to Section 83 of the LBCL, the Company has adopted provisions
in its Articles of Incorporation which require the Company to indemnify its
directors and officers to the fullest extent permitted by the LBCL.
II-1
<PAGE> 57
The Articles of Incorporation, as amended, provide that no director or
officer of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director or
officer except for liability (i) for breach of the directors' or officers' duty
of loyalty to the Company or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 92(D) of the LBCL, or (iv) for any transaction from
which the director or officer derived an improper personal benefit. Section
92(D) of the LBCL specifies certain corporate transactions, such as certain
dividend declarations and dispositions of assets, as unlawful. The effect of
this provision of the Articles of Incorporation is to eliminate the rights of
the Company and its stockholders (through stockholders' derivative suits on
behalf of the Company) to recover monetary damages against a director or
officer for breach of fiduciary duty as a director or officer. This provision
does not limit or eliminate the rights of the Company or any stockholders to
seek non-monetary relief, such as an injunction or rescission in the event of a
breach of a director's or officer's fiduciary duty.
ITEM 16. LIST OF EXHIBITS.
Exhibit
Number Description of Document
------- -----------------------
1.1(1) Form of Underwriting Agreement for Securities
4.1(3) Series A Junior Participating Preferred Stock Purchase Rights
4.2(1) Form of Senior Indenture
4.3(1) Form of Senior Note (included in Exhibit 4.2)
4.4(1) Form of Subordinated Indenture
4.5(1) Form of Subordinated Note (included in Exhibit 4.4)
4.6(1) Form of Articles of Amendment for Preferred Stock
4.7(1) Specimen Preferred Stock Certificate
5.1(1) Opinion of Stroock & Stroock & Lavan regarding legality of
securities being registered
5.2(1) Opinion of Kantrow, Spaht, Weaver & Blitzer (A Professional Law
Corporation) regarding legality of securities being registered
12.1(1) Statement of Computation of Ratio of Earnings to Fixed Charges
12.2(1) Statement of Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
15.1(1) Letter of Deloitte & Touche LLP regarding unaudited financial
information
23.1(1) Consent of Stroock & Stroock & Lavan (included in Exhibit 5.1)
23.2(1) Consent of Kantrow, Spaht, Weaver & Blitzer (A Professional Law
Corporation) (included in Exhibit 5.2)
23.3(1) Consent of Deloitte & Touche LLP
24.1(2) Powers of Attorney (included in Part II of this Registration
Statement)
II-2
<PAGE> 58
Exhibit
Number Description of Document
------- -----------------------
25.1(1) Statement of Eligibility of Senior Trustee on Form T-1
25.2(1) Statement of Eligibility of Subordinated Trustee on Form T-1
_______________
(1) Filed herewith.
(2) Previously filed.
(3) Incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A, filed on August 5, 1994.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(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 paragraphs (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
II-3
<PAGE> 59
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 of 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 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 Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE> 60
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused Amendment
No. 1 to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Baton Rouge, State of
Louisiana on September 27, 1994.
UNITED COMPANIES FINANCIAL CORPORATION
By: /s/ Sherry E. Anderson
Sherry E. Anderson
Senior Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, Amendment
No. 1 to this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board September 27, 1994
- --------------------------------------------- (Principal Executive Officer)
Harris J. Chustz
* Chief Executive Officer, President and September 27, 1994
- --------------------------------------------- Director (Principal Executive Officer)
J. Terrell Brown
/s/ Dale E. Redman Executive Vice President, Chief Financial September 27, 1994
- --------------------------------------------- Officer and Director
Dale E. Redman (Principal Financial Officer)
* Senior Vice President and Controller September 27, 1994
- --------------------------------------------- (Principal Accounting Officer)
Jesse O. Griffin
* Director September 27, 1994
- ---------------------------------------------
James J. Bailey, III
</TABLE>
<PAGE> 61
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director September 27, 1994
- ---------------------------------------------
Rober 72t H. Barrow
Director
- ---------------------------------------------
Richard A. Campbell
* Director September 27, 1994
- ---------------------------------------------
Rober 72t D. Kilpatrick
* Director September 27, 1994
- ---------------------------------------------
O. Miles Pollard, Jr.
* Director September 27, 1994
- ---------------------------------------------
Charles S. Prosser, M.D.
* Director September 27, 1994
- ---------------------------------------------
William H. Wright, Jr.
* By /s/ DALE E. REDMAN
-----------------------------------------
Dale E. Redman
Attorney-in-fact
</TABLE>
<PAGE> 62
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document Page Number
------- ----------------------- -----------
<S> <C> <C>
1.1(1) Form of Underwriting Agreement for Securities
4.1(3) Series A Junior Participating Preferred Stock Purchase Rights
4.2(1) Form of Senior Indenture
4.3(1) Form of Senior Note (included in Exhibit 4.2)
4.4(1) Form of Subordinated Indenture
4.5(1) Form of Subordinated Note (included in Exhibit 4.4)
4.6(1) Form of Articles of Amendment for Preferred Stock
4.7(1) Specimen Preferred Stock Certificate
5.1(1) Opinion of Stroock & Stroock & Lavan regarding legality of
securities being registered
5.2(1) Opinion of Kantrow, Spaht, Weaver & Blitzer (A Professional Law
Corporation) regarding legality of securities being registered
12.1(1) Statement of Computation of Ratio of Earnings to Fixed Charges
12.2(1) Statement of Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
15.1(1) Letter of Deloitte & Touche LLP regarding unaudited financial
information
23.1(1) Consent of Stroock & Stroock & Lavan (included in Exhibit 5.1)
23.2(1) Consent of Kantrow, Spaht, Weaver & Blitzer (A Professional Law
Corporation) (included in Exhibit 5.2)
23.3(1) Consent of Deloitte & Touche LLP
24.1(2) Powers of Attorney (included in Part II of this Registration
Statement)
25.1(1) Statement of Eligibility of Senior Trustee on Form T-1
25.2(1) Statement of Eligibility of Subordinated Trustee on Form T-1
</TABLE>
_______________
(1) Filed herewith.
(2) Previously filed.
(3) Incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A, filed on August 5, 1994.
<PAGE> 1
EXHIBIT 1.1
UNITED COMPANIES FINANCIAL CORPORATION
(a Louisiana corporation)
Securities
UNDERWRITING AGREEMENT - BASIC PROVISIONS
September __, 1994
To: The Underwriters named
in the within mentioned
Terms Agreement
Dear Sirs:
United Companies Financial Corporation, a Louisiana
corporation (the "Company"), proposes to issue and sell from time to time its
senior debt securities, subordinated debt securities, convertible subordinated
debt securities (collectively, the "Debt Securities") and its preferred stock,
par value $2.00 per share (the "Preferred Stock"; together with the Debt
Securities, (the "Registered Securities") in one or more offerings on terms
determined at the time of sale. If specified in a Terms Agreement (as defined
below), the Company proposes to grant to the underwriters an option to purchase
up to that amount of Registered Securities specified in such Terms Agreement
(herein called the "Option Securities"). The Debt Securities will be issued
under either an indenture dated as of September __, 1994, (the "Senior
Indenture"), between the Company and The First National Bank of Chicago, as
Trustee, or an indenture dated as of September __, 1994, between the Company
and State Street Bank and Trust Company, as Trustee, (the "Subordinated
Indenture", and together with the Senior Indenture, the "Indentures"). Each
issue of Debt Securities may vary as to aggregate principal amount, maturity
date or dates, interest rate or rates and timing of payments thereof,
redemption provisions, conversion or exchange provisions and sinking fund
requirements, if any, covenants and any other variable terms which the
Indentures contemplate may be set forth in a supplemental indenture to the
Senior Indenture or Subordinated Indenture, as the case may be, (each, a
"Supplemental Indenture"). The Preferred Stock will be issued in one or more
series, which series may vary as to voting rights, dividends, optional and
mandatory redemption provisions, liquidation preference and conversion or
exchange provisions, if any, and any other terms, with all such terms for any
particular series or issue of the Preferred Stock being determined at the time
of issue. The Registered Securities (together with the Option Securities and
any Debt Securities or shares of common stock, par value $2.00 per share, of
the Company (the "Common Stock") issuable upon conversion or exchange of
Registered Securities (the "Underlying Securities")) involved in any such
offering are hereinafter referred to as the "Securities."
<PAGE> 2
2
Whenever the Company determines to make an offering of
Securities, it will enter into an agreement substantially in the form of
Exhibit A(I) or Exhibit A(II) hereto (the "Terms Agreement") providing for the
sale of such Securities (the "Offered Securities") to, and the purchase and
offering thereof by, the underwriter or underwriters named therein (the
"Underwriter" or "you", which terms shall include the underwriter or
underwriters named therein whether acting alone in the sale of such Offered
Securities or as members of an underwriting syndicate). The Terms Agreement
relating to each offering of Securities may take the form of an exchange of any
standard form of written telecommunication and shall specify the principal
amount of Debt Securities or number of shares of Preferred Stock to be issued
and their terms, the name or names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof) and the
principal amount of Debt Securities or number of shares of Preferred Stock
which each severally agrees to purchase, the name or names of the Underwriters
acting as manager or co-managers in connection with such offerings, if any (the
"Representatives", which term shall include each Underwriter in the event that
there shall be no manager or co-manager), the price at which the Securities are
to be purchased by the Underwriters from the Company, the initial public
offering price, any delayed delivery arrangements, the time and place of
delivery and payment and such other applicable information as is indicated in
Exhibit A(I) or Exhibit A(II) hereto as agreed upon by the Company and the
Underwriters. This Agreement, the applicable Terms Agreement, the Indentures
and the applicable related Supplemental Indenture, if any, are hereinafter
referred to collectively as the "Operative Documents."
Each offering of the Securities will be governed by this
Agreement, as supplemented by the applicable Terms Agreement and this Agreement
and such Terms Agreement shall inure to the benefit of and be binding upon each
Underwriter participating in the offering of such Offered Securities.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(File No. 33-55227), including a prospectus, relating to the Securities and the
offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act") and has filed such
pre-effective amendments thereto as may have been required to the date hereof.
Such registration statement, as so amended, has been declared effective by the
Commission, and the Indentures, if applicable, have been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration
statement, as amended to the date such registration statement has been declared
effective, including any documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act which were filed under the Securities
Exchange Act of 1934, as amended (the "1934 Act") on or before the effective
date of the registration statement, is hereinafter
<PAGE> 3
3
called the "Registration Statement, " and such prospectus, as such prospectus
is supplemented on or after the date of the applicable Terms Agreement and
prior to the related Closing Time, by any prospectus supplement relating to the
Offered Securities, including by any such prospectus supplement in the form
first filed or to be filed on or after the date of the related Terms Agreement
pursuant to Rule 424(b) under the 1933 Act, including any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act which were filed under the 1934 Act on or before the date of such
prospectus supplement (any such prospectus supplement, including such
incorporated documents, in the form first filed on or after the date of the
related Terms Agreement pursuant to Rule 424(b) is hereinafter called the
"Prospectus Supplement"), is hereinafter called the "Prospectus". All
references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and
other information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements, if any, to the
Registration Statement, the Prospectus or a Prospectus Supplement (and all
other references of like import) shall be deemed to mean and include the filing
of any document under the 1934 Act after the effective date of the Registration
Statement or the issue date of the Prospectus or Prospectus Supplement, as the
case may be, and prior to the related Closing Time which is deemed to be
incorporated therein pursuant to Item 12 of Form S-3 under the 1933 Act.
Capitalized terms used herein and not otherwise defined are
used herein as defined in the applicable Indenture, if any, (or, during the
period of time following the date of this Agreement and prior to the applicable
Closing Time (as defined in Section 2(b) hereof), as defined in the form of
applicable Indenture, if any, last filed by the Company with the Commission).
Section 1. Representations and Warranties. (a) The Company
represents and warrants at and as of the date hereof, as of the date of the
applicable Terms Agreement and as of the Closing Time (as hereinafter defined)
(in each case, the "Representation Date") as follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act. The Registration Statement, at the time it became
effective, and the prospectus contained therein, and any amendments
thereof and supplements thereto filed prior to the related Closing
Time, conformed in all material respects to the requirements of the
1933 Act and the rules and regulations of the Commission thereunder;
on the date of the related Terms Agreement and as of the related
Closing Time, the Registration Statement and the Prospectus relating
to the Offered Securities, and any
<PAGE> 4
4
amendments thereof and supplements thereto, will conform in all
material respects to the requirements of the 1933 Act and the rules
and regulations of the Commission thereunder; the Registration
Statement, at the time it became effective (or, if an amendment to the
Registration Statement or an annual report on Form 10-K has been filed
by the Company with the Commission subsequent to the effectiveness of
the Registration Statement, then at the time such amendment became
effective or as of the most recent such filing, as the case may be),
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus, on the
date of any filing pursuant to Rule 424(b) and the Prospectus (as
supplemented) as of the related Closing Time, will not include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any of you
expressly for use in the Registration Statement or Prospectus or to
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification under the 1939 Act (Form
T-1) of either Trustee under the Indentures, if any.
(ii) The documents incorporated by reference in the
Registration Statement and Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act, and the
rules and regulations of the Commission thereunder.
(iii) Deloitte & Touche LLP or such other nationally
recognized independent public accountants who are reporting upon the
audited financial statements and schedules included or incorporated by
reference in the Registration Statement are independent public
accountants as required by the 1933 Act.
(iv) This Agreement and the applicable Terms Agreement have
been duly authorized, executed and delivered by the Company.
(v) (A) The consolidated financial statements and the
related notes of the Company included or incorporated by reference in
the (i) Registration Statement, including the prospectus contained
therein, at the time the Registration Statement became effective and
(ii) the Prospectus relating to the Offered Securities as of the issue
date of the related Prospectus Supplement and the Prospectus (as
supplemented) as of the Closing Time for the related Offered
<PAGE> 5
5
Securities, present or will present, as the case may be, fairly, in
all material respects, the consolidated financial position of the
Company and its consolidated subsidiaries, considered as one
enterprise, as of the respective dates indicated and the consolidated
results of operations and cash flows and stockholders' equity and the
other information purported to be shown therein of the Company and its
consolidated subsidiaries, considered as one enterprise, for the
respective periods specified; (B) such financial statements and
related notes have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved (unless otherwise disclosed in a note); and (C) the
financial statement schedules incorporated by reference in the
Registration Statement present fairly, in all material respects, the
information required to be stated therein.
(vi) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Louisiana, has corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing are not
reasonably likely to, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
properties, assets, business or results of operations of the Company
and its subsidiaries, considered as one enterprise.
(vii) Each subsidiary of the Company has been duly
incorporated, and other than Foster Mortgage Corporation ("FMC"), is
validly existing as a corporation in good standing under the law of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing are not reasonably likely to,
individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), properties, assets, business
or results of operations of the Company and its subsidiaries,
considered as one enterprise.
(viii) Except as otherwise disclosed in the Prospectus and
other than the senior preferred stock of FMC, all of the issued and
outstanding capital stock of each subsidiary of the Company has been
duly authorized, is validly issued, fully paid and non-assessable and
is owned by the Company, directly or through one or more subsidiaries
of the Company,
<PAGE> 6
6
free and clear of any lien, mortgage, pledge, encumbrance, claim or
equity other than the pledge by the Company of all the issued and
outstanding capital stock of United Companies Lending Corporation
("UCLC") and United Companies Life Insurance Company ("UCLIC") in
favor of Chemical Bank, for itself and as agent, pursuant to the $200
million credit agreement dated as of October 11, 1988, as amended,
among the Company, the banks parties thereto and Chemical Bank as
agent for each of the banks and for itself (the "Credit Agreement"),
which pledge will be released at or prior to the Closing Time.
(ix) The Company has all of the requisite corporate power
and authority to execute, issue and deliver the Securities and to
incur and perform its obligations provided for therein; as of the date
of applicable Terms Agreement, the Debt Securities, if any, will have
been duly authorized by the Company and, when executed, issued and
authenticated in the manner provided for in the applicable Indenture
and related Supplemental Indenture, if any, and delivered as provided
for in this Agreement and the applicable Terms Agreement, will have
been duly executed, issued and delivered by the Company and will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the applicable Indenture and enforceable
against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing; as of
the date of the applicable Terms Agreement, if any Securities to be
issued are convertible or exchangeable, the Underlying Securities
issuable upon conversion or exchange will be duly and validly
authorized, will have been duly reserved for issuance upon conversion
or exchange of the Securities, and when issued upon the conversion or
exchange of the Securities, will be duly and validly issued and, in
the case of Underlying Securities which are Common Stock, fully paid
and non-assessable; and the Securities conform in all material
respects to the description thereof contained in the Prospectus (as
supplemented).
(x) The Company has all of the requisite corporate power
and authority to execute and deliver the Indentures, if any, and to
perform its obligations provided for therein; as of the date of the
applicable Terms Agreement and as of the Closing Time for the related
Offered Securities, the Company will have all requisite corporate
power and authority to execute and deliver the related Supplemental
Indenture and to perform its obligations provided for therein; the
Indentures, if any, have been duly authorized by the Company, will be
substantially in the forms heretofore delivered to you and, when
executed and delivered
<PAGE> 7
7
by the Company and assuming due execution and delivery by the
Trustees, will constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing; and the Indentures conform in all material respects
to the descriptions thereof contained in the Prospectus (as
supplemented) as of the date of the applicable Terms Agreement, and as
of the Closing Time for the related Offered Securities, the related
Supplemental Indenture, if any, will have been duly authorized by the
Company and will constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
(xi) All of the outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid
and non-assessable.
(xii) Except as disclosed in the Prospectus (as
supplemented), there are no holders of securities (debt or equity) of
the Company, or holders of rights (including preemptive rights),
warrants or options to obtain securities of the Company, who have the
right to request the Company to register securities held by them under
the 1933 Act.
(xiii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby or in any amendment
thereof or supplement thereto, there has not been (A) any material
adverse change in the condition (financial or otherwise), properties,
assets, business or results of operations of the Company and its
subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business, (B) any transaction entered into by
the Company or any of its subsidiaries, other than in the ordinary
course of business, that is reasonably likely to have a material
adverse effect on the condition (financial or otherwise), properties,
assets, business or results of operations of the Company and its
subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock, other than regular quarterly dividends.
<PAGE> 8
8
(xiv) Neither the Company nor any of its subsidiaries is (A)
in violation of its or any of their articles or certificates of
incorporation or by-laws or, other than FMC, in default (nor has an
event occurred that with notice or passage of time or both would
constitute such a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or its subsidiaries is subject or by which any of them or any
of their properties may be bound or affected, (B) other than FMC, in
violation of any existing applicable law, ordinance, regulation,
judgment, order or decree of any government, governmental
instrumentality, arbitrator or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or (C) other than FMC, in each case to the knowledge
of the Company, in violation of or has violated any permit,
certificate, license, order or other approval or authorization
required in connection with the operation of its business that, with
respect to clause (A), (B) or (C) of this sentence, are not reasonably
likely to (individually or in the aggregate) (1) adversely affect the
legality, validity or enforceability of this Agreement, the applicable
Terms Agreement, or the applicable Indenture and related Supplemental
Indenture, if any, (2) have a material adverse effect on the condition
(financial or otherwise), properties, assets, business or results of
operations of the Company and its subsidiaries, considered as one
enterprise, or (3) impair the ability of the Company to fully perform
on a timely basis any obligations that it has under this Agreement,
the applicable Terms Agreement, the applicable Indenture or the
related Supplemental Indenture, if any.
(xv) The issuance, sale and delivery of the Offered
Securities, the execution, delivery and performance of the other
Operative Documents, the compliance by the Company with the terms
therein and the consummation by the Company of the transactions
contemplated thereby and in the Registration Statement do not and will
not result in a violation of any of the terms or provisions of the
articles or certificates of incorporation or by-laws of the Company or
any of its subsidiaries, and do not and will not conflict with, or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, (A) any indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which any of them or any of their properties or assets is bound,
except for such conflicts, breaches, violations or defaults that are
not reasonably likely to have a material adverse effect on the
condition (financial or otherwise), properties, assets, business or
results of operations of the Company and its subsidiaries, considered
as one enterprise, or (B) any existing applicable law, rule,
regulation,
<PAGE> 9
9
judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their
properties.
(xvi) No authorization, approval, consent or order of, or
qualification with, any governmental body or agency is required to be
obtained or made by the Company for (A) the due authorization,
execution, delivery and performance by the Company of each of the
Operative Documents to which it is or will be a party or (B) the valid
authorization, issuance, sale and delivery of the Offered Securities,
except such as may be required by the securities or blue sky laws of
the various states in connection with the offer and sale of the
Securities.
(xvii) There is no action, suit, investigation or proceeding
before or by any government, governmental instrumentality or court,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries
or any of their properties that (A) is required to be disclosed in the
Prospectus and is not so disclosed in the Prospectus (as
supplemented), (B) except as disclosed in the Prospectus (as
supplemented), is reasonably likely to result in any material adverse
change in the condition (financial or otherwise), properties, assets,
business or results of operations of the Company and its subsidiaries,
considered as one enterprise, (C) seeks to restrain, enjoin, prevent
the consummation of or otherwise challenge the issuance and sale of
the Securities or the execution and delivery of this Agreement, the
applicable Terms Agreement or the applicable Indenture or related
Supplemental Indenture, if any, or any of the transactions
contemplated hereby or thereby or (D) questions the legality or
validity of any such transaction or seeks to recover damages or obtain
other relief in connection with any such transaction, and, in each
case to the knowledge of the Company, there is no valid basis for any
such action, suit, investigation or proceeding except as otherwise
disclosed in the Prospectus (as supplemented).
(xviii) There are no statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(xix) Each of the Company and its subsidiaries other than FMC
has all necessary consents, authorizations, approvals, orders,
licenses, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described
<PAGE> 10
10
in the Prospectus (as supplemented), except to the extent that the
failure to so obtain or file is not reasonably likely to have a
material adverse effect on the Company and its subsidiaries,
considered as one enterprise, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such consent, authorization,
approval, order, license, certificate or permit which singly or in the
aggregate, if the subject of any unfavorable decision, ruling or
finding, are reasonably likely to result in any material adverse
change in the condition (financial or otherwise), properties, assets,
business or results of operations of the Company and its subsidiaries,
considered as one enterprise.
(xx) Each of the Company and its subsidiaries owns or
possesses, or can acquire on reasonable terms, adequate patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other proprietary or confidential information,
systems or procedures, whether patented or unpatented), trademarks,
service marks and trade names (collectively, "intellectual property")
presently employed by them in connection with the business now
operated by them, except where the failure to own or possess or have
the ability to acquire any such intellectual property is not
reasonably likely to have a material adverse effect on the condition
(financial or otherwise), properties, assets, business or results of
operations of the Company and its subsidiaries, considered as one
enterprise, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing that,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, is reasonably likely to result in any
material adverse change in the condition (financial or otherwise),
properties, assets, business or results of operations of the Company
and its subsidiaries, considered as one enterprise.
(xxi) The Company has not taken and will not take, directly
or indirectly, any action designed to or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Securities.
(xxii) The Company is not an investment company within the
meaning of the Investment Company Act of 1940, as amended.
(b) Any certificate signed by any officer of either the
Company or any of its subsidiaries and delivered to you or to your counsel at
the Closing Time pursuant to this Agreement or the applicable Terms Agreement
or the transactions contemplated hereby or thereby shall be deemed a
representation and warranty by the Company or such subsidiary of the Company,
as the case may be, to each of you as to the matters covered thereby.
<PAGE> 11
11
Section 2. Sale and Delivery to the Underwriters: Closing.
(a) Your several commitments to purchase Securities pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties herein contained, and shall be subject to the terms and
conditions herein set forth.
(b) Payment of the purchase price for, and delivery of, any
Securities to be purchased by you shall be made at the place set forth in the
applicable Terms Agreement or at such other place as shall be agreed upon by
the Company and you, on the fifth full business day (unless postponed pursuant
to Section 10) following the date of the applicable Terms Agreement or at such
other time not more than ten full business days thereafter as you and the
Company shall determine (such date and time of payment and delivery being
herein called the "Closing Time"). Payment shall be made to the Company by
wire transfer payable in same-day federal funds, less one day's interest at the
federal funds rate, to an account specified by the Company in the applicable
Terms Agreement or by certified or official bank check or checks in New York
Clearing House funds payable to the order of the Company, as specified in the
applicable Terms Agreement, against delivery of the Securities to the
Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them.
(c) The Debt Securities shall be in such denominations
($1,000 or an integral multiple thereof) and registered in such names as the
Representatives may request in writing at least two full business days prior to
the Closing Time. The Debt Securities, which may be in temporary form, and the
shares of Preferred Stock will be made available in New York City for
examination and packaging by the Representatives not later than 10:00 A.M., New
York City time, on the business day prior to the Closing Time.
If specified in a Terms Agreement, on the basis of the
representations, warranties and covenants herein contained, and subject to the
terms and conditions herein set forth, the Company grants an option to you to
purchase, severally and not jointly, up to that amount of the Option
Securities, as shall be specified in the Terms Agreement, from the Company at
the same price as you shall pay for the relevant Securities. Said option may
be exercised only to cover over-allotments in the sale of the Securities by you
and may be exercised in whole or in part at any time (not more than once) on or
before the thirtieth day after the date of the Terms Agreement upon written or
telegraphic notice by you to the Company setting forth the amount of the Option
Securities as to which you are exercising the option. The amount of Option
Securities to be purchased by each Underwriter shall be the same percentage of
the total amount of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Securities, as adjusted
by you in such manner as you deem advisable to avoid fractional shares/units.
<PAGE> 12
12
If authorized by the applicable Terms Agreement, the
Underwriters named therein may solicit offers to purchase Debt Securities from
the Company pursuant to delayed delivery contracts ("Delayed Delivery
Contracts") substantially in the form of Exhibit B hereto, with such changes
therein as the Company may approve. As compensation for arranging Delayed
Delivery Contracts, the Company will pay to the Representatives at Closing Time
a fee equal to that percentage of the principal amount of Debt Securities for
which Delayed Delivery Contracts are made at Closing Time as is specified in
the applicable Terms Agreement. Any Delayed Delivery Contracts are to be with
institutional investors of the types which will be set forth in the applicable
Prospectus Supplement. At Closing Time the Company will enter into Delayed
Delivery Contracts (for not less than the minimum principal amount of Debt
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by you and previously approved by the
Company as provided below, but not for an aggregate principal amount of Debt
Securities in excess of that specified in the applicable Terms Agreement. You
will not have any responsibility for the validity or performance of Delayed
Delivery Contracts.
The Representatives will submit to the Company, at least three
business days prior to Closing Time, the names of any institutional investors
with which it is proposed that the Company will enter into Delayed Delivery
Contracts and the principal amount of Debt Securities to be purchased by each
of them and the Company will advise the Representatives, at least two business
days prior to Closing Time, of the names of the institutions with which the
making of Delayed Delivery Contracts is approved by the Company and the
principal amount of Debt Securities to be covered by each such Delayed Delivery
Contract.
The principal amount of Debt Securities agreed to be purchased
by the respective Underwriters pursuant to the applicable Terms Agreement shall
be reduced by the principal amount of Debt Securities covered by Delayed
Delivery Contracts, as to each Underwriter as set forth in a written notice
delivered by the Representatives to the Company; provided, however, that the
total principal amount of Debt Securities to be purchased by all Underwriters
shall be the total amount of Debt Securities covered by the applicable Terms
Agreement, less the principal amount of Debt Securities covered by Delayed
Delivery Contracts.
Section 3. Certain Covenants of the Company. The Company
covenants with each of you as follows:
(a) Immediately following the execution of each Terms
Agreement, the Company will prepare a Prospectus Supplement setting
forth the principal amount of Debt Securities or the number of shares
of Preferred Stock covered thereby and their terms not otherwise
specified in the applicable Indenture, if any, the names of the
Underwriters and the principal amount of Debt Securities or the number
of shares of Preferred Stock which each of them severally has agreed
<PAGE> 13
13
to purchase, the price at which the Offered Securities are to be
purchased by you from the Company, the initial public offering price,
the selling concession and reallowance, if any, any delayed delivery
arrangements, and such other information as the Representatives and
the Company deem appropriate in connection with the offering of the
Securities. The Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule
424 under the 1933 Act and will furnish to each of you as many copies
of the Prospectus and such Prospectus Supplement as the
Representatives shall reasonably request.
(b) The Company has furnished or will furnish to you, without
charge, as many signed and conformed copies of the Registration
Statement and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents
incorporated by reference in the Prospectus) and signed copies of all
consents and certificates of experts and, during the period mentioned
in paragraph (f) below, as many copies of the Prospectus and any
supplements and amendments thereto, in each case as soon as available,
as you may reasonably request.
(c) From the date of a Terms Agreement, and for so long as a
Prospectus is required to be delivered in connection with the sale of
Offered Securities covered by such Terms Agreement, the Company will
give you notice of its intention to file any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the 1934 Act, the 1933 Act or
otherwise, and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed a reasonable time
in advance of filing and will not file any such amendment or
supplement or use any such prospectus to which you or your counsel
reasonably shall object.
(d) From the date of a Terms Agreement, and for so long as a
Prospectus is required to be delivered in connection with the sale of
Offered Securities covered by such Terms Agreement, the Company will
notify you immediately, and confirm the notice in writing, (i) of the
effectiveness of any amendment to the Registration Statement, (ii) of
the mailing or the delivery to the Commission for filing of any
supplement to the Prospectus or any document to be filed pursuant to
the 1934 Act which will be incorporated by reference into the
Registration Statement or Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration
Statement, the Prospectus or any Prospectus Supplement, (iv) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the
<PAGE> 14
14
initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(e) Between the date of any Terms Agreement and termination
of any trading restrictions specified in the applicable Terms
Agreement, if any, or Closing Time, whichever is later, with respect
to (i) the Debt Securities covered thereby, the Company will not,
without your prior consent or as otherwise permitted by the Terms
Agreement, offer or sell, or enter into any agreement to sell, any
debt securities of the Company with a maturity of more than one year,
including additional Debt Securities, (ii) the Preferred Stock covered
thereby, the Company will not, without your prior consent or as
otherwise permitted by the Terms Agreement, offer or sell, or enter
into any agreement to sell, any shares of its preferred stock or any
securities convertible into or exchangeable or exercisable for or any
right to purchase or acquire preferred stock and (iii) the Underlying
Securities covered thereby, the Company will not, without your prior
consent or as otherwise permitted by the Terms Agreement, offer or
sell, or enter into any agreement to sell, any securities of the same
class as the Underlying Securities or any securities convertible into
or exercisable or exchangeable for or any right to purchase or acquire
Underlying Securities or securities of such class.
(f) The Company will comply to the best of its ability with
the 1933 Act, the 1934 Act and the 1939 Act and the regulations
thereunder so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement, the applicable Terms
Agreement and in the Prospectus. If at any time when, in the opinion
of your counsel, the Prospectus is required by law to be delivered in
connection with sales of the Offered Securities by you or by a dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, the Company shall
forthwith prepare and furnish, at the Company's expense, to each of
you and to the dealers (whose names and addresses you will furnish to
the Company) to which Offered Securities may have been sold by you and
to any other dealers upon request, either amendments or supplements to
the Prospectus so that the statements in the Prospectus as so amended
or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus as so amended or supplemented will comply with the law.
<PAGE> 15
15
(g) The Company will endeavor to qualify the Securities for
offer and sale under the securities or blue sky laws of such
jurisdictions as you shall reasonably request and to maintain such
qualifications in effect for as long as may be required for the
distribution of the Securities; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company
will file such statements and reports as may be required by the laws
of each jurisdiction in which the Securities have been qualified as
above provided.
(h) With respect to each sale of Offered Securities, the
Company will make generally available to its security holders as soon
as practicable but in any event not later than 90 days after the close
of the period covered thereby a consolidated earning statement for a
twelve-month period beginning after the effective date (as defined in
Rule 158(c) under the 1933 Act) of the Registration Statement relating
to such Securities, but not later than the first day of the Company's
fiscal quarter next following such effective date and that otherwise
satisfies the provisions of Section 11(a) of the 1933 Act and the
regulations thereunder.
(i) The Company will use the proceeds received from the sale
of the Offered Securities in the manner specified in the Prospectus
under the heading "Use of Proceeds."
(j) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file promptly all
documents required to be filed with the Commission pursuant to Section
13 or 14 of the 1934 Act within the time periods required under the
1934 Act.
(k) For a period of five years after the applicable Closing
Time, the Company will furnish to each of you copies of all annual
reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Company to the holders of
the Securities or to security holders of its respective publicly
issued securities generally.
Section 4. Payment of Expenses. The Company will pay and
bear all costs and expenses incident to the performance of its obligations
under this Agreement and each related Terms Agreement, including (a) the
preparation, printing and filing of the Registration Statement (including
financial statements and schedules and exhibits), as originally filed and as
amended and
<PAGE> 16
16
the Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereto to you, (b) the preparation, printing and
distribution of this Agreement (including each related Terms Agreement), the
Offered Securities, any related Indentures, a survey of state securities or
blue sky laws (the "Blue Sky Survey"), (c) the delivery of the Offered
Securities to you, (d) the fees and disbursements of the Company's counsel and
accountants, (e) the qualification of the Offered Securities under the
applicable securities laws in accordance with Section 3(g) and any filing for
review of the offering with the National Association of Securities Dealers,
Inc., if any, including filing fees and fees and disbursements of your counsel
in connection therewith and in connection with the Blue Sky Survey and any
legal investment survey, (f) any fees charged by rating agencies for rating the
Offered Securities, (g) the fees and expenses of any Trustees, including the
fees and disbursements of counsel for any Trustees, in connection with the
related Indentures and the Debt Securities, (h) any transfer agent's fees and
(i) the listing, if any, of the Securities on any securities exchange. Subject
to the provisions of the following paragraph, you agree to pay, whether or not
the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of your
obligations under this Agreement and the applicable Terms Agreement not payable
by the Company pursuant to the preceding sentence, including without limitation
the fees and disbursements of your counsel.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or 9(a)(i), the Company shall reimburse each of you up
to an aggregate amount to be set forth in the related Terms Agreement for all
of your out-of-pocket expenses, including the reasonable fees and disbursements
of your counsel, upon receipt of itemized statements therefor.
Section 5. Conditions of Underwriters' Obligations. The
obligations of each of you to purchase and pay for the Offered Securities
pursuant to any related Terms Agreement are subject to the accuracy of the
representations and warranties of the Company contained herein (including those
contained in the applicable Terms Agreement) or in certificates of any officer
of the Company delivered pursuant to the provisions hereof, to the performance
by the Company of its covenants and other obligations hereunder and to the
following further conditions:
(a) At the applicable Closing Time, (i) no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act and no proceedings for that purpose
shall have been instituted and shall be pending or, to your knowledge
or the knowledge of the Company, shall be contemplated by the
Commission, and any request on the part of the Commission for
additional information shall have been complied with to the
satisfaction of your counsel.
<PAGE> 17
17
(b) At the applicable Closing Time, each of you shall
have received a signed opinion of Stroock & Stroock & Lavan, or such
other outside counsel of recognized standing reasonably acceptable to
the Underwriters that may opine on matters of New York law and federal
securities law, counsel for the Company, dated as of the applicable
Closing Time, in form and substance satisfactory to your counsel, to
the effect that:
(i) The Indentures and the related Supplemental
Indenture(s), if any, described in the applicable Terms
Agreement are the legally valid and binding agreements of the
Company, enforceable against the Company in accordance with
their terms except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing;
(ii) The Debt Securities, if any, covered by the
applicable Terms Agreement are in the form contemplated by the
applicable Indenture and the related Supplemental
Indenture(s), and, when executed and authenticated in
accordance with the terms of the applicable Indenture and
delivered to and paid for by you in accordance with the terms
of this Agreement as supplemented by the applicable Terms
Agreement, will be legally valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms except as enforcement thereof may be limited
by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing;
(iii) The Indentures, if any, have been duly
qualified under the 1939 Act;
(iv) The Company is not an investment company
within the meaning of the Investment Company Act of 1940, as
amended;
(v) The statements set forth in the Prospectus
under the caption "Description of Securities," insofar as they
constitute summaries of documents, are accurate in all
material respects and the Indentures, if any, and the Offered
Securities covered by the applicable Terms Agreement conform
in all material respects to the descriptions thereof in the
Prospectus;
<PAGE> 18
18
(vi) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no
proceedings therefor have been initiated or threatened by the
Commission; and any required filing of the Prospectus pursuant
to Rule 424(b) under the 1933 Act has been made in accordance
with Rule 424(b) under the 1933 Act; and
(vii) The Registration Statement (excluding the
documents incorporated therein by reference) and the
Prospectus comply as to form in all material respects with the
requirements for registration statements on Form S-3 under the
1933 Act; it being understood, however, that such counsel
expresses no opinion with respect to the financial statements,
schedules and other financial and statistical data included or
incorporated in the Registration Statement or the Prospectus
or with respect to the Statement as to the Eligibility and
Qualification of the Trustee on Form T-1, if any. In passing
upon the compliance as to form of the Registration Statement
and the Prospectus, such counsel has assumed that the
statements made therein are correct and complete.
In addition, such counsel has participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants for the Company, and the
Representatives, at which the contents of the Registration Statement
and the Prospectus and related matters were discussed and, although
such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus
and have not been called on to make and have not made any independent
check or verification thereof, during the course of such participation
(relying as to materiality to a large extent upon the statements of
officers and other representatives of the Company), no facts came to
such counsel's attention that caused such counsel to believe that the
Registration Statement, at the time it became effective, or if an
amendment to the Registration Statement or an annual report on Form
10-K has been filed by the Company with the Commission subsequent to
the effectiveness of the Registration Statement, then at the time such
post-effective amendment became effective or as of the most recent
filing, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus
(including the documents incorporated by reference therein but giving
effect to Rule 412 under the 1933 Act), as of the date of the most
recent Prospectus Supplement or the Prospectus (as supplemented) as of
the applicable Closing Time, contained
<PAGE> 19
19
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being
understood that such counsel expresses no belief with respect to the
financial statements and notes and schedules thereto and other
financial, accounting, tax and statistical data included in (or
incorporated in) the Registration Statement or the Prospectus or with
respect to the Statement of Eligibility and Qualification of the
Trustee on Form T-1, if any.
In rendering such opinion, Stroock & Stroock & Lavan (or such
other counsel) (i) may rely as to factual matters upon certificates or
written statements from officers or other appropriate representatives
of the Company or upon certificates of public officials, (ii) may rely
(to the extent such counsel deems proper and specifies in their
opinion), as to matters involving the application of the laws of the
State of Louisiana, upon the opinion of Kantrow, Spaht, Weaver &
Blizter (A Professional Law Corporation) or such other outside counsel
of recognized standing reasonably acceptable to the Underwriters, that
may opine on matters of Louisiana law, and (iii) need not express any
opinion with regard to the laws of any jurisdiction other than the
federal law of the United States and the law of the State of New York.
Further, such opinion may contain assumptions, limitations, exceptions
and restrictions which are reasonably satisfactory to you and your
counsel.
(c) At the applicable Closing Time, each of you shall
have received a signed opinion of Kantrow, Spaht, Weaver & Blizter (A
Professional Law Corporation), or such other outside counsel of
recognized standing reasonably acceptable to the Underwriters that may
opine on matters of Louisiana law, counsel for the Company, dated as
of the applicable Closing Time, in form and substance satisfactory to
your counsel, to the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the
State of Louisiana, with corporate power and authority to own
its property and to conduct its business as described in the
Prospectus. The Company is duly qualified as a foreign
corporation in each of the respective jurisdictions set forth
on Exhibit A to such opinion and officers of the Company have
submitted to such counsel a certificate, a copy of which is
attached to such opinion as Exhibit B, stating that, in their
opinion, such jurisdictions are the only jurisdictions in
which the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent
that the failure to be so qualified is not reasonably likely
to have a material adverse effect on the Company and its
subsidiaries considered as one enterprise;
<PAGE> 20
20
(ii) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation in each of the
respective jurisdictions set forth on Exhibit A to such
opinion and officers of such subsidiary have submitted to such
counsel a certificate, a copy of which is attached to such
opinion as Exhibit B, stating that, in their opinion, such
jurisdictions are the only jurisdictions in which the conduct
of its business or its ownership or leasing of property
requires such qualifications, except to the extent that the
failure to be so qualified is not reasonably likely to have a
material adverse effect on the Company and its subsidiaries
considered as one enterprise; all of the issued and
outstanding capital stock of each subsidiary (other than the
senior preferred stock of FMC) has been duly authorized and
validly issued, is fully paid and non-assessable and all of
the issued and outstanding capital stock of such subsidiaries
(other than the senior preferred stock of FMC), is owned of
record by the Company, directly or through subsidiaries, and
is free and clear of any pledge, lien, encumbrance, claim or
equity (except for the pledge by the Company of all the issued
and outstanding capital stock of UCLC and UCLIC in favor of
Chemical Bank, for itself and as agent pursuant to the Credit
Agreement, which pledge will be released at the Closing Time);
UCLC is a corporation in good standing under the laws of the
State of Louisiana; and UCLIC and United General Title
Insurance Company are each in compliance with the laws of the
State of Louisiana;
(iii) The Debt Securities, if any, described in the
applicable Terms Agreement have been duly authorized by the
Company;
(iv) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Indentures and the related Supplemental
Indenture(s), if any. The Indentures, if any, have been duly
authorized, executed and delivered by the Company;
(v) The Company has the requisite corporate power
and authority to issue and deliver the Offered Securities;
(vi) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under this Agreement and the applicable Terms Agreement. This
Agreement, the applicable Terms
<PAGE> 21
21
Agreement and the Delayed Delivery Contracts, if any, have
been duly authorized, executed and delivered by the Company;
(vii) Neither (A) the execution and delivery by the
Company of each of the Operative Documents to be executed and
delivered by the Company at or prior to the applicable Closing
Time nor (B) the issuance and sale of the Offered Securities
by the Company pursuant to this Agreement, the applicable
Terms Agreement and the Indentures and the related
Supplemental Indentures, if any, will, as of the applicable
Closing Time, result in the violation or breach by the Company
of, or a default under, (1) its articles of incorporation or
by-laws, (2) any federal or Louisiana statute, rule or
regulation applicable to the Company or any of its
subsidiaries (except that no opinion is expressed with respect
to blue sky or state securities laws), (3) any agreement or
other instrument known to such counsel and listed as an
Exhibit to the Company's most recent Annual Report on Form
10-K for the Company's most recent fiscal year binding upon
the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, considered as one enterprise, or
(4) any court or administrative orders, writs, judgments or
decrees applicable to the Company and known to such counsel;
(viii) To the best of such counsel's knowledge, no
consent, approval, authorization or order of, or filing with,
any federal or Louisiana court or governmental body or agency
is required to be obtained or made by the Company or any of
its subsidiaries for the execution and delivery by the Company
of each of the Operative Documents to be executed and
delivered by the Company at or prior to the Closing Time and
the consummation of the issuance and sale of the Offered
Securities by the Company pursuant to this Agreement, the
applicable Terms Agreement and the Indentures and the related
Supplemental Indentures, if any, except such as have been
obtained or made under the 1933 Act and such as may be
required under state securities laws in connection with the
purchase and distribution of such Securities by you;
(ix) After due inquiry, such counsel has no
knowledge of any legal or governmental proceeding pending or
threatened to which the Company or any of its subsidiaries is
a party or to which any of the properties of the Company or
any of its subsidiaries is subject that is required to be
described in the Registration Statement or the Prospectus and
is not so described therein; or of any statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the
<PAGE> 22
22
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(x) If any Offered Securities to be issued are
convertible or exchangeable, the related Underlying Securities
are duly and validly authorized, have been duly reserved for
issuance upon conversion or exchange of the Offered
Securities, and when issued upon the conversion or exchange of
the Offered Securities, will be duly and validly issued and,
in the case of such Underlying Securities which are Common
Stock, fully paid and non- assessable;
(xi) If the Offered Securities are Preferred Stock
or Debt Securities convertible or exchangeable into Common
Stock, such counsel shall opine that all of the outstanding
shares of capital stock of the Company have been duly
authorized and are validly issued, fully paid and
non-assessable, and except as disclosed in the Prospectus none
of the outstanding shares of capital stock of the Company are
subject to any preemptive or similar rights; and
(xii) Each of the documents incorporated or deemed
to be incorporated by reference in the Registration Statement,
at the time it was filed with the Commission, complied as to
form in all material respects with the requirements for such
document under the 1934 Act and the regulations thereunder.
In addition, such counsel has participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants for the Company, and the
Representatives, at which the contents of the Registration Statement
and the Prospectus and related matters were discussed and, although
such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus
and have not been called on to make and have not made any independent
check or verification thereof, during the course of such participation
(relying as to materiality to a large extent upon the statements of
officers and other representatives of the Company), no facts came to
such counsel's attention that caused such counsel to believe that the
Registration Statement, at the time it became effective, or if an
amendment to the Registration Statement or an annual report on Form
10-K has been filed by the Company with the Commission subsequent to
the effectiveness of the Registration Statement, then at the time such
post-effective amendment became effective or as of the most recent
filing, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements
<PAGE> 23
23
therein not misleading, or that the Prospectus (including the
documents incorporated by reference therein but giving effect to Rule
412 under the 1933 Act), as of the date of the most recent Prospectus
Supplement or the Prospectus (as supplemented) as of the applicable
Closing Time, contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; it being understood that such counsel expresses no belief
with respect to the financial statements and notes and schedules
thereto and other financial, accounting, tax and statistical data
included in (or incorporated in) the Registration Statement or the
Prospectus or with respect to the Statement of Eligibility and
Qualification of the Trustee on Form T-1, if any.
In rendering such opinion, Kantrow, Spaht, Weaver & Blizter (A
Professional Law Corporation) (or such other counsel) (i) may rely as
to factual matters upon certificates or written statements from
officers or other appropriate representatives of the Company and its
subsidiaries and upon certificates of public officials and (ii) need
not express any opinion with respect to the laws of any jurisdiction
other than the federal law of the United States and the law of the
State of Louisiana. Further, such opinion may contain assumptions,
limitations, exceptions and restrictions which are reasonably
satisfactory to you and your counsel.
(d) At the Closing Time, each of you shall have received
the favorable opinion of Simpson Thacher & Bartlett as your counsel,
dated as of the applicable Closing Time, to the effect that the
opinions delivered pursuant to Sections 5(b) and 5(c) appear on their
face to be appropriately responsive to the requirements of this
Agreement and the applicable Terms Agreement except, specifying the
same, to the extent waived by you, and with respect to the Securities,
this Agreement and the applicable Terms Agreement, the Indentures, if
any, the Registration Statement, the Prospectus, the incorporation and
legal existence of the Company and such other related matters as you
may reasonably require. In giving such opinion, such counsel may rely,
as to all matters governed by the laws of jurisdictions other than the
federal law of the United States, the law of the State of New York and
the General Corporation Law of the State of Delaware, upon the opinions
of counsel satisfactory to you. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers or other
appropriate representatives of the Company and its subsidiaries and
certificates of public officials.
(e) At the applicable Closing Time, (i) the Registration
Statement and the Prospectus, as they may then
<PAGE> 24
24
be amended or supplemented, shall contain all statements that are
required to be stated therein under the 1933 Act and the regulations
thereunder and in all material respects shall conform to the
requirements of the 1933 Act and the regulations thereunder and the
1939 Act and the regulations thereunder, and neither the Registration
Statement nor the Prospectus, as they may then be amended or
supplemented, shall contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) there
shall not have been, since the respective dates as of which
information is given in the Prospectus (as supplemented), any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), properties,
assets, business or results of operations of the Company and its
subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business; (iii) no action, suit or proceeding
at law or in equity shall be pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries
that would be required to be set forth in the Prospectus other than as
set forth therein or in any supplement thereto and no proceedings
shall be pending or, to the knowledge of the Company, threatened
against it or any of its subsidiaries before or by any federal, state
or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding is reasonably likely to
materially adversely affect the condition (financial or otherwise),
properties, assets, business or results of operations of the Company
and its subsidiaries, considered as one enterprise, other than as set
forth in the Prospectus or in any supplement thereto; (iv) the Company
shall have complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the applicable
Closing Time; and (v) the other representations and warranties of the
Company set forth in Section l(a) shall be accurate as though
expressly made at and as of the applicable Closing Time. At the
applicable Closing Time, each of you shall have received a certificate
of the President or a Vice President, and the Treasurer or Assistant
Treasurer, of the Company, dated as of the applicable Closing Time, to
such effect to such officer's knowledge.
(f) At the time that a Terms Agreement is executed by the
Company, each of you shall have received from Deloitte & Touche LLP or
such other nationally recognized independent public accountants who
are reporting on the audited financial statements and schedules
included or incorporated by reference in the Registration Statement a
letter dated the date thereof and also at the applicable Closing Time
a letter dated the date thereof, in each case in form and substance
satisfactory to the Representatives, containing statements and
information of the type ordinarily included
<PAGE> 25
25
in the accountant's "comfort letters" to underwriters with respect to
financial statements and certain financial information contained in
the Registration Statement and the Prospectus.
(g) At the applicable Closing Time, your counsel shall
have been furnished with all such documents (including any consents
under any agreements to which the Company is a party), certificates and
opinions as they may reasonably request for the purpose of enabling
them to pass upon the issuance and sale of the Securities as
contemplated in this Agreement and the applicable Terms Agreement and
the matters referred to in Section 5(d) and in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements of the Company, the performance of any of the covenants of
the Company, or the fulfillment of any of the conditions herein and in
the applicable Terms Agreement contained; and all proceedings taken by
the Company at or prior to the applicable Closing Time in connection
with the authorization, issuance and sale of the Offered Securities,
and by the Company at or prior to the applicable Closing Time in
connection with the authorization and delivery of any other Operative
Documents, each as contemplated in this Agreement and the applicable
Terms Agreement, shall be reasonably satisfactory in form and
substance to you and to your counsel.
(h) If the Offered Securities to be sold to you pursuant
to an applicable Terms Agreement are to be listed on any securities
exchange, such Securities shall have been duly authorized for listing
on such exchange on the date of the applicable Terms Agreement, subject
only to official notice of issuance thereof and notice of a
satisfactory distribution of the Securities.
(i) On or after the date of the applicable Terms
Agreement (i) no downgrading shall have occurred in the rating accorded
any of the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization" as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the 1933
Act and regulations thereunder and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of the Company's debt
securities or preferred stock.
(j) Each of the Indentures and the related Supplemental
Indentures, if any, shall have been executed and delivered by all
parties thereto on or prior to the Closing Time, in each case in
substantially the form last filed by the Company with the Commission,
and each such instrument shall be in full force and effect at the
Closing Time.
<PAGE> 26
26
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement or the applicable
Terms Agreement to be fulfilled, this Agreement and the applicable Terms
Agreement may be terminated by you on notice to the Company at any time at or
prior to the applicable Closing Time, and such termination shall be without
liability of any party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Sections 6 and 7 shall
remain in effect.
Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each of you and each person, if any, who controls
any of you within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including all
documents incorporated or deemed to be incorporated by reference in
the Registration Statement, or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of an untrue statement or alleged untrue statement of a material fact
included in the Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever (including
fees and disbursements of counsel chosen by you (except to the extent
otherwise expressly provided in paragraph (c) of this Section 6))
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
provided, however, that the Company's obligations under this indemnity do not
apply to any loss, liability, claim, damage or
<PAGE> 27
27
expense to the extent arising out of an untrue statement or omission or alleged
untrue statement or omission made in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Company by any of you through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto); and provided further, that as to any related
preliminary prospectus or preliminary prospectus supplement this indemnity
agreement shall not inure to the benefit of any Underwriter on account of any
loss, claim, damage or liability (or action in respect thereof) arising from
the sale of Offered Securities to any person by that Underwriter if that
Underwriter failed to send or give a copy of the Prospectus, as the same may be
amended or supplemented, to that person within the time required by the 1933
Act, and the untrue statement or alleged untrue statement of any material fact
or omission or alleged omission to state any material fact in such preliminary
prospectus or preliminary prospectus supplement was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Company
with Section 3(b). For purposes of the second proviso to the immediately
preceding sentence, the term Prospectus shall not be deemed to include the
documents incorporated by reference therein, and no Underwriter shall be
obligated to send or give any supplement or amendment to any document
incorporated by reference in a preliminary prospectus, a preliminary prospectus
supplement or the Prospectus to any person other than a person to whom such
Underwriter has delivered such incorporated documents in response to a written
request therefor.
(b) Each of you agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of their
respective officers who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 6(a), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Company by you through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers served, but
failure to so notify an indemnifying party shall not relieve it from any
liability that it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of such action. If it so elects within a
<PAGE> 28
28
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and approved by the
indemnified parties who are defendants in such action, provided that, if such
indemnified party or parties reasonably determine that there may be legal
defenses that are different from or in addition to those available to such
indemnifying party or parties, then such indemnifying party or parties shall
not be entitled to assume such defense. If the indemnifying party or parties
are not entitled to assume the defense of such action as a result of the
proviso to the preceding sentence, counsel for the indemnifying party or
parties shall be entitled to conduct the defense of such indemnifying party or
parties and counsel for the indemnified party or parties shall be entitled to
conduct the defense of such indemnified party or parties. If an indemnifying
party assumes the defense of such action, the indemnifying parties shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel (in addition to any local counsel) for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
(d) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding. No indemnifying party shall be liable for any settlement
that an indemnified party may effect without the consent of the indemnifying
party, which consent shall not be unreasonably withheld.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances under which the indemnity provided for
in Section 6 is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and each
of you shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity incurred by the
Company and one or more of you, in such proportions as will reflect the
relative benefits from the offering of such Securities received by the Company
on the one hand and by you, on the other hand, provided that if the Securities
are offered by you at an initial public offering price set forth in a
Prospectus Supplement, the relative benefits shall be deemed to be such that
you shall be responsible for that portion of the aggregate losses, liabilities,
claims, damages and expenses represented by the percentage that the
underwriting commission appearing on the cover page of the Prospectus
<PAGE> 29
29
Supplement bears to the initial public offering price appearing thereon and the
Company shall be responsible for the balance; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person, if any, who controls any of you within the meaning of Section 15
of the 1933 Act shall have the same rights to contribution as you, and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities, agreements and
other statements of the Company or its officers set forth in or made pursuant
to this Agreement will remain operative and in full force and effect regardless
of any termination of the applicable Terms Agreement (including this Agreement
as incorporated by reference therein), or any investigation made by or on
behalf of the Company or any of you or any controlling person and will survive
delivery of and payment for the Securities.
Section 9. Termination of Agreement. (a) The
Representatives may terminate the applicable Terms Agreement (including this
Agreement, as incorporated by reference therein), immediately by notice to the
Company, at any time at or prior to the applicable Closing Time (i) if there
has been, since the respective dates as of which information is given in the
Prospectus, any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or otherwise),
properties, assets, business or results of operations of the Company and its
subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any new outbreak of
hostilities or escalation of existing hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in your reasonable judgment, impracticable to market the Securities or
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended by the Commission, or if trading
generally on either the New York Stock Exchange or the American Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
such exchanges or by order of the Commission or any other governmental
authority or (iv) if a general commercial banking moratorium has been declared
by either federal or New York authorities.
(b) If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any
<PAGE> 30
30
party to any other party, except to the extent provided in Section 4 hereof.
Notwithstanding any such termination, the covenants set forth in Section 3 with
respect to any offering of Securities purchased from the Company pursuant to
the applicable Terms Agreement and the provisions of Sections 6 and 7 shall
remain in effect.
(c) This Agreement may also terminate pursuant to the
provisions of Sections 2, 5 and 10, with the effect stated in such Sections.
Section 10. Default by One or More of the Underwriters. If
one or more of you shall fail at the applicable Closing Time to purchase the
Securities that such Underwriter or Underwriters are obligated to purchase
pursuant to the applicable Terms Agreement (the "Defaulted Securities"), the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
substitute underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
set forth in this Agreement; if, however, you have not completed such
arrangements within such 24-hour period, then:
(a) if the aggregate amount of Defaulted Securities does
not exceed 10% of the aggregate amount of the Securities to be
purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in
the proportions that their respective underwriting obligation
proportions bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the aggregate amount of Defaulted Securities
exceeds 10% of the aggregate amount of the Securities to be purchased
pursuant to such Terms Agreement, such Terms Agreement (including this
Agreement as incorporated by reference therein) shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of the applicable Terms Agreement, either the Representatives or
the Company shall have the right to postpone the applicable Closing Time for a
period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
Section 11. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or
<PAGE> 31
31
transmitted by any standard form of telecommunication. Notices to you shall be
directed to you as provided in the applicable Terms Agreement. Notices to the
Company shall be directed to it c/o United Companies Financial Corporation,
4041 Essen Lane, Baton Rouge, Louisiana 70809, attention of Dale E. Redman,
with copies to Kantrow, Spaht, Weaver & Blitzer (A Professional Law
Corproation), attention of Lee C. Kantrow and Stroock & Stroock & Lavan,
attention of Reed D. Auerbach.
Section 12. Parties. The applicable Terms Agreement and this
Agreement are made solely for the benefit of each of you, the Company and, to
the extent expressed, any person controlling either the Company or any of you,
and the directors of the Company, the officers of the Company who have signed
the Registration Statement, and the executors, administrators, successors and
assigns of such persons and, subject to the provisions of Section 10, no other
person shall acquire or have any right under or by virtue of the applicable
Terms Agreement or this Agreement. The term "successors and assigns" shall not
include any purchaser, as such purchaser, from any of you of the Securities.
All of the obligations of each of you hereunder are several and not joint.
Section 13. Governing Law and Time. This Agreement and each
Terms Agreement shall be governed by the law of the State of New York without
regard to the conflicts of law principles thereof. Specified times of the day
refer to New York City time.
Very truly yours,
UNITED COMPANIES
FINANCIAL CORPORATION
By: _________________________
Name:
Title:
<PAGE> 32
Exhibit A(I)
UNITED COMPANIES FINANCIAL CORPORATION
(a Louisiana corporation)
$___________
Debt Securities
TERMS AGREEMENT
_______ __, 199_
To: United Companies Financial Corporation
4041 Essen Lane
Baton Rouge, Louisiana 70809
Dear Sirs:
Reference is made to the United Companies Financial Corporation
Securities Underwriting Agreement-Basic Provisions dated __ __ __, 1994 (the
"Underwriting Agreement"). This Agreement is the Terms Agreement referred to
in the Underwriting Agreement. We offer to purchase, on and subject to the
terms and conditions of the Underwriting Agreement, the following securities
("Securities") on the following terms:
<TABLE>
<CAPTION>
Title: due
------------ ------------
<S> <C>
Principal Amount to be issued: $
-----------
Date of maturity:
------------
Interest rate: %
------------
Interest payment dates: and of each year
------------ --------------
Public offering price: %, plus accrued interest from
------------ ------------
Purchase Price: %, plus accrued interest from (payable by
------------ ------------
(wire transfer in same-day federal funds, less one day's interest
at the federal funds rate) (certified or official bank check in New
York Clearinghouse funds))
Underwriting Commission: %
-----
</TABLE>
<PAGE> 33
2
<TABLE>
<S> <C>
Redemption provisions: (Redeemable at the option of the Company in whole or in part on and
after , at 100% of principal amount plus accrued
-------- -- -----
interest to the date of redemption.)
Conversion or
------------
Exchange Provisions:
Delayed Delivery Contracts:
------------
Closing date and location: , 10:00 A.M.;
------------
Simpson Thacher & Bartlett, 425 Lexington Avenue
New York, New York 10017
Additional co-managers, if any:
------------
Additional underwriters, if any:
------------
Other terms:
------------
</TABLE>
The Company represents and warrants to each of us that the
representations and warranties of the Company set forth in Section 1 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof. All of the provisions contained in the Underwriting Agreement, a
copy of which is attached hereto as Annex A, are herein incorporated by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein.
Terms defined in such document are used herein as therein defined.
As contemplated by Section 2 of the Underwriting Agreement,
attached as Schedule A hereto is a completed list of our respective
underwriting commitments, which shall be a part of this Agreement and the
Underwriting Agreement.
This Agreement shall be governed by the laws of the State of
New York without regard to the conflicts of law principles thereof.
If the foregoing is in accordance with your understanding of
the agreement between the Underwriters and you, please sign and return to the
Underwriters a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
<PAGE> 34
3
agreement between the Underwriters and you in accordance with its terms and the
terms of the Underwriting Agreement.
Very truly yours,
( )
By: ________________________
Confirmed and accepted as of
the date first above written:
UNITED COMPANIES
FINANCIAL CORPORATION
By: ________________________
Name:
Title:
<PAGE> 35
Exhibit A(II)
UNITED COMPANIES FINANCIAL CORPORATION
(a Louisiana corporation)
Equity Securities
TERMS AGREEMENT
_______ __, 199_
To: United Companies Financial Corporation
4041 Essen Lane
Baton Rouge, Louisiana 70809
Dear Sirs:
Reference is made to the United Companies Financial Corporation
Securities Underwriting Agreement-Basic Provisions dated __ __ __, 1994 (the
"Underwriting Agreement"). This Agreement is the Terms Agreement referred to
in the Underwriting Agreement. We offer to purchase, on and subject to the
terms and conditions of the Underwriting Agreement, the following securities
("Securities") on the following terms:
<TABLE>
<CAPTION>
Title: Preferred Stock, Series
--
<S> <C>
Number of Shares to be issued: shares
-----------
Voting Rights:
------------
Dividends: (cash) dividends of $ to $ per share payable
quarterly in arrears on , , ,
-------- -- -------- -- -------- --
and
-------- --
Public offering price: $ per share
------------
Purchase Price: $ per share (payable by (wire transfer in same-day
------------
federal funds, less one day's interest at the federal funds rate)
(certified or official bank check in New York Clearinghouse funds))
Underwriting Commission: %
-----
</TABLE>
<PAGE> 36
2
<TABLE>
<S> <C>
Redemption provisions:
------------
Liquidation Preference: $ per share plus .
------------
Conversion or Exchange
------------
Provisions:
Over-Allotment Option:
------------
Closing date and location: , 10:00 A.M.;
------------
Simpson Thacher & Bartlett, 425 Lexington Avenue
New York, New York 10017
Additional co-managers, if any:
------------
Additional underwriters, if any:
------------
Other Terms:
------------
Name of Transfer Agent and
------------
Registrar:
</TABLE>
The Company represents and warrants to each of us that the
representations and warranties of the Company set forth in Section 1 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof. All of the provisions contained in the Underwriting Agreement, a
copy of which is attached hereto as Annex A, are herein incorporated by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein.
Terms defined in such document are used herein as therein defined.
As contemplated by Section 2 of the Underwriting Agreement,
attached as Schedule A hereto is a completed list of our respective
underwriting commitments, which shall be a part of this Agreement and the
Underwriting Agreement.
This Agreement shall be governed by the laws of the State of
New York without regard to the conflicts of law principles thereof.
If the foregoing is in accordance with your understanding of
the agreement between the Underwriters and you, please sign and return to the
Underwriters a counterpart hereof, whereupon this instrument along with all
counterparts and
<PAGE> 37
3
together with the Underwriting Agreement shall be a binding agreement between
the Underwriters and you in accordance with its terms and the terms of the
Underwriting Agreement.
Very truly yours,
( )
By: ________________________
Confirmed and accepted as of
the date first above written:
UNITED COMPANIES
FINANCIAL CORPORATION
By: ________________________
Name:
Title:
<PAGE> 38
SCHEDULE A
<TABLE>
<CAPTION>
Principal Amount
of Debt Securities
to be Purchased/
Number of Shares of
Underwriter Preferred Stock
----------- -------------------
<S> <C>
( ) . . . . . . . . . . . . . . .
( ) . . . . . . . . . . . . . . .
( ) . . . . . . . . . . . . . . .
------------------------
Total . . . . . . .
------------------------
</TABLE>
<PAGE> 39
Exhibit B
United Companies Financial Corporation
c/o (Manager's Address)
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from United
Companies Financial Corporation (the "Company"), and the Company agrees to sell
to the undersigned, on ____________, 19__ (the "Delivery Date"), $____________
principal amount of the Company's ___% (Notes)(Debentures) due ____________,
19__ (the "Securities"), offered by the Company's Prospectus dated
____________, 19__, as supplemented by its Prospectus Supplement dated
____________, 19__, receipt of which is hereby acknowledged, at a purchase
price of ___% of the principal amount thereof, plus accrued interest from
____________, 19__, to the Delivery Date, and on the further terms and
conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by
certified or official bank check in New York Clearing House funds, at the
office of the Underwriters, on the Delivery Date, upon delivery to the
undersigned of the Securities to be purchased by the undersigned in definitive
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to the Delivery Date.
The obligations of the undersigned to take delivery of and
make payment for Securities on the Delivery Date shall be subject only to the
conditions that (1) the purchase of Securities to be made by the undersigned
shall not on the Delivery Date be prohibited under the laws of the jurisdiction
to which the undersigned is subject and (2) the Company, on or before
____________, 19__, shall have sold to the Underwriters of the Securities (the
"Underwriters") such principal amount of the Securities as is to be sold to
them pursuant to the Terms Agreement dated ____________, 19__ between the
Company and the Underwriters. The obligation of the undersigned to take
delivery of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payment for Securities
pursuant to other contracts similar to this contract. The undersigned
represents and warrants to you that its investment in the Securities is not, as
of the date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied
<PAGE> 40
2
by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.
By the execution hereof, the undersigned represents and
warrants to the Company that all necessary corporate action for the due
execution and delivery of this contract and the payment for and purchase of the
Securities has been taken by it and no further authorization or approval of any
governmental or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and mailing or delivery of a copy as provided below, this contract will
constitute a valid and binding agreement of the undersigned in accordance with
its terms.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed
Delivery Contracts for an aggregate principal amount of Securities in excess of
$____________ and that the acceptance of any delayed Delivery Contract is in
the Company's sole discretion and, without limiting the foregoing, need not be
on a first-come, first-served basis. If this contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance on a copy
hereof and mail or deliver a signed copy hereof to the undersigned at its
address set forth below. This
<PAGE> 41
3
will become a binding contract between the Company and the undersigned when
such copy is mailed or delivered.
This Agreement shall be governed by the laws of the State of
New York without regard to the conflicts of law principles thereof.
Yours very truly,
______________________________
(Name of Purchaser)
By____________________________
(Title)
______________________________
______________________________
(Address)
Accepted as of the date
first above written.
United Companies
Financial Corporation
By________________________
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed
is as follows: (Please print.)
<TABLE>
<CAPTION>
Telephone No.
Name (Including Area Code)
---- ------------------------
<S> <C>
</TABLE>
<PAGE> 1
Exhibit 4.2
Draft 9/27/94
================================================================================
UNITED COMPANIES FINANCIAL CORPORATION
To
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
__________
Indenture
Dated as of September __, 1994
__________
SENIOR DEBT SECURITIES
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . 13
Section 1.03. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . 14
Section 1.04. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . 14
Section 1.05. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.06. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.07. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . 16
Section 1.08. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.09. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.13. No Security Interest Created . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.14. Liability Solely Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE TWO
DEBT SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.02. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . 19
Section 2.03. Securities in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE THREE
THE DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.01. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . 19
Section 3.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.03. Execution, Authentication, Delivery and Dating . . . . . . . . . . .. . . . . . 24
Section 3.04. Temporary Debt Securities; Exchange of Temporary Global Notes for Definitive
Bearer Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.05. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities . .. . . . . . . . . . . 36
Section 3.07. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . 37
Section 3.08. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 3.09. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 3.10. Currency of Payments in Respect of Debt . . . . . . . . . . . . . . . . . . . . 41
Section 3.11. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 3.12. Exchange Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.01. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . 46
Section 4.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.02. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . 50
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee. . . . . . . . 51
Section 5.04. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.05. Trustee May Enforce Claims Without Possession of Debt Securities . . . . . . . 53
Section 5.06. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.07. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest. . . 55
Section 5.09. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.13. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.14. Undertaking for Costs . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 57
Section 5.15. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE SIX
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.01. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . 58
Section 6.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.03. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.04. Not Responsible for Recitals or Issuance of Debt Securities . . . . . . . . . 61
Section 6.05. May Hold Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.06. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.08. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . 62
Section 6.09. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . 69
Section 6.10. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . 70
Section 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . 71
Section 6.12. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . 73
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 6.13. Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 6.14. Appointment of Authenticating Agent. . . . . . . . . . . . . . . . . . . . . 77
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY. . . . . . . . . . . . . . . . . . . . 79
Section 7.01. Company to Furnish Trustee Names and
Addresses of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 7.02. Preservation of Information;
Communication to Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 7.03. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 7.04. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE EIGHT
CONCERNING THE HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 8.01. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 8.02. Proof of Ownership; Proof of Execution
of Instruments by Holder. . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 8.03. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 8.04. Revocation of Consents; Future Holders
Bound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE NINE
HOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 9.01. Purposes of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 9.02. Call of Meetings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 9.03. Call of Meetings by Company or Holders. . . . . . . . . . . . . . . . . . . . 87
Section 9.04. Qualifications for Voting . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.05. Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.06. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.07. No Delay of Rights by Meeting . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.01. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.02. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 11.03. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 93
Section 11.04. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . 93
Section 11.05. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . 93
Section 11.06. Reference in Debt Securities to
Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 11.07. Notice of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . 93
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE TWELVE
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 12.01. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 12.02. Officer's Certificate as to Default. . . . . . . . . . . . . . . . . . . . . 94
Section 12.03. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . 94
Section 12.04. Money for Debt Securities; Payments to
Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 12.05. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 12.06. Purchase of Debt Securities by Company . . . . . . . . . . . . . . . . . . . 98
Section 12.07. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 12.08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 12.09. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . 98
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 13.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 13.02. Election to Redeem; Notice to Trustee. . . . . . . . . . . . . . . . . . . . 99
Section 13.03. Selection by Trustee of Debt Securities
to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 13.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 13.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 13.06. Debt Securities Payable on Redemption
Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 13.07. Debt Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . 102
ARTICLE FOURTEEN
SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 14.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 14.02. Satisfaction of Mandatory Sinking Fund
Payments with Debt Securities . . . . . . . . . . . . . . . . . . . . . . 103
Section 14.03. Redemption of Debt Securities for
Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
ARTICLE FIFTEEN
DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 15.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 15.02. Defeasance Upon Deposit of Moneys or
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . 106
Section 15.03. Deposited Moneys and U.S. Government
Obligations to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . 108
Section 15.04. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
</TABLE>
-iv-
<PAGE> 6
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of September , 1994
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C> <C>
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
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . 5.03
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 5.04
(b) . . . . . . . . . . . . . . . . . . . . . . . 12.04
Section 318 . . . . . . . . . . . . . . . . . . . . . . . . . 1.06
- ---------------
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE> 7
INDENTURE dated as of September __, 1994, between UNITED COMPANIES
FINANCIAL CORPORATION, a Louisiana corporation (hereinafter called the
"Company"), having its principal executive office at 4041 Essen Lane, Baton
Rouge, Louisiana 70809, and The First National Bank of Chicago, a national
banking association, as trustee (hereinafter called the "Trustee"), having its
Corporate Trust Office at One First National Plaza, Suite 0126, Chicago,
Illinois 60670-0126.
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 unsecured
debentures, notes, bonds or other evidences of indebtedness (herein generally
called the "Debt Securities"), to be issued in one or more series, as in this
Indenture provided.
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 follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(2) 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;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles, and, except as otherwise herein
expressly provided, the term "generally accepted accounting
principles" with respect to any
<PAGE> 8
2
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States
of America at the date of such computation; and
(4) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Three or Article Six, are defined in
those respective Articles.
"Act" when used with respect to any Holder, has the meaning
specified in Section 8.01.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes
of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Affiliated Corporation" means any corporation which is
controlled by the Company but which is not a Subsidiary of the Company
pursuant to the definition of the term "Subsidiary".
"Authenticating Agent" has the meaning specified in Section
6.14.
"Authorized Newspaper" means a newspaper or financial journal
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.
"Bearer Security" means any Debt Security (with or without
Coupons), in the form established pursuant to Section 2.01, which is
payable to bearer (including any Global Note payable to bearer) and
title to which
<PAGE> 9
3
passes by delivery only, but does not include any Coupons.
"Board of Directors" means either the board of directors of
the Company, or any committee of that board duly authorized to act
hereunder or any director or directors and/or officer or officers of
the Company to whom that board or committee shall have delegated its
authority.
"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 3.01.
"CEDEL" means Cedel S.A.
"Code" means the Internal Revenue Code of 1986, as amended
and as in effect on the date hereof.
"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
3.04(b).
"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 any two
of the Chairman, a Vice Chairman, the President, the Chief Financial
Officer, an Executive Vice President, the Treasurer, the
<PAGE> 10
4
Controller or the Secretary of the Company, and delivered to the
Trustee.
"Component Currency" has the meaning specified in Section
3.10(i).
"Conversion Date" has the meaning specified in Section 3.10(e).
"Conversion Event" means the cessation of (i) a Foreign
Currency to be used both by the government of the country which issued
such Currency and for the settlement of transactions by public
institutions of or within the international banking community, (ii)
the ECU to be used both within the European Monetary System and for
the settlement of transactions by public institutions of or within the
European Communities or (iii) any Currency unit other than the ECU to
be used for the purposes for which it was established.
"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 One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126.
"Corporation" includes corporations, associations, companies
(including joint stock companies and limited liability companies) and
business trusts.
"Coupon" means any interest coupon appertaining to any Debt
Security.
"Coupon Security" means any Bearer Security authenticated and
delivered with one or more Coupons appertaining thereto.
"Currency" means Dollars or Foreign Currency or Currency unit.
"Currency Determination Agent" means the New York Clearing
House bank, if any, from time to time selected by the Company pursuant
to Section 3.01; provided that such agent shall accept such
appointment in writing and the terms of such appointment shall be
acceptable to the Company and shall, in the opinion of the Company and
the Trustee at the time of such appointment, require such agent to
make the determinations required by this Indenture by a method
consistent with the method provided in this Indenture for the making
of such decision or determination.
<PAGE> 11
5
"Currency unit" means a composite currency or currency unit
the value of which is determined by reference to the value of the
currencies of any group of countries.
"Debt Securities" has the meaning stated in the first recital
of this Indenture and more particularly means any Debt Securities
(including any Global Notes) authenticated and delivered under this
Indenture.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Discharged" has the meaning specified in Section 15.02.
"Discount Security" means any Debt Security which is issued
with "original issue discount" within the meaning of Section 1273(a)
of the Code and the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit 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.
"Dollar Equivalent of the Currency Unit" has the meaning
specified in Section 3.10(h).
"Dollar Equivalent of the Foreign Currency" has the meaning
specified in Section 3.10(g).
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 3.10(i).
"Euro-clear Operator" means Morgan Guaranty Trust Company of
New York, Brussels office, or its successor as operator of the
Euro-clear System.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy
Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of
the European Communities.
"Event of Default" has the meaning specified in Section 5.01.
<PAGE> 12
6
"Exchange Date" has the meaning specified in Section 3.04(b).
"Exchange Rate Officer's Certificate" means a telex or a
certificate setting forth (i) the applicable Market Exchange Rate and
(ii) the Dollar, Foreign Currency or Currency unit amounts of
principal, premium, if any, and any interest respectively (on an
aggregate basis and on the basis of a Debt Security having the lowest
denomination principal amount determined in accordance with Section
3.02 in the relevant Currency or Currency unit), payable on the basis
of such Market Exchange Rate sent (in the case of a telex) or signed
(in the case of a certificate) by the Treasurer or any Assistant
Treasurer of the Company.
"Fixed Rate Security" means a Debt Security which provides for
the payment of interest at a fixed rate.
"Floating Rate Security" means a Debt Security which provides
for the payment of interest at a variable rate determined periodically
by reference to an interest rate index or any other index specified
pursuant to Section 3.01.
"Foreign Currency" means a currency issued by the government
of any country other than the United States or a composite currency or
currency unit the value of which is determined by reference to the
values of the currencies of any group of countries.
"Global Note" means a Registered or Bearer Security evidencing
all or part of a series of Debt Securities, including, without
limitation, any temporary or permanent Global Note.
"Holder" means, with respect to a Registered Security, the
Registered Holder, and with respect to a Bearer Security or a Coupon,
the bearer thereof.
"Indebtedness" means (1) any liability of any Person (a) for
borrowed money, or (b) evidenced by a bond, note, debenture or similar
instrument (including purchase money obligations but excluding Trade
Payables), or (c) for the payment of money relating to a lease that is
required to be classified as a capitalized lease obligation in
accordance with generally accepted accounting principles, or (d)
preferred or preference stock of a Subsidiary of the Company held by
Persons other than the Company or a Subsidiary of the Company; (2) any
liability of others described in the preceding clause (1) that the
Person has guaranteed, that is recourse to such Person or that is
otherwise its legal liability; and (3) any amendment, supplement,
modification,
<PAGE> 13
7
deferral, renewal, extension or refunding of any liability of the
types referred to in clauses (1) and (2) above.
"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 3.01.
The term "interest," when used with respect to a Discount
Security which by its terms bears interest only after maturity, means
interest payable after Maturity, and, when used with respect to a
Bearer Security, includes any additional amounts payable on such
Bearer Security, if so provided pursuant to Section 3.01.
"Interest Payment Date" with respect to any Debt Security
means the Stated Maturity of an installment of interest on such Debt
Security.
"Market Exchange Rate" means (i) for any conversion involving
a Currency unit on the one hand and Dollars or any Foreign Currency on
the other, the exchange rate between the relevant Currency unit and
Dollars or such Foreign Currency calculated for noon New York time, on
the Valuation Date by the method specified pursuant to Section 3.01
for the securities of the relevant series, (ii) for any conversion of
Dollars into any Foreign Currency, the noon (New York City time)
buying rate for such Foreign Currency for cable transfers quoted in
New York City as certified for customs purposes by the Federal Reserve
Bank of New York and (iii) for any conversion of one Foreign Currency
into Dollars or another Foreign Currency, the spot rate at noon local
time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which
conversion is being made could be purchased with the Foreign Currency
from which conversion is being made from major banks located in either
New York City, London or any other principal market for Dollars or
such purchased Foreign Currency. In the event of the unavailability
of any of the exchange rates provided for in the foregoing clauses
(i), (ii) and (iii) the Company shall use, in its sole discretion and
without liability on its part, such quotation of the Federal Reserve
Bank of New York as of the most recent available date, or quotations
from one or more major banks in New York City, London or other
principal market for such Currency or Currency unit in question, or
such other
<PAGE> 14
8
quotations as the Company shall deem appropriate, in its sold
discretion and without liability on its part. Unless otherwise
specified by the Currency Determination Agent, if any, or if there
shall not be a Currency Determination Agent, then by the Trustee, if
there is more than one market for dealing in any Currency or Currency
unit by reason of foreign exchange regulations or otherwise, the
market to be used in respect of such Currency or Currency unit shall
be that as determined by the Currency Determination Agent, or if there
shall not be a Currency Determination Agent, then by the Trustee, in
its sole discretion and without liability on its part, upon which a
nonresident issuer of securities designated in such Currency or
Currency unit would purchase such Currency or Currency unit in order
to make payments in respect of such securities.
"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 at the option of the
Holder thereof or otherwise.
"Officers' Certificate" means a certificate signed by any two
of the Chairman, a Vice Chairman, the President, the Chief Financial
Officer, an Executive Vice President, the Treasurer, the Controller or
the 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)
and who shall be reasonably satisfactory to the Trustee, which is
delivered to the Trustee.
"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 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 and
any Coupons thereto pertaining; provided, however, that if such Debt
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or
<PAGE> 15
9
provision therefor satisfactory to the Trustee has been made; and
(iii) Debt Securities which have been paid pursuant to Section
3.06 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 reasonably 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;
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, 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 5.02 and the
principal amount of a Debt Security denominated in a Foreign Currency
that shall be deemed to be Outstanding for such purpose shall be the
amount calculated pursuant to Section 3.10(k).
"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 3.01.
"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.
<PAGE> 16
10
"permanent Global Note" shall have the meaning given such
term in Section 3.04(b).
"Person" means any individual, Corporation, partnership, joint
venture, association, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"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 3.01.
"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 3.06 in lieu of a mutilated, lost, destroyed
or stolen Debt Security or a Debt Security to which a mutilated, lost,
destroyed or stolen Coupon appertains shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Debt Security or
the Debt Security to which the mutilated, lost, destroyed or stolen
Coupon appertains, as the case may be.
"Redemption Date" means the date fixed for redemption of any
Debt Security pursuant to this Indenture which, in the case of a
Floating Rate Security, unless otherwise specified pursuant to Section
3.01, shall be an Interest Payment Date only.
"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 of the
Maturity thereof pursuant to Section 5.02 or any other redemption
specified pursuant to Section 3.01, 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.
"Registered Holder" means the Person in whose name a
Registered Security is registered in the Security Register.
"Registered Security" means any Debt Security in the form
established pursuant to Section 2.01 which is registered as to
principal and interest in the Security Register.
<PAGE> 17
11
"Regular Record Date" for the interest payable on the
Registered Securities of any series on any Interest Payment Date means
the date specified for the purpose pursuant to Section 3.01 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, trust officer, 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 3.05(a).
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07.
"Specified Amount" has the meaning specified in Section
3.10(i).
"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 or the Coupon,
if any, 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 any corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation,
irrespective of whether or not, at the time, stock of any other class
or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency, is at the time,
directly or indirectly, owned or controlled by the Company or by one
or more Subsidiaries thereof, or by the Company and one or more
Subsidiaries thereof.
"temporary Global Note" shall have the meaning given such term
in Section 3.04(b).
"Trade Payables" means accounts payable or any other
indebtedness or monetary obligations to trade creditors
<PAGE> 18
12
created or assumed in the ordinary course of business in connection
with the obtaining of materials or services.
"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, "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
amended and as in force at the date as of which this instrument was
executed, except as provided in Section 11.05.
"United States" means the United States of America (including
the States and the District of Columbia), and its possessions, which
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa,
Wake Island and the Northern Mariana Islands.
"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 3.01 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, "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 15.02.
"U.S. Person" means a citizen or resident of the United
States, a Corporation, partnership or other entity created or
organized in or under the laws of the United States, or an estate or
trust the income of which is subject to United States Federal income
taxation regardless of its source.
"Valuation Date" has the meaning specified in Section 3.10(d).
"Vice President" includes with respect to the Company and the
Trustee, any Vice President of the
<PAGE> 19
13
Company or the Trustee, as the case may be, whether or not designated
by a number or word or words added before or after the title "Vice
President".
"Wholly-Owned Subsidiary" means a Subsidiary of which all of
the outstanding voting stock (other than directors' qualifying shares)
is at the time, directly or indirectly, owned by the Company, or by
one or more Wholly-Owned Subsidiaries of the Company or by the Company
and one or more Wholly-Owned Subsidiaries of the Company.
Section 1.02. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, 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 12.02) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
<PAGE> 20
14
Section 1.03. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 1.04. 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,
(1) 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 Services Division, or
(2) 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 Indenture, to the
attention of its Treasurer, or at any other address
<PAGE> 21
15
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 1.05. Notice to Holders; Waiver.
When this Indenture provides for notice to Holders of any
event, (1) such notice shall be sufficiently given to Registered Holders
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to such Registered Holders as their names and
addresses appear in the Security Register, within the time prescribed, and (2)
such notice shall be sufficiently given to Holders of Bearer Securities or
Coupons (unless otherwise herein expressly provided) if published at least
twice in an Authorized Newspaper or Newspapers in The City of New York and, if
Debt Securities of such series are then listed on The Stock Exchange of the
United Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or
any other stock exchange located outside the United States and such stock
exchange shall so require, in a daily newspaper or financial journal in London
or Luxembourg or in such other city or cities specified pursuant to Section
3.01 or in any Debt Security on Business Days, the first such publication to be
not earlier than the earliest date and not later than two Business Days prior
to the latest date prescribed for the giving of such notice; 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 3.01, shall be sufficiently given if given in the manner
specified pursuant to Section 3.01.
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
<PAGE> 22
16
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 1.06. 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 duties imposed by the Trust
Indenture Act shall control.
Section 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 1.08. 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 1.09. 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 1.10. 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 1.11. Governing Law.
This Indenture, the Debt Securities and the Coupons shall be
deemed to be contracts made and to be performed entirely in the State of New
York, and for all purposes shall be governed by and construed in accordance
with the laws of said State without regard to the conflicts of law rules of
said State.
<PAGE> 23
17
Section 1.12. Legal Holidays.
Unless otherwise specified pursuant to Section 3.01 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 or Coupons) 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 1.13. No Security Interest Created.
Nothing in this Indenture or in the Debt Securities or
Coupons, express or implied, shall be construed to constitute a security
interest or mortgage or other pledge of collateral under the Uniform Commercial
Code or similar legislation or real property laws, as now or hereafter enacted
and in effect in any jurisdiction where property of the Company or its
Subsidiaries is or may be located.
Section 1.14. Liability Solely Corporate.
No recourse shall be had for the payment of the principal of
(or premium, if any) or the interest on any Debt Securities or Coupons, or any
part thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement of this Indenture, against any incorporator,
or against any stockholder, officer or director, as such, past, present or
future, of the Company (or any incorporator, stockholder, officer or director
of any predecessor or successor corporation), either directly or through the
Company (or any such predecessor or successor corporation), whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Indenture and all the Debt Securities and Coupons are solely
corporate obligations, and that no personal liability whatsoever shall attach
to, or be incurred by, any such incorporator, stockholder, officer or director,
past, present or future, of the Company (or any incorporator, stockholder,
officer or director of any such predecessor or successor corporation), either
directly or indirectly through the Company or any such predecessor or successor
corporation, because of the indebtedness hereby authorized or under or by
reason of any of the obligations, covenants, promises or agreements contained
in this Indenture or in any of the Debt Securities or Coupons or to be implied
<PAGE> 24
18
herefrom or therefrom; and that any such personal liability is hereby expressly
waived and released as a condition of, and as part of the consideration for,
the execution of this Indenture and the issue of Debt Securities; provided,
however, that nothing herein or in the Debt Securities or Coupons contained
shall be taken to prevent recourse to and the enforcement of the liability, if
any, of any stockholder or subscriber to capital stock upon or in respect of
the shares of capital stock not fully paid.
ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally.
The Debt Securities and the Coupons, if any, of each series
shall be substantially in one of the forms (including global form) 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 and Coupons as
conclusively evidenced by their execution of such Debt Securities and Coupons.
If the form of a series of Debt Securities or Coupons (or any Global Note) 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 3.03 for the authentication and
delivery of such Debt Securities (or any such Global Note) or Coupons.
Unless otherwise specified as contemplated by Section 3.01,
Debt Securities in bearer form (other than in global form) shall have Coupons
attached.
The definitive Debt Securities and Coupons, if any, 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 and Coupons, as conclusively evidenced by their execution of such
Debt Securities and Coupons.
<PAGE> 25
19
Section 2.02. Form of Trustee's Certificate of Authentication.
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.
Dated: The First National Bank of Chicago,
as Trustee
By ___________________________
Authorized Signatory
Section 2.03. Securities in Global Form.
If any Debt Security of a series is issuable in global form,
the Global Note so issued 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 1.02.
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.
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued from time to time in one or
more series. There shall be established in or pursuant to a Board Resolution
and (subject to Section 3.03) set forth in an
<PAGE> 26
20
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Debt Securities of any series:
(1) 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);
(2) the limit, if any, upon 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
3.04, 3.05, 3.06, 11.06 or 13.07);
(3) the percentage of the principal amount at which the Debt
Securities 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 thereof or the method by
which such portion shall be determined;
(4) 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 of determination thereof) 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 and set forth in the Debt Securities of the series issued from
time to time);
(5) the rate or rates (or the method of determination thereof)
at which the Debt Securities of the series shall bear interest, if
any, and the dates from which such interest shall accrue (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 Interest Payment Dates on which such interest
shall be payable (or the method of determination thereof), and, in the
case of Registered Securities, the Regular Record Dates for the
interest payable on such Interest Payment Dates and, in the case of
Floating Rate Securities, the notice, if any, to Holders regarding the
determination of interest and the manner of giving such notice;
(6) the place or places where the principal of (and premium,
if any) and interest on Debt Securities of the series shall be
payable; 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
<PAGE> 27
21
manner provided in Section 3.07; the extent, if any, to which the
provisions of the last sentence of Section 12.01 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;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Debt Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of
the Holder and the period or periods within which or the dates on
which, the prices at which and the terms and conditions upon which
Debt Securities of the series shall be redeemed, repaid or purchased,
in whole or in part, pursuant to such obligation;
(8) the right, if any, of the Company to redeem the Debt
Securities 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 Debt Securities of the series may be
redeemed, if any, in whole or in part, at the option of the Company or
otherwise;
(9) if the coin or Currency in which the Debt Securities shall
be issuable is in Dollars, the denominations of such Debt Securities
if other than denominations of $1,000 and any integral multiple
thereof (except as provided in Section 3.04);
(10) 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 5.02;
(11) provisions, if any, for the defeasance of Debt Securities
of the series or certain of the Company's obligations with respect to
the Debt Securities;
(12) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are issued, whether Coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for
Registered Securities of the series, as provided in Section 3.05(b) or
otherwise and the circumstances under which and the place or places at
which any such exchanges, if permitted, may be made;
(13) whether provisions for payment of additional amounts or
tax redemptions shall apply and, if such provisions shall apply, such
provisions; and, if Bearer Securities of the series are to be issued,
whether a
<PAGE> 28
22
procedure other than that set forth in Section 3.04(b) shall apply
and, if so, such other procedure, and if the procedure set forth in
Section 3.04(b) shall apply, the forms of certifications to be
delivered under such procedure;
(14) if other than Dollars, the Foreign Currency or Currencies
or Currency unit in which Debt Securities of the series shall be
denominated or in which payment of the principal of (and/or premium,
if any) and/or interest on the Debt Securities of the series may be
made, and the particular provisions applicable thereto and, if
applicable, the amount of Debt Securities of the series which entitles
the Holder of a Debt Security of the series or its proxy to one vote
for purposes of Section 9.06;
(15) if the principal of (and premium, if any) or interest on
Debt Securities of the series are to be payable, at the election of
the Company or a Holder thereof, in a Currency other than that in
which the Debt Securities are denominated or payable without such
election, in addition to or in lieu of the provisions of Section 3.10,
the period or periods within which and the terms and conditions upon
which, such election may be made and the time and the manner of
determining the exchange rate or rates between the Currency or
Currencies in which the Debt Securities are denominated or payable
without such election and the Currency or Currencies in which the Debt
Securities are to be paid if such election is made;
(16) the date as of which any Debt Securities of the series
shall be dated, if other than as set forth in Section 3.03;
(17) if the amount of payments of principal of (and premium,
if any) or interest 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;
(18) if the Debt Securities of the series are denominated or
payable in a Foreign Currency, any other terms concerning the payment
of principal of (and premium, if any) or any interest on such Debt
Securities (including the Currency or Currencies of payment thereof);
(19) the designation of the original Currency Determination
Agent, if any;
(20) the applicable Overdue Rate, if any;
(21) if the Debt Securities of the series do not bear
interest, the applicable dates for purposes of Section 7.01;
<PAGE> 29
23
(22) any addition to, or modification or deletion of, any
Events of Default or covenants provided for with respect to Debt
Securities of the series;
(23) if Bearer Securities of the series are to be issued, (x)
whether interest in respect of any portion of a temporary Debt
Security in global form (representing all of the Outstanding Bearer
Securities of the series) payable in respect of any Interest Payment
Date prior to the exchange of such temporary Debt Security for
definitive Debt Securities of the series shall be paid to any clearing
organization with respect to the portion of such temporary Debt
Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date, (y) the terms upon which interests in such temporary
Debt Security in global form may be exchanged for interests in a
permanent Global Note or for definitive Debt Securities of the series
and the terms upon which interests in a permanent Global Note, if any,
may be exchanged for definitive Debt Securities of the series and (z)
the cities in which the Authorized Newspapers designated for the
purposes of giving notices to Holders are published;
(24) 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 if the Debt Securities of the series are
issuable only as Registered Securities, the manner in which and the
circumstances under which Global Notes representing Debt Securities of
the series may be exchanged for Registered Securities in definitive
form, if other than, or in addition to, the manner and circumstances
specified in Section 3.04(c);
(25) the designation, if any, of the U.S. Depositary; and the
designation of any trustees (other than the Trustee), depositaries,
Authenticating Agents, Paying Agents, Security Registrars, or any
other agents with respect to the Debt Securities of such series;
(26) if the Debt Securities of such series are to be issuable
in definitive form (whether upon original issuance or upon exchange of
a temporary Debt Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions; and
(27) any other terms of the series (which other terms shall
not be inconsistent with the provisions of this Indenture).
<PAGE> 30
24
All Debt Securities of any one series and Coupons, if any,
shall be substantially identical to all other debt securities of such series
except as to denomination, rate of interest, Stated Maturity and the date from
which interest, if any, shall accrue, which, as set forth above, may be
determined by the Company from time to time as to Debt Securities of a series
if so provided in or established pursuant to the authority granted in a Board
Resolution or in any such indenture supplemental hereto, and except as may
otherwise be provided in or pursuant to such Board Resolution and (subject to
Section 3.03) 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.
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 3.02. Denominations.
In the absence of any specification pursuant to Section 3.01
with respect to the Debt Securities of any series, the Debt Securities of such
series shall be issuable only as Registered Securities in denominations of
$1,000 and any integral multiple thereof and shall be payable only in Dollars.
Section 3.03. Execution, Authentication, Delivery and Dating.
The Debt Securities and the Coupons, if any, of any series
shall be executed on behalf of the Company by its Chairman, a Vice Chairman,
its President, one of its Executive 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 and Coupons 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 and Coupons or did not hold such offices at the date of
such Debt Securities and Coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debt Securities, with
appropriate Coupons, if any, of any series, executed by the Company, to the
Trustee for authentication,
<PAGE> 31
25
together with a Company Order for the authentication and delivery of such Debt
Securities and Coupons and the Trustee in accordance with the Company Order
shall authenticate and deliver such Debt Securities and Coupons; provided,
however, that, in connection with its sale during the "restricted period" (as
defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury
Regulations), no Bearer Security shall be mailed or otherwise delivered to any
location in the United States; and provided, further, that a Bearer Security
(other than a temporary Global Note in bearer form) may be delivered outside
the United States in connection with its original issuance only if the Person
entitled to receive such Bearer Security shall have furnished to the Euro-clear
Operator or to CEDEL a certificate substantially in the form set forth in
Exhibit A to this Indenture and if the Euro-clear Operator or CEDEL has
furnished the Trustee a certificate substantially in the form set forth in
Exhibit B. 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 and other
matters which are subject to variation, 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 3.04, the notation by the Common
Depositary 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. Except as permitted
by Section 3.06 or 3.07, the Trustee shall not authenticate and deliver any
Bearer Security unless all Coupons for interest then matured have been detached
and cancelled.
The Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon, prior to the
authentication and delivery of the Debt Securities and Coupons of such series,
(i) the supplemental indenture or the Board Resolution by or pursuant to which
the form and terms of such Debt Securities and Coupons have been approved, (ii)
the certificates and opinions required pursuant to Section 1.02 and (iii) one
or more Opinions of Counsel substantially to the effect that:
(1) all instruments furnished by the Company to the
Trustee in connection with the authentication and delivery of such
Debt Securities and Coupons conform to the requirements of this
Indenture and constitute sufficient authority hereunder for the
Trustee to authenticate and deliver such Debt Securities and Coupons;
<PAGE> 32
26
(2) the forms and terms of such Debt Securities and
Coupons have been established in conformity with the provisions of
this Indenture;
(3) in the event that the forms or terms of such Debt
Securities and Coupons have been established in a supplemental
indenture, the execution and delivery of such supplemental indenture
has been duly authorized by all necessary corporate action of the
Company, such supplemental indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, is a valid and binding obligation
enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(4) the execution and delivery of such Debt Securities
and Coupons have been duly authorized by all necessary corporate
action of the Company and such Debt Securities and Coupons have been
duly executed by the Company and, assuming due authentication by the
Trustee and delivery by the Company, are valid and binding obligations
enforceable against the Company in accordance with their terms,
entitled to the benefit of the Indenture, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and subject to such other exceptions as counsel
shall reasonably request and as to which the Trustee shall not
reasonably object; and
(5) to the best of such counsel's knowledge, all
governmental consents, authorizations and approvals which are
required for the execution and delivery of the Indenture and the Debt
Securities under all applicable Louisiana laws, if any, have been
received other than such as may be required by the securities or blue
sky laws of the various states in connection with the offer and sale
of the Debt Securities.
For purposes of this opinion, such counsel may rely as to
factual matters upon certificates or written statements from officers or other
appropriate representatives of the Company or upon certificates of public
officials and such opinion may contain assumptions, limitations, exceptions and
restrictions which are reasonably satisfactory to the Trustee and its counsel.
The Trustee shall not be required to authenticate such Debt
Securities and Coupons if the issuance of such Debt Securities and Coupons
pursuant to this Indenture will affect the
<PAGE> 33
27
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 Registered Security shall be dated the date of its
authentication. Each Bearer Security (including any temporary or permanent or
other definitive Bearer Security in global form) shall be dated as of the date
of original issuance of the first Debt Security of such series to be issued,
except as otherwise provided pursuant to Section 3.01 with respect to the
Bearer Securities of any series.
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 3.08 together with a written statement
(which need not comply with Section 1.02) 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 3.04. Temporary Debt Securities; Exchange of
Temporary Global Notes for Definitive Bearer Securities; Global Notes
Representing Registered Securities.
(a) Pending the preparation of definitive Registered
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Registered Securities which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination for Registered Securities of such series,
substantially of the tenor of the definitive Registered Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Registered
Securities may determine, as conclusively evidenced by their execution of such
Registered Securities. Every such temporary Registered 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 effect, as the definitive Registered Securities in lieu of which they are
issued. In the case of any series issuable as Bearer Securities, such
temporary Debt Securities may be in
<PAGE> 34
28
global form, representing such of the Outstanding Debt Securities of such
series as shall be specified therein.
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 3.05
in connection with a transfer. Upon surrender for cancellation of any one or
more temporary Debt Securities of any series (accompanied by any unmatured
Coupons), 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; provided, however, that no definitive
Bearer Security shall be delivered in exchange for a temporary Registered
Security; and provided, further, that a definitive Bearer Security (including a
permanent Bearer Security in global form) shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set forth in
Section 3.03. Until so exchanged, the temporary Registered Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Registered Securities of such series.
(b) Unless otherwise specified pursuant to Section 3.01,
all Bearer Securities of a series shall be initially issued in the form of a
single temporary Bearer Security in global form (a "temporary Global Note").
The Company shall execute, and upon Company Order the Trustee shall
authenticate, any temporary Global Note and any permanent Bearer Security in
global form (as described below, a "permanent Global Note") upon the same
conditions and in substantially the same manner, and with the same effect, as
definitive Bearer Securities, and the temporary or permanent Global Note, as
the case may be, shall, unless otherwise specified therein, be delivered by the
Trustee to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of the Euro-clear Operator or CEDEL, as the case
may be, for credit to the account of the Company (in the case of sales of
Bearer Securities by the Company directly to investors) or the managing
underwriter (in the case of sales of Bearer Securities by the Company to
underwriters) or such other accounts as the Company or the managing
underwriter, respectively, may direct.
<PAGE> 35
29
On or after the date specified in or determined pursuant to
the terms of any temporary Global Note which (subject to any applicable laws
and regulations) shall be at least 40 days after the issue date of a temporary
Global Note (the "Exchange Date"), the Debt Securities represented by such
temporary Global Note may be exchanged for definitive Debt Securities (subject
to the second succeeding paragraph) or Debt Securities to be represented
thereafter by one or more permanent Global Notes in definitive form without
interest coupons. On or after the Exchange Date such temporary Global Note
shall be surrendered by the Common Depositary to the Trustee (or such other
agent as is specified for the purpose pursuant to Section 3.01), as the
Company's agent for such purpose at such place specified outside the United
States pursuant to Section 3.01 and following such surrender, the Trustee shall
(1) endorse the temporary Global Note to reflect the reduction of its principal
amount by an equal aggregate principal amount of such Debt Security, (2)
endorse the applicable permanent Global Note, if any, to reflect the initial
amount, or an increase in the amount of Debt Securities represented thereby,
(3) manually authenticate such definitive Debt Securities (including any
permanent Global Note), (4) deliver such definitive Debt Securities to the
Holder thereof or, if such definitive Debt Security is a permanent Global Note,
deliver such permanent Global Note to the Common Depositary to be held outside
the United States for the accounts of the Euro-clear Operator or CEDEL, as the
case may be, for credit to the respective accounts at Euro-clear Operator or
CEDEL, as the case may be, designated by or on behalf of the beneficial owners
of such Debt Securities (or to such other accounts as they may direct) and (5)
redeliver such temporary Global Note to the Common Depositary, unless such
temporary Global Note shall have been cancelled in accordance with Section 3.08
hereof; provided, however, that, unless otherwise specified in such temporary
Global Note, upon such presentation by the Common Depositary, such temporary
Global Note shall be accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by the Euro-clear Operator, as to the portion of
such temporary Global Note held for its account then to be exchanged for
definitive Debt Securities (including any permanent Global Note), and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL,
as to the portion of such temporary Global Note held for its account then to be
exchanged for definitive Debt Securities (including any permanent Global Note),
each substantially in the form set forth in Exhibit B to this Indenture. Each
certificate substantially in the form of Exhibit B hereto of the Euro-clear
Operator or CEDEL, as the case may be, shall be based on certificates of the
account holders listed in the records of the Euro-clear Operator or CEDEL, as
the case may be, as being entitled to all or any portion of the applicable
temporary Global Note. An account holder of the Euro-clear Operator or CEDEL,
as the case may be, desiring to effect the exchange of an interest in a
temporary Global Note for an interest in definitive Debt Securities (including
any permanent Global Note) shall instruct the Euro-clear Operator or CEDEL, as
<PAGE> 36
30
the case may be, to request such exchange on its behalf and shall deliver to
the Euro-clear Operator or CEDEL, as the case may be, a certificate
substantially in the form of Exhibit A hereto and dated no earlier than 10 days
prior to the Exchange Date. Until so exchanged, temporary Global Notes shall
in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities (including any permanent Global Note) of the same
series authenticated and delivered hereunder, except as to payment of interest,
if any.
The delivery to the Company, its agent or the Trustee by the
Euro-clear Operator or CEDEL of any certificate substantially in the form of
Exhibit B hereto may be relied upon by the Company, its agent and the Trustee
as conclusive evidence that a corresponding certificate or certificates has or
have been delivered to the Euro-clear Operator or CEDEL, as the case may be,
pursuant to the terms of this Indenture.
On or prior to the Exchange Date, the Company shall deliver to
the Trustee definitive Debt Securities in an aggregate principal amount equal
to the principal amount of such temporary Global Note, executed by the Company.
At any time, on or after the Exchange Date, upon 30 days' notice to the Trustee
by the Euro-clear Operator or CEDEL, as the case may be, acting at the request
of or on behalf of the beneficial owner, a Debt Security represented by a
temporary Global Note or a permanent Global Note, as the case may be, may be
exchanged, in whole or from time to time in part, for definitive Debt
Securities without charge and the Trustee shall authenticate and deliver, in
exchange for each portion of such temporary Global Note or such permanent
Global Note, an equal aggregate principal amount of definitive Debt Securities
of the same series of authorized denominations and of a like Stated Maturity
and with like terms and conditions, as the portion of such temporary Global
Note or such permanent Global Note to be exchanged, which, unless the Debt
Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, as contemplated by Section 3.01, shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as
shall be specified by the beneficial owner thereof; provided, however, that
definitive Bearer Securities shall be delivered in exchange for a portion of
the temporary Global Note or the permanent Global Note only in compliance with
the requirements of the second preceding paragraph. On or prior to the
forty-fifth day following receipt by the Trustee of such notice with respect to
a Debt Security, or, if such day is not a Business Day, the next succeeding
Business Day, the temporary Global Note or the permanent Global Note, as the
case may be, shall be surrendered by the Common Depositary to the Trustee, as
the Company's agent for such purpose, to be exchanged, in whole or from time to
time in part, for definitive Debt Securities without charge following such
surrender, upon the request of the Euro-clear Operator or CEDEL, as the case
may be, and the Trustee shall (1) endorse the applicable temporary Global Note
or the permanent Global Note to
<PAGE> 37
31
reflect the reduction of its principal amount by the aggregate principal amount
of such Debt Security, (2) cause the terms of such Debt Security and Coupons,
if any, to be entered on a definitive Debt Security, (3) manually authenticate
such definitive Debt Security, and (4) if a Bearer Security is to be delivered,
deliver such definitive Debt Security outside the United States to the
Euro-clear Operator or CEDEL, as the case may be, for or on behalf of the
beneficial owner thereof, in exchange for a portion of such temporary Global
Note or the permanent Global Note.
Unless otherwise specified in such temporary Global Note or
the permanent Global Note, any such exchange shall be made free of charge to
the beneficial owners of such temporary Global Note or the permanent Global
Note, except that a Person receiving definitive Debt Securities must bear the
cost of insurance, postage, transportation and the like in the event that such
Person does not take delivery of such definitive Debt Securities in person at
the offices of the Euro-clear Operator or CEDEL. Definitive Debt Securities in
bearer form to be delivered in exchange for any portion of a temporary Global
Note or the permanent Global Note shall be delivered only outside the United
States. Notwithstanding the foregoing, in the event of redemption or
acceleration of all or any part of a temporary Global Note prior to the
Exchange Date, a permanent Global Note or definitive Bearer Securities, as the
case may be, will not be issuable in respect of such temporary Global Note or
such portion thereof, and payment thereon will instead be made as provided in
such temporary Global Note.
Until exchanged in full as hereinabove provided, any temporary
Global Note or the permanent Global Note shall in all respects be entitled to
the same benefits under this Indenture as definitive Debt Securities of the
same series and tenor authenticated and delivered hereunder, except that,
unless otherwise specified as contemplated by Section 3.01, interest payable on
such temporary Global Note on an Interest Payment Date for Debt Securities of
such series occurring prior to the applicable Exchange Date shall be payable to
the Euro-clear Operator or CEDEL on such Interest Payment Date upon delivery by
the Euro-clear Operator or CEDEL to the Trustee of a certificate or
certificates substantially in the form set forth in Exhibit B to this
Indenture, for credit without further interest on or after such Interest
Payment Date to the respective accounts of the Persons who are the beneficial
owners of such temporary Global Note on such Interest Payment Date and who have
each delivered to the Euro-clear Operator or CEDEL, as the case may be, a
certificate substantially in the form set forth in Exhibit A to this Indenture.
Any definitive Bearer Security authenticated and delivered by
the Trustee in exchange for a portion of a temporary Global Note or the
permanent Global Note shall not bear a coupon for any interest which shall
theretofore have been duly paid by
<PAGE> 38
32
the Trustee to the Euro-clear Operator or CEDEL, or by the Company to the
Trustee in accordance with the provisions of this Section 3.04.
With respect to Exhibits A and B to this Indenture, the
Company may, in its discretion and if required or desirable under applicable
law, substitute one or more other forms of such Exhibits for such Exhibits,
eliminate the requirement that any or all certificates be provided, or change
the time that any certificate may be required, provided that such substitute
form or forms or notice of elimination or change of such certification
requirement have theretofore been delivered to the Trustee with a Company
Request and such form or forms, elimination or change is reasonably acceptable
to the Trustee.
(c) If the Company shall establish pursuant to Section
3.01 that the Registered 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 3.03 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 to the following effect: "This Debt Security may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary, unless and
until this Debt Security is exchanged in whole or in part for Debt Securities
in definitive form."
Notwithstanding any other provision of this Section or Section
3.05, unless and until it is exchanged in whole or in part for Registered
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,
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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, Registered Securities of such series in definitive
form 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.
The Company may at any time and in its sole discretion
determine that the Registered 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, Registered 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 Registered 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, Registered 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 3.01 with
respect to Registered Securities of a series, the U.S. Depositary for such
series of Registered Securities may surrender a Global Note for such series of
Debt Securities in exchange in whole or in part for Registered 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
Registered 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
<PAGE> 40
34
principal amount of the surrendered Global Note and the aggregate
principal amount of Registered Securities delivered to Holders
thereof.
Upon the exchange of a Global Note for Registered 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 3.05. 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 Registered Securities and of transfers and
exchanges of Registered Securities. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Registered Securities and registering
transfers and exchanges of Registered Securities as herein provided; provided,
however, that the Company may appoint co-Security Registrars.
Upon surrender for registration of transfer of any Registered
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 Registered
Securities of the same series of like aggregate principal amount of such
denominations as are authorized for Registered Securities of such series and of
a like Stated Maturity and with like terms and conditions.
Except as otherwise provided in Section 3.04 and this Section
3.05, at the option of the Holder, Registered Securities of any series may be
exchanged for other Registered 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 Registered Securities to be exchanged at such
office or agency. Whenever any Registered Securities are surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive.
(b) If and to the extent specified pursuant to Section
3.01, the provisions of this Section 3.05(b) shall be applicable
<PAGE> 41
35
to Debt Securities of any series which are Bearer Securities. At the option of
the Holder thereof, to the extent permitted by law, any Bearer Security of any
series which by its terms is registrable as to principal and interest may be
exchanged for a Registered Security of such series of like aggregate principal
amount and of a like Stated Maturity and with like terms and conditions upon
surrender of such Bearer Security at the Corporate Trust Office or at any other
office or agency of the Company designated pursuant to Section 3.01 for the
purpose of making any such exchanges. Any Coupon Security surrendered for
exchange shall be surrendered with all unmatured Coupons and any matured
Coupons in default attached thereto. If the Holder of a Bearer Security is
unable to produce any such unmatured Coupon or Coupons or matured Coupon or
Coupons in default, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company in an amount equal to
the face amount of such missing Coupon or Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Bearer Security shall surrender to any Paying Agent any such missing Coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; provided, however, that except
as otherwise provided in Section 12.03, interest represented by Coupons shall
be payable only upon presentation and surrender of those Coupons at an office
or agency located outside the United States. Notwithstanding the foregoing, in
case a Bearer Security of any series is surrendered at any such office or
agency in exchange for a Registered Security of the same series and of a like
Stated Maturity and with like terms and conditions after the close of business
at such office or agency on (i) any Regular Record Date and before the opening
of business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business at such office
or agency on the related proposed date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be (or, if
such Coupon is so surrendered with such Bearer Security, such Coupon shall be
returned to the Person so surrendering the Bearer Security), and interest or
Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
the Registered Security issued in exchange for such Bearer Security, but will
be payable only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture. The Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Security or Securities which the
Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer
Securities for Registered Securities will be subject to the
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36
provisions of United States income tax laws and regulations applicable to Debt
Securities in effect at the time of such exchange.
(c) Except as otherwise specified pursuant to Section
3.01, in no event may Registered Securities, including Registered Securities
received in exchange for Bearer Securities, be exchanged for Bearer Securities.
(d) 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 Registered 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 attorney duly authorized in writing.
No service charge will be made for any transfer or exchange of
Debt Securities except as provided in Section 3.04(b) or 3.06. 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 13.03 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 3.06. Mutilated, Destroyed, Lost and Stolen Debt
Securities.
If (i) any mutilated Debt Security or any mutilated Coupon
with the Coupon Security to which it appertains (and all unmatured Coupons
attached thereto) is surrendered to the Trustee, or (ii) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Debt Security or any Coupon, 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 receives notice that such Debt
<PAGE> 43
37
Security or Coupon 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 or in exchange for the Coupon Security to which such
mutilated, destroyed, lost or stolen Coupon appertained, 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, and,
in the case of a Coupon Security, with such Coupons attached thereto that
neither gain nor loss in interest shall result from such exchange or
substitution.
In case any such mutilated, destroyed, lost or stolen Debt
Security or Coupon 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 or Coupon in accordance with its terms;
provided, however, that principal of (and premium, if any) and any interest on
Bearer Securities shall, except as otherwise provided in Section 12.03, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 3.01 or except as
otherwise provided in this Section 3.06, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the Coupons
appertaining thereto.
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 or Coupon 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 or Coupon 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 or Coupons 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 or Coupons.
Section 3.07. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Registered 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 Registered Security (or one or more
Predecessor Securities)
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38
is registered at the close of business on the Regular Record Date for such
interest notwithstanding the cancellation of such Registered Security upon any
transfer or exchange subsequent to the Regular Record Date. Unless otherwise
specified as contemplated by Section 3.01 with respect to the Debt Securities
of any series, payment of interest on Registered Securities shall be made at
the place or places specified pursuant to Section 3.01 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 3.01, by wire transfer to an account designated by the Registered
Holder.
(b) Interest on any Coupon Security which is payable and
is punctually paid or duly provided for on any Interest Payment Date shall be
paid to the Holder of the Coupon which has matured on such Interest Payment
Date upon surrender of such Coupon on such Interest Payment Date at an office
or agency of the Company in a Place of Payment located outside the United
States specified pursuant to Section 3.01.
Interest on any Bearer Security (other than a Coupon Security)
which is payable and is punctually paid or duly provided for on any Interest
Payment Date shall be paid to the Holder of the Bearer Security upon
presentation of such Bearer Security and notation thereon on such Interest
Payment Date at the principal London office of the Trustee or at such other
Place of Payment outside the United States specified pursuant to Section 3.01.
Unless otherwise specified pursuant to Section 3.01, at the
direction of the Holder of any Bearer Security or Coupon payable in Dollars,
payment on such Bearer Security or Coupon will be made by check or, if
agreeable to the Trustee, by wire transfer to a Dollar account maintained by
such Holder outside the United States. If such payment at the offices of all
Paying Agents outside the United States becomes illegal or is effectively
precluded because of the imposition of exchange controls or similar
restrictions on the full payment or receipt of such amounts in Dollars, the
Company will appoint an office or agent in the United States at which such
payment may be made. Unless otherwise specified pursuant to Section 3.01, at
the direction of the Holder of any Bearer Security or Coupon payable in a
Foreign Currency, payment on such Bearer Security or Coupon will be made by a
check drawn on a bank outside the United States or by wire transfer to an
appropriate account maintained by such Holder outside the United States.
Except as provided in this paragraph, no payment on any Bearer Security or
Coupon will be made by mail to an address in the United States or by wire
transfer to an account in the United States.
(c) 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, if such
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39
Debt Security is a Registered Security, 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 Registered
Securities (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall, at least 25 days prior to the date of the proposed
payment, notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Registered Security and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money in the Currency or
Currency unit in which the Debt Securities of such series are payable
(except as otherwise specified pursuant to Section 3.01 or 3.10) equal
to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which date shall be not more
than 20 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to the
Holders of such Registered Securities at their addresses as they
appear in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Registered 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 Registered Securities in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Registered 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
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proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Trustee.
(d) Any Defaulted Interest payable in respect of Bearer
Securities of any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities of
such series, and notice of the payment date therefor shall be given by the
Trustee, in the name and at the expense of the Company, in the manner provided
in Section 1.05 not more than 20 days and not less than 10 days prior to the
date of the proposed payment.
(e) Subject to the foregoing provisions of this Section,
each Debt Security delivered under this Indenture upon transfer of or 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 3.08. Cancellation.
Unless otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, all Debt Securities surrendered for payment,
redemption, transfer, exchange or credit against any sinking fund and all
Coupons surrendered for payment or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee. All Registered Securities
and matured Coupons so delivered shall be promptly cancelled by the Trustee.
All Bearer Securities and unmatured Coupons so delivered shall be held by the
Trustee and, upon instruction by the Company Order, shall be cancelled or held
for reissuance. Bearer Securities and unmatured Coupons held for reissuance
may be reissued only in exchange for Bearer Securities of the same series and
of like Stated Maturity and with like terms and conditions pursuant to Section
3.05 or in replacement of mutilated, lost, stolen or destroyed Bearer
Securities of the same series and of like Stated Maturity and with like terms
and conditions or the related Coupons pursuant to Section 3.06. All Bearer
Securities and unmatured Coupons held by the Trustee pending such cancellation
or reissuance shall be deemed to be delivered for cancellation for all purposes
of this Indenture and the Securities. The Company may at any time deliver to
the Trustee for cancellation any Debt Securities or Coupons 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 or Coupons so delivered shall be promptly cancelled by the Trustee.
No Debt Securities or Coupons shall be authenticated in lieu of or in exchange
for any Debt Securities or Coupons cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Debt Securities
and Coupons held by the Trustee shall be destroyed by the Trustee in accordance
with its
<PAGE> 47
41
customary procedures and a certificate of destrubtion shall be delivered to the
Company upon Company Request. The acquisition of any Debt Securities or
Coupons by the Company shall not operate as a redemption or satisfaction of the
indebtedness represented thereby unless and until such Debt Securities or
Coupons are surrendered to the Trustee for cancellation. In the case of any
temporary Global Note which shall be destroyed if the entire aggregate
principal amount of the Debt Securities represented thereby has been exchanged,
the certificate of destruction shall state that all certificates required
pursuant to Section 3.04 hereof and substantially in the form of Exhibit B
hereto, to be given by the Euro-clear Operator or CEDEL, have been duly
presented to the Trustee by the Euro-clear Operator or CEDEL, as the case may
be. Permanent Global Notes shall not be destroyed until exchanged in full for
definitive Debt Securities or until payment thereon is made in full.
Section 3.09. Computation of Interest.
Except as otherwise specified pursuant to Section 3.01 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.
Section 3.10. Currency of Payments in Respect of Debt
Securities.
(a) Except as otherwise specified pursuant to Section
3.01 for Bearer Securities of any series, payment of the principal of (and
premium, if any) and interest on Bearer Securities of such series denominated
in any Currency will be made in such Currency.
(b) With respect to Registered Securities of any series
not permitting the election provided for in paragraph (c) below or the Holders
of which have not made the election provided for in paragraph (c) below, except
as provided in paragraph (e) below, payment of the principal of (and premium,
if any) and any interest on any Registered Security of such series will be made
in the Currency in which such Registered Security is payable.
(c) It may be provided pursuant to Section 3.01 with
respect to the Registered Securities of any series that Holders shall have the
option, subject to paragraphs (e) and (f) below, to receive payments of
principal of (and premium, if any) and any interest on such Registered
Securities in any of the Currencies which may be designated for such election
by delivering to the Trustee a written election, to be in form and substance
reasonably satisfactory to the Trustee, not later than the close of business on
the Election Date immediately preceding the applicable payment date. If a
Holder so elects to receive such payments in any such Currency, such election
will remain in effect for such Holder or any transferee of such Holder until
changed by such Holder or such transferee by written notice to
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42
the Trustee (but any such change must be made not later than the close of
business on the Election Date immediately preceding the next payment date to be
effective for the payment to be made on such payment date and no such change or
election may be made with respect to payments to be made on any Registered
Security of such series with respect to which an Event of Default has occurred
or notice of redemption has been given by the Company pursuant to Article
Thirteen). Any Holder of any such Registered Security who shall not have
delivered any such election to the Trustee by the close of business on the
applicable Election Date will be paid the amount due on the applicable payment
date in the relevant Currency as provided in paragraph (b) of this Section
3.10.
(d) If the election referred to in paragraph (c) above
has been provided for pursuant to Section 3.01, then not later than the fourth
Business Day after the Election Date for each payment date, the Trustee will
deliver to the Company a written notice specifying, in the Currency in which
each series of the Registered Securities is payable, the respective aggregate
amounts of principal of (and premium, if any) and any interest on the
Registered Securities to be paid on such payment date, specifying the amounts
so payable in respect of the Registered Securities as to which the Holders of
Registered Securities denominated in any Currency shall have elected to be paid
in another Currency as provided in paragraph (c) above. If the election
referred to in paragraph (c) above has been provided for pursuant to Section
3.01 and if at least one Holder has made such election, then, on the second
Business Day preceding each payment date, the Company will deliver to the
Trustee an Exchange Rate Officer's Certificate in respect of the Currency
payments to be made on such payment date. The Currency amount receivable by
Holders of Registered Securities who have elected payment in a Currency as
provided in paragraph (c) above shall be determined by the Company on the basis
of the applicable Market Exchange Rate in effect on the third Business Day (the
"Valuation Date") immediately preceding each payment date.
(e) If a Conversion Event occurs with respect to a
Foreign Currency, the ECU or any other Currency unit in which any of the Debt
Securities are denominated or payable other than pursuant to an election
provided for pursuant to paragraph (c) above, then with respect to each date
for the payment of principal of (and premium, if any) and any interest on the
applicable Debt Securities denominated or payable in such Foreign Currency, the
ECU or such other Currency unit occurring after the last date on which such
Foreign Currency, the ECU or such other Currency unit was used (the "Conversion
Date"), the Dollar shall be the Currency of payment for use on each such
payment date. The Dollar amount to be paid by the Company to the Trustee and
by the Trustee or any Paying Agent to the Holders of such Debt Securities with
respect to such payment date shall be the Dollar Equivalent of the Foreign
Currency or, in the case of a Currency unit, the Dollar Equivalent of the
Currency Unit, in each case as
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43
determined by the Currency Determination Agent, if any, or, if there shall not
be a Currency Determination Agent, then by the Trustee, in the manner provided
in paragraph (g) or (h) below.
(f) If the Holder of a Registered Security denominated in
any Currency shall have elected to be paid in another Currency as provided in
paragraph (c) above, and a Conversion Event occurs with respect to such elected
Currency, such Holder shall receive payment in the Currency in which payment
would have been made in the absence of such election. If a Conversion Event
occurs with respect to the Currency in which payment would have been made in
the absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (e) of this Section 3.10.
(g) The "Dollar Equivalent of the Foreign Currency" shall
be determined by the Currency Determination Agent, if any, or, if there shall
not be a Currency Determination Agent, then by the Trustee, and shall be
obtained for each subsequent payment date by converting the specified Foreign
Currency into Dollars at the Market Exchange Rate on the Conversion Date.
(h) The "Dollar Equivalent of the Currency Unit" shall be
determined by the Currency Determination Agent, if any, or, if there shall not
be a Currency Determination Agent, then by the Trustee, and subject to the
provisions of paragraph (i) below, shall be the sum of each amount obtained by
converting the Specified Amount of each Component Currency into Dollars at the
Market Exchange Rate for such Component Currency on the Valuation Date with
respect to each payment.
(i) For purposes of this Section 3.10 the following terms
shall have the following meanings:
A "Component Currency" shall mean any Currency which, on the
Conversion Date, was a component Currency of the relevant Currency
unit, including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the
number of units of such Component Currency or fractions thereof which
were represented in the relevant Currency unit, including, but not
limited to, the ECU, on the Conversion Date. If after the Conversion
Date the official unit of any Component Currency is altered by way of
combination or subdivision, the Specified Amount of such Component
Currency shall be divided or multiplied in the same proportion. If
after the Conversion Date two or more Component Currencies are
consolidated into a single Currency, the respective Specified Amounts
of such Component Currencies shall be replaced by an amount in such
single Currency equal to the sum of the respective Specified Amounts
of such consolidated Component Currencies expressed in such single
Currency, and such amount shall thereafter be a Specified Amount and
such single Currency shall thereafter
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44
be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more Currencies, the Specified
Amount of such Component Currency shall be replaced by amounts of such
two or more Currencies with appropriate Dollar equivalents at the
Market Exchange Rate on the date of such replacement equal to the
Dollar equivalent of the Specified Amount of such former Component
Currency at the Market Exchange Rate on such date, and such amounts
shall thereafter be Specified Amounts and such Currencies shall
thereafter be Component Currencies. If after the Conversion Date of
the relevant Currency unit, including but not limited to, the ECU, a
Conversion Event (other than any event referred to above in this
definition of "Specified Amount") occurs with respect to any Component
Currency of such Currency unit, the Specified Amount of such Component
Currency shall, for purposes of calculating the Dollar Equivalent of
the Currency Unit, be converted into Dollars at the Market Exchange
Rate in effect on the Conversion Date of such Component Currency.
"Election Date" shall mean the record date with respect to any
payment date, and with respect to the Maturity shall mean the record
date (if within 16 or fewer days prior to the Maturity) immediately
preceding the Maturity, and with respect to any series of Debt
Securities whose record date immediately preceding the Maturity is
more than 16 days prior to the Maturity or any series of Debt
Securities for which no record dates are provided with respect to
interest payments, shall mean the date which is 16 days prior to the
Maturity.
(j) All decisions and determinations of the Trustee or
the Currency Determination Agent, if any, regarding the Dollar Equivalent of
the Foreign Currency, the Dollar Equivalent of the Currency Unit and the Market
Exchange Rate shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Company and all Holders of the Debt Securities denominated or payable in the
relevant Currency. In the event of a Conversion Event with respect to a
Foreign Currency, the Company, after learning thereof, will immediately give
written notice thereof to the Trustee (and the Trustee will promptly thereafter
give notice in the manner provided in Section 1.05 to the Holders) specifying
the Conversion Date. In the event of a Conversion Event with respect to the
ECU or any other Currency unit in which Debt Securities are denominated or
payable, the Company, after learning thereof, will immediately give written
notice thereof to the Trustee (and the Trustee will promptly thereafter give
written notice in the manner provided in Section 1.05 to the Holders)
specifying the Conversion Date and the Specified Amount of each Component
Currency on the Conversion Date. In the event of any subsequent change in any
Component Currency as set forth in the definition of Specified Amount above,
the Company, after learning thereof, will similarly give written notice to the
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Trustee. The Trustee shall be fully justified and protected in relying and
acting upon information received by it from the Company and the Currency
Determination Agent, if any, and may, notwithstanding any other provision of
this Indenture, conclusively assume that no Conversion Event or other event of
which it is entitled to notice hereunder has occurred unless it receives
written notice thereof as provided herein, and shall not otherwise have any
duty or obligation to determine such information independently.
(k) For purposes of any provision of the Indenture where
the Holders of Outstanding Debt Securities may perform an Act which requires
that a specified percentage of the Outstanding Debt Securities of all series
perform such Act and for purposes of any decision or determination by the
Trustee of amounts due and unpaid for the principal (and premium, if any) and
interest on the Debt Securities of all series in respect of which moneys are to
be disbursed ratably, the principal of (and premium, if any) and interest on
the Outstanding Debt Securities denominated in a Foreign Currency will be the
amount in Dollars based upon the Market Exchange Rate for Debt Securities of
such series, as of the date for determining whether the Holders entitled to
perform such Act have performed it, or as of the Business Day immediately prior
to the date of such decision or determination by the Trustee, as the case may
be.
Section 3.11. Judgments.
If for the purpose of obtaining a judgment in any court with
respect to any obligation of the Company hereunder or under any Debt Security,
it shall become necessary to convert into any other Currency any amount in the
Currency due hereunder or under such Debt Security, then such conversion shall
be made at the Market Exchange Rate as in effect on the date the Company shall
make payment to any Person in satisfaction of such judgment. If pursuant to
any such judgment, conversion shall be made on a date other than the date
payment is made and there shall occur a change between such Market Exchange
Rate and the Market Exchange Rate as in effect on the date of payment, the
Company agrees to pay such additional amounts (if any) as may be necessary to
ensure that the amount paid is equal to the amount in such other Currency
which, when converted at the Market Exchange Rate as in effect on the date of
payment or distribution, is the amount then due hereunder or under such Debt
Security. Any amount due from the Company under this Section 3.11 shall be due
as a separate debt and is not to be affected by or merged into any judgment
being obtained for any other sums due hereunder or in respect of any Debt
Security. In no event, however, shall the Company be required to pay more in
the Currency or Currency unit due hereunder or under such Debt Security at the
Market Exchange Rate as in effect when payment is made than the amount of
Currency stated to be due hereunder or under such Debt Security so that in any
event the Company's obligations hereunder or under such Debt Security will be
effectively maintained as obligations in such
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Currency, and the Company shall be entitled to withhold (or be reimbursed for,
as the case may be) any excess of the amount actually realized upon any such
conversion over the amount due and payable on the date of payment or
distribution.
Section 3.12. Exchange Upon Default.
If default is made in the payments referred to in Section
12.01, the Company hereby undertakes that upon presentation and surrender of a
permanent Global Note to the Trustee (or to any other Person or at any other
address as the Company may designate in writing), on any Business Day on or
after the maturity date thereof the Company will issue and the Trustee will
authenticate and deliver to the bearer of such permanent Global Note duly
executed and authenticated definitive Debt Securities with the same issue date
and maturity date as set out in such permanent Global Note.
Section 3.13. CUSIP Numbers.
The Company in issuing the Debt Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Debt Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debt Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
This Indenture, with respect to the Debt Securities of any
series (if all series issued under this Indenture are not to be affected),
shall upon Company Request, cease to be of further effect (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 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
(1) either
(A) all Debt Securities and the Coupons, if any, of such
series theretofore authenticated and delivered (other than (i) Debt
Securities and Coupons of such series which
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47
have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.06, (ii) Coupons appertaining to Bearer
Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or has
been waived under Section 3.05, (iii) Coupons appertaining to Bearer
Securities called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 13.06, and (iv) Debt Securities and Coupons 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
12.04) have been delivered to the Trustee for cancellation; or
(B) all Debt Securities and the Coupons, if any, 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,
and the Company, in the case of (i), (ii) or (iii) of this subclause
(B), has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount in the
Currency in which such Debt Securities are denominated (except as
otherwise provided pursuant to Section 3.01 or 3.10) 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;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating
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48
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
(4) the Company has delivered to the Trustee an Opinion
of Counsel or a ruling by the Internal Revenue Service to the effect
that such deposit and discharge will not cause Holders of the Debt
Securities of the series to recognize income, gain or loss for Federal
income tax purposes.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations
of the Trustee to any Authenticating Agent under Section 6.14, the obligations
of the Company under Section 12.01, and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.02 and the last paragraph of Section
12.04, shall survive. If, after the deposit referred to in Section 4.01 has
been made, (x) the Holder of a Debt Security is entitled to, and does, elect
pursuant to Section 3.10(c), to receive payment in a Currency other than that
in which the deposit pursuant to Section 4.01 was made, or (y) if a Conversion
Event occurs with respect to the Currency in which the deposit was made or
elected to be received by the Holder pursuant to Section 3.10(c), then the
indebtedness represented by such Debt Security shall be fully discharged to the
extent that the deposit made with respect to such Debt Security shall be
converted into the Currency in which such payment is made.
Section 4.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
12.04, all money deposited with the Trustee pursuant to Section 4.01 shall be
held in trust and applied by it, in accordance with the provisions of the Debt
Securities and Coupons, if any, 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 FIVE
REMEDIES
Section 5.01. 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
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49
of law, pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Debt
Security or any payment with respect to the Coupons, if any, of such
series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (and
premium, if any, on) any Debt Security of such series at its Maturity;
or
(3) default in the deposit of any sinking fund payment,
when and as due by the terms of a Debt Security of such series; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company 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 any covenant or
warranty 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
(5) 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 60
consecutive days; or
(6) 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
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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
(7) any other Event of Default provided with respect to
Debt Securities of that series pursuant to Section 3.01.
Section 5.02. 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 any) shall become immediately due and payable. Upon payment of
such amount in the Currency in which such Debt Securities are denominated
(except as otherwise provided pursuant to Section 3.01 or 3.10), 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 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
(1) the Company has paid or deposited with the Trustee a
sum in the Currency in which such Debt Securities are denominated
(except as otherwise provided pursuant to Section 3.01 or 3.10)
sufficient to pay
(A) all overdue installments of interest on all Debt
Securities or all overdue payments with respect to
any Coupons of such series,
<PAGE> 57
51
(B) 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,
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of
interest on each Debt Security of such series or upon
overdue payments on any Coupons of such series at the
Overdue Rate, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel; provided, however, that all sums payable
under this clause (D) shall be paid in Dollars;
and
(2) 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 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of
interest on any Debt Security or any payment with respect to any
Coupons when such interest or payment becomes due and payable and such
default continues for a period of 30 days,
(2) default is made in the payment of principal of (or
premium, if any, on) any Debt Security at the Maturity thereof, or
(3) 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,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities or of such Coupons, the amount then due and
payable on such Debt Securities or matured Coupons, for the principal (and
premium, if any) and interest, if any, and, to the extent that payment of such
<PAGE> 58
52
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 Coupons, 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 and Coupons wherever situated.
If an Event of Default with respect to Debt Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Debt Securities
and Coupons of such series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
Section 5.04. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial 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 and Coupons, if any, 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 for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) 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 5.02) (and premium, if any) and interest owing
and unpaid in respect of the Debt Securities and Coupons of such
series and to file such other papers or documents and take such other
actions,
<PAGE> 59
53
including participating as a member, voting or otherwise, of any
committee of creditors appointed in the matter, 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 and Coupons allowed in such judicial proceeding,
and
(ii) 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 6.07.
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 and any Coupons 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.
Section 5.05. Trustee May Enforce Claims Without Possession
of Debt Securities.
All rights of action and claims under this Indenture or the
Debt Securities and the Coupons, if any, of any series may be prosecuted and
enforced by the Trustee without the possession of any of such Debt Securities
or Coupons 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 or Coupons in respect of
which such judgment has been recovered.
Section 5.06. 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 or
Coupons of
<PAGE> 60
54
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 6.07.
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debt Securities
or Coupons 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 or Coupons for principal (and premium, if any) and
interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
Section 5.07. Limitation on Suits.
No Holder of any Debt Security or Coupon 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
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to such
series;
(2) 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;
(3) 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;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding 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
<PAGE> 61
55
the Holders of Outstanding Debt Securities or Coupons 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 5.07, each
and every Holder of Debt Securities or Coupons 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 5.08. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Debt Security or of any Coupon shall have the right, which is
absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 3.07) interest on such Debt Security
or Coupon on the respective Stated Maturity or Maturities expressed in such
Debt Security or Coupon (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 5.09. 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.
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
<PAGE> 62
56
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 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
(1) such direction shall not be in conflict with any rule
of law or with this Indenture;
(2) subject to the provisions of Section 6.01, 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;
(3) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction; and
(4) this provision shall not affect the rights of the Trustee
set forth in Section 6.01(c)(4).
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series may on behalf of the Holders of
all the Debt Securities of any such series waive, by notice to the Trustee and
the Company, any past default or Event of Default hereunder with respect to
such series and its consequences, except a default
(1) 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
(2) in respect of a covenant or provision hereof which
pursuant to Article Eleven cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of such series
affected.
<PAGE> 63
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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 Event of
Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Debt Security or any Coupon 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 or Coupon for the enforcement of the payment of the principal of (or
premium, if any) or interest on such Debt Security or the payment of any Coupon
on or after the respective Stated Maturity or Maturities expressed in such Debt
Security or Coupon (or, in the case of redemption, on or after the Redemption
Date).
Section 5.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
<PAGE> 64
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ARTICLE SIX
THE TRUSTEE
Section 6.01. 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 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) Subject to Section 6.04, 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 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
<PAGE> 65
59
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture; and
(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 not be charged with knowledge of any
default or Event of Default or any other act or circumstance upon the
occurrence of which the Trustee may be required to take action unless
a Responsible Officer of the Trustee obtains actual knowledge of such
default, Event of Default, act or circumstance or unless written
notice referencing this Indenture or the Debt Securities is received
by the Trustee at the Corporate Trust Office.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 6.02. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
with respect to Debt Securities or Coupons, if any, of any series, the Trustee
shall give notice to all Holders of Debt Securities and Coupons 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 or Coupon of such series or in the payment of any sinking fund
installment with respect to Debt Securities of such series, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders of Debt Securities
and of Coupons of such series; and provided, further, that in the case of any
default of the character specified in Section 5.01(4) with respect to 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 6.02 shall be
transmitted by mail:
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(1) to all Registered Holders, as the names and addresses
of the Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as
have within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose; and
(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 7.02(a) of this Indenture; and
(4) to the Company.
Section 6.03. Certain Rights of Trustee.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, 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
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
<PAGE> 67
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(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, 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 (including any agent appointed pursuant
to Section 3.10(j)) or attorney appointed with due care by it hereunder.
Section 6.04. 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 or Coupons, if any, 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. The Trustee
assumes no responsibility for the accuracy of any statements in any
registration statement relating to the Debt Securities.
Section 6.05. 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 or Coupons, and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
Section 6.06. Money Held in Trust.
Money in any Currency 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.
<PAGE> 68
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Section 6.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such
compensation in Dollars as the Company and the Trustee shall from time
to time agree in writing 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);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee in Dollars upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee
in connection with the administration of the trusts herein set forth
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith; and
(3) to indemnify in Dollars the Trustee for, and to hold
it harmless against, any loss, liability, damage, claims or expense,
including taxes (other than taxes based upon, measured by or
determined by income of the Trustee), 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 and in addition to its rights under Section 5.06,
the Trustee shall have a claim prior to the Debt Securities and Coupons, if
any, upon all property and funds held or collected by the Trustee as such,
except funds held in trust pursuant to Section 15.03 hereof or for the payment
of amounts due on particular Debt Securities and Coupons. The fees and
expenses incurred by the Trustee in connection with any bankruptcy of the
Company shall constitute fees and expenses of administration; provided,
however, that this shall not affect the Trustee's rights as set forth in the
preceding sentence or Section 5.06.
Section 6.08. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section with respect to the Debt Securities of any
series, then, within 90 days after ascertaining that it has such conflicting
interest, and if the default (as hereinafter defined) to which such conflicting
interest relates has not been cured or duly waived or otherwise
<PAGE> 69
63
eliminated before the end of such 90-day period, the Trustee shall either
eliminate such conflicting interest or, except as otherwise provided below,
resign with respect to the Debt Securities of such series, and the Company
shall take prompt steps to have a successor appointed, in the manner and with
the effect hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply
with the provisions of subsection (a) of this Section with respect to the Debt
Securities of any series, the Trustee shall, within 10 days after the
expiration of such 90-day period, transmit to all Holders of Debt Securities of
such series notice of such failure.
Notice given pursuant to this Section 6.08(b) shall be
transmitted by mail:
(1) to all Registered Holders, as the names and addresses
of the Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose;
(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 7.02(a) of this Indenture; and
(4) to the Company.
(c) For the purposes of this Section, the Trustee shall
be deemed to have a conflicting interest with respect to the Debt Securities of
any series, if there shall exist an Event of Default (as such term is defined
herein, but exclusive of any period of grace or requirement of notice) with
respect to such Debt Securities and
(1) the Trustee is trustee under this Indenture with
respect to the Outstanding Debt Securities of any series other than
that series or is trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the Company are outstanding, unless such other
indenture is a collateral trust indenture under which the only
collateral consists of Debt Securities issued under this Indenture,
provided that there shall be excluded from the operation of this
paragraph this Indenture with respect to the Debt Securities of any
series other than that series and any other indenture or indentures
under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if
<PAGE> 70
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(i) this Indenture and such other indenture or
indentures (and all series of securities issuable thereunder)
are wholly unsecured and rank equally and such other indenture
or indentures are hereafter qualified under the Trust
Indenture Act, unless the Commission shall have found and
declared by order pursuant to Section 305(b) or Section 307(c)
of the Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to the Debt
Securities of such series and one or more other series or the
provisions of such other indenture or indentures which are so
likely to involve a material conflict of interest as to make
it necessary, in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under
this Indenture with respect to the Debt Securities of such
series and such other series or under such other indenture or
indentures, or
(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to the Debt Securities of such series
and such other series or such other indenture or indentures is
not so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection
of investors to disqualify the Trustee from acting as such
under this Indenture with respect to the Debt Securities of
such series and such other series or under such other
indenture or indentures;
(2) the Trustee or any of its directors or executive
officers is an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee or
representative of the Company, or of an underwriter (other than the
Trustee itself) for the Company who is currently engaged in the
business of underwriting, except that (i) one individual may be a
director or an executive officer, or both, of the Trustee and a
director or an executive officer, or both, of the Company but may not
be at the same time an executive officer of both the Trustee and the
Company; (ii) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a
director of the Company; and (iii) the Trustee may be designated by
the
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Company or by any underwriter for the Company to act in the capacity
of transfer agent, registrar, custodian, paying agent, fiscal agent,
escrow agent, or depositary or in any other similar capacity, or,
subject to the provisions of paragraph (1) of this subsection, to act
as trustee, whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee
is beneficially owned either by the Company or by any director,
partner or executive officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more of
such persons; or 10% or more of the voting securities of the Trustee
is beneficially owned either by an underwriter for the Company or by
any director, partner or executive officer thereof or is beneficially
owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection defined), (i) 5% or more of the voting
securities, or 10% or more of any other class of security, of the
Company not including the Debt Securities issued under this Indenture
and securities issued under any other indenture under which the
Trustee is also trustee, or (ii) 10% or more of any class of security
of an underwriter for the Company;
(7) the Trustee is the beneficial owner of or holds as
collateral security for an obligation which is in default, 5% or more
of the voting securities of any person who, to the knowledge of the
Trustee, owns 10% or more of the voting securities of, or controls
directly or indirectly or is under direct or indirect common control
with, the Company;
(8) the Trustee is the beneficial owner of or holds as
collateral security for an obligation which is in default, 10% or more
of any class of security of any person who, to the knowledge of the
Trustee, owns 50% or more of the voting securities of the Company;
(9) the Trustee owns, on the date of such Event of
Default or any anniversary of such Event of Default while such Event
of Default remains outstanding, in the capacity of executor,
administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an
aggregate of 25% or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified
percentage of which would have constituted a conflicting interest
under paragraph (6), (7) or (8) of this subsection. As to any such
securities of which the Trustee acquired ownership through becoming
executor, administrator or testamentary trustee of an estate which
included them, the provisions of
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the preceding sentence shall not apply, for a period of not more than
two years from the date of such acquisition, to the extent that such
securities included in such estate do not exceed 25% of such voting
securities or 25% of any such class of security. Promptly after the
dates of any such Event of Default and annually in each succeeding
year that such Event of Default continues, the Trustee shall make a
check of its holdings of such securities in any of the above-mentioned
capacities as of such dates. If the Company fails to make payment in
full of the principal of (or premium, if any) or interest on any of
the Debt Securities when and as the same becomes due and payable, and
such failure continues for 30 days thereafter, the Trustee shall make
a prompt check of its holdings of such securities in any of the
above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall be considered as though beneficially owned by the Trustee for
the purposes of paragraphs (6), (7) and (8) of this subsection; or
(10) except under the circumstances described in
paragraph (1), (3), (4), (5) or (6) of Section 6.13(b) of this
Indenture, the Trustee shall be or shall become a creditor of the
Company.
For the purposes of paragraph (1) of this subsection, the term
"series of securities" or "series" means a series, class or group of securities
issuable under an indenture pursuant to whose terms holders of one such series
may vote to direct the Trustee, or otherwise take action pursuant to a vote of
such holders, separately from holders of another series; provided, that "series
of securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in paragraphs (5) to (9),
inclusive, of this subsection shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed
to be "in default" when a default
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in payment of principal shall have continued for 30 days or more and shall not
have been cured; and (iii) the Trustee shall not be deemed to be the owner or
holder of (A) any security which it holds as collateral security, as trustee or
otherwise, for an obligation which is not in default as defined in clause (ii)
above, or (B) any security which it holds as collateral security under this
Indenture, irrespective of any default hereunder, or (C) any security which it
holds as agent for collection, or as custodian, escrow agent or depositary, or
in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to
the Company means every person who, within one year prior to the time
as of which the determination is made, has purchased from the Company
with a view to, or has offered or sold for the Company in connection
with, the distribution of any security of the Company outstanding at
such time, or has participated or has had a direct or indirect
participation in any such undertaking, or has participated or has had
a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest
was limited to a commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" means any director of a
corporation, or any individual performing similar functions with
respect to any organization whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation,
a partnership, an association, a joint stock company, a trust, an
estate, an unincorporated organization, or a government or political
subdivision thereof. As used in this paragraph, the term "trust"
shall include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangements
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Debt
Securities of any series.
(6) The term "executive officer" means the president,
every vice president, every trust officer, the cashier, the
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secretary, and the treasurer of a corporation, and any individual
customarily performing similar functions with respect to any
organization, whether incorporated or unincorporated, but shall not
include the chairman of the board of directors.
(e) The percentages of voting securities and other
securities specified in this Section shall be calculated in accordance with the
following provisions:
(1) A specified percentage of the voting securities of
the Trustee, the Company or any other person referred to in this
Section (each of whom is referred to as a "person" in this paragraph)
means such amount of the outstanding voting securities of such person
as entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(3) The term "amount", when used with regard to
securities means the principal amount if relating to evidences of
indebtedness, the number of shares if relating to capital shares, and
the number of units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by
or for the account of the issuer. The following securities shall not
be deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking
fund relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking
fund relating to another class of securities of the issuer, if
the obligation evidenced by such other class of securities is
not in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow
by the issuer thereof;
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provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided,
however, that, in the case of secured evidences of indebtedness, all
of which are issued under a single indenture, differences in the
interest rates or maturity dates of various series thereof shall not
be deemed sufficient to constitute such series different classes; and
provided, further, that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities
of different classes, whether or not they are issued under a single
indenture.
(f) Except in the case of a default in the payment of the
principal of or interest on any Debt Security of any series, or in the payment
of any sinking or purchase fund installment, the Trustee shall not be required
to resign as provided by this Section if the Trustee shall have sustained the
burden of proving, on application to the Commission and after opportunity for
hearing thereon, that:
(1) the Event of Default may be cured or waived during a
reasonable period and under the procedures described in such
application; and
(2) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Debt Securities.
The filing of such an application shall automatically stay the performance of
the duty to resign until the Commission orders otherwise.
Section 6.09. 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 $50,000,000, 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
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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.
(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 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 6.08(a)
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
6.09 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.
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(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 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 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 1.05 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
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such successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its claim, if any, provided for in Section
6.07.
(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 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.
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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.
(a) Subject to subsection (b) of this Section, if the Trustee
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company within three months prior to a default, as defined in
subsection (c) of this Section, or subsequent to such default, then, unless and
until such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually, the Holders of the
Debt Securities and of the Coupons, if any, and the holders of other indenture
securities (as defined in subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three-month period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a voluntary or involuntary case had been commenced in
respect of the Company under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law upon the date of such
default; and
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(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three-month period, or an amount equal to the proceeds of any
such property, if disposed of,subject, however, to the rights, if any,
of the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Company) who
is liable thereon, and (ii) the proceeds of the bona fide sale of any
such claim by the Trustee to a third Person, and (iii) distributions
made in cash, securities or other property in respect of claims filed
against the Company in bankruptcy or receivership or in proceedings or
reorganization pursuant to the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such three-month period;
(C) to realize, for its own account, but only to the extent
of the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three-month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to
believe that a default, as defined in subsection (c) of this Section,
would occur within three months, or
(D) to receive payment on any claim referred to in paragraph
(B) or (C) against the release of any property held as security for
such claim as provided in paragraph (B) or (C), as the case may be, to
the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three-month period for property held as
security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of
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the Trustee as such creditor, such claim shall have the same status as such
pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Holders and the holders of other indenture
securities in such manner that the Trustee, the Holders and the holders of
other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal bankruptcy laws, as now or hereafter constituted or any other
applicable Federal or State bankruptcy, insolvency or other similar law, the
same percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from the Company
of the funds and property in such special account and before crediting to the
respective claims of the Trustee and the Holders and the holders of other
indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, but
after crediting thereon receipts on account of the indebtedness represented by
their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal or State bankruptcy,
insolvency or other similar law, whether such distribution is made in cash,
securities, or other property, but shall not include any such distribution with
respect to the secured portion, if any, of such claim. The court in which such
bankruptcy, receivership or proceedings for reorganization is pending shall
have jurisdiction (i) to apportion among the Trustee and the Holders and the
holders of other indenture securities, in accordance with the provisions of
this paragraph, the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part,
to give to the provisions of this paragraph due consideration in determining
the fairness of the distributions to be made to the Trustee and the Holders and
the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such special account or
as security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claim, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
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Any Trustee which has resigned or been removed after the
beginning of such three-month period shall be subject to the provisions of this
subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three-month
period, it shall be subject to the provisions of this subsection if and only if
the following conditions exist:
(i) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if such Trustee
had continued as Trustee, occurred after the beginning of such
three-month period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection
(a) of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the Lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the Holders
at the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented, or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) The acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of
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self-liquidating paper as defined in subsection (c) of this Section.
(c) for the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Debt Securities or
upon the other indenture securities when and as such principal or
interest becomes due and payable.
(2) The term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account.
(3) The term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill
of exchange, acceptance or obligation which is made, drawn, negotiated
or incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation
of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" means any obligor upon the Debt
Securities.
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 it is serving as Trustee.
Debt Securities of each such series authenticated by such Authenticating Agent
shall be entitled to
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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. 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 $5,000,000 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 1.05. 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
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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 6.07. The
Authenticating Agent for the Debt Securities of any series shall have no
responsibility or liability for any action taken by it as such in good faith
and without negligence at the direction of the Trustee for such series.
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 referred to in
the within mentioned Indenture.
_______________________________________
As Trustee
Dated: By:________________________
As Authenticating Agent
By:________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses
of Holders.
The Company will furnish or cause to be furnished to the
Trustee with respect to Registered 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
Registered Securities of such series (or on semi-annual dates in each year to
be determined pursuant to Section 3.01 if the Registered 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 15 days after the receipt by the Company of any
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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.
The Company shall also be required to furnish to the Trustee
at all such times set forth above all information in the possession or control
of the Company or any of its Paying Agents other than the Trustee as to the
names and addresses of the Holders of Bearer Securities of all series;
provided, however, that the Company shall have no obligation to investigate any
matter relating to any Holders of Bearer Securities of any series.
Section 7.02. 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 7.01 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
7.03(c)(2).
The Trustee may destroy any list furnished to it as provided
in Section 7.01 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 7.03(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
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(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section
7.02(a), or
(ii) inform such applicants as to the approximate number of
Holders of 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 7.02(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 inquest 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
7.02(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of 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.
(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 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing of any material pursuant to a request made under Section 7.02(b).
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Section 7.03. Reports by Trustee.
(a) Within 60 days after May 15 of each year, commencing May
15, 1995, 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 7.03, 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 6.09 and its
qualifications under Section 6.08;
(2) the creation of or any material change to a relationship
specified in paragraph (1) through (10) of Section 6.08(c) of this
Indenture;
(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 6.13(b)(2), (3), (4) or (6);
(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 6.02.
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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 7.02 (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.
(c) Reports pursuant to this Section 7.03 shall be
transmitted by mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders of Registered Securities appear in the
Security Register;
(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose; and
(3) except in the cases of reports pursuant to subsection
(b) of this Section 7.03, 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 7.02(a).
(d) 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 7.04. Reports by Company.
The Company will:
(1) file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports
(or copies of such portions of
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any of the foregoing as the Commission may from time to time by rules
and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended; or, if the Company is not
required to file information, documents or reports pursuant to either
of said Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, in
respect of a security listed and registered on a national securities
exchange as may be required from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(3) transmit to all Holders of Debt Securities, in the
manner and to the extent provided in Section 7.03, within 30 days
after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission.
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. 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 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
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percentage have joined therein may be evidenced (a) by the instrument or
instruments executed by Holders 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 Nine, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Holders.
Section 8.02. Proof of Ownership; Proof of Execution of
Instruments by Holder.
The ownership of Registered 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.
The ownership of Bearer Securities shall be proved by
production of such Bearer Securities or by a certificate executed by any bank
or trust company, which certificate shall be dated and shall state that on the
date thereof a Bearer Security bearing a specified identifying number or other
mark was deposited with or exhibited to the person executing such certificate
by the person named in such certificate, or by any other proof of possession
reasonably satisfactory to the Trustee. The holding by the person named in any
such certificate of any Bearer Security specified therein shall be presumed to
continue for a period of one year unless at the time of determination of such
holding (1) another certificate bearing a later date issued in respect of the
same Bearer Security shall be produced, (2) such Bearer Security shall be
produced by some other person, (3) such Bearer Security shall have been
registered on the Security Register, if, pursuant to Section 3.01, such Bearer
Security can be so registered, or (4) such Bearer Security shall have been
cancelled or paid.
Subject to the provisions of Sections 6.01, 6.03 and 9.05,
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.
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The record of any Holders' meeting shall be proved in the
manner provided in Section 9.06.
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 8.03. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Registered Security is
registered as the owner of such Registered Security for the purpose of
receiving payment of the principal of (and premium, if any) and (subject to
Section 3.07) interest, if any, on such Registered Security and for all other
purposes whatsoever, whether or not such Registered 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. The Company, the Trustee, and any
agent of the Company or the Trustee may treat the Holder of any Bearer Security
or of any Coupon as the absolute owner of such Bearer Security or Coupon for
the purposes of receiving payment thereof or on account thereof and for all
other purposes whatsoever, whether or not such Bearer Security or Coupon 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 or Coupon.
Section 8.04. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, 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 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 8.02, 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 5.08, upon all future Holders of such Debt Security and all past,
present and future Holders of Coupons, if any, appertaining thereto and of any
Debt Securities and Coupons 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 Coupons or such other Debt
Securities or Coupons.
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ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. 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 Nine for
any of the following purposes:
(1) 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 Five;
(2) to remove the Trustee for such series and appoint a
successor Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) 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 9.02. 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 9.01, 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 1.05. Such notice
shall be given not less than 20 days nor more than 90 days prior to the date
fixed for the meeting.
Section 9.03. 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 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
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not have given the notice of such meeting within 20 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 9.01, by giving notice thereof as provided in
Section 9.02.
Section 9.04. 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 and 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 9.05. 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 9.03, 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 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 3.01) of Debt Securities of such series held or
represented by him; 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 instruments in writing duly
designating him as the person to vote on behalf of Holders
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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 9.02 or
9.03 may be adjourned from time to time by a majority of such Holders present
and the meeting may be held as so adjourned without further notice.
Section 9.06. Voting.
The vote upon any resolution submitted to any meeting of
Holders 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 9.02. 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 9.07. No Delay of Rights by Meeting.
Nothing contained in this Article Nine 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 TEN
INTENTIONALLY OMITTED
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ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of
Holders.
Without prior notice to or the consent of any Holders, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by such successor of the covenants of the
Company herein and in the Debt Securities and Coupons, if any,
contained; or
(2) to add to the covenants of the Company, for the benefit
of the Holders of all or any series of Debt Securities and the
Coupons, if any, appertaining thereto (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
(3) 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
(4) to add or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Debt Securities of any series in bearer form, registrable
or not registrable, and with or without Coupons, to permit Bearer
Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations or to permit the issuance
of Debt Securities of any series in uncertificated form, provided that
any such action shall not adversely affect the interests of the
Holders of Debt Securities of any series or any related Coupons in any
material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Debt Security or Coupon 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
(6) to secure the Debt Securities; or
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(7) 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 Securities pursuant to
Article Four or Fifteen, 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 or any related
Coupons in any material respect; or
(8) to establish the form or terms of Debt Securities and
Coupons, if any, of any series as permitted by Sections 2.01 and 3.01;
or
(9) 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, pursuant to the requirements of Section 6.11; or
(10) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, to eliminate any conflict between the terms of this
Indenture or the Debt Securities and the Trust Indenture Act 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 or Coupons, if any, of any series created prior to the
execution of such supplemental indenture in any material respect.
Section 11.02. Supplemental Indentures With Consent of
Holders.
With 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 supplemental indenture voting separately, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders under this Indenture of
such Debt Securities or Coupons, if any; 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,
(1) change the Stated Maturity of the principal of, or
installment of interest, if any, on, any Debt Security, or
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reduce the principal amount thereof or the interest thereon or any
premium payable upon redemption thereof, or change the Stated Maturity
of or reduce the amount of any payment to be made with respect to any
Coupon, or change the Currency or Currencies in which the principal of
(and premium, if any) or interest on such Debt Security is denominated
or payable, 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 5.02, or
adversely affect the right of repayment or repurchase, if any, at the
option of the Holder, or reduce the amount of, or postpone the date
fixed for, any payment under any sinking fund or analogous provisions
for any Debt Security, 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), or
limit the obligation of the Company to maintain a paying agency
outside the United States for payment on Bearer Securities as provided
in Section 12.03; or
(2) 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
(3) modify any of the provisions of this Section, Section
5.13 or Section 12.09, 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 and Section 12.09, or
the deletion of this proviso, in accordance with the requirements of
Sections 6.11 and 11.01(7).
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 and Coupons, if any, or which modifies the
rights of the Holders of Debt Securities and Coupons 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 and Coupons, if
any, of any other series.
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Section 11.03. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a material way.
Section 11.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Debt Securities and Coupons theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 11.05. 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 11.06. Reference in Debt Securities to Supplemental
Indentures.
Debt Securities and Coupons, if any, 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
and Coupons 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 and Coupons of such series.
Section 11.07. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the
appropriate Trustee of any supplemental indenture pursuant to Section 11.02,
the Company shall transmit, in the manner and to the extent provided in Section
1.05, to all Holders of any series of the Debt Securities affected thereby, a
notice setting forth in general terms the substance of such supplemental
indenture.
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ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Debt Securities and Coupons, if any, 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, the Coupons and this
Indenture. Unless otherwise specified as contemplated by Section 3.01 with
respect to any series of Debt Securities or except as otherwise provided in
Section 3.06, any interest due on Bearer Securities on or before Maturity shall
be payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature. If so
provided in the terms of any series of Debt Securities established as provided
in Section 3.01, 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 12.02. Officer's Certificate as to Default.
The Company will deliver to the Trustee, on or before a date
not more than four months after the end of each fiscal year of the Company
(which on the date hereof is the calendar year) ending after the date hereof, a
certificate of the principal executive officer, principal financial officer or
principal accounting officer of the Company stating whether or not to the best
knowledge of the signer thereof the Company is in compliance with all covenants
and conditions under this Indenture, and, if the Company shall be in default,
specifying all such defaults and the nature 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.
Section 12.03. Maintenance of Office or Agency.
If Debt Securities of a series are issuable only as Registered
Securities, the Company will maintain or cause to be maintained 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 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 Debt Securities
of a series are issuable as Bearer Securities,
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the Company will maintain (A) in the Borough of Manhattan, The City and State
of New York, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment, where any Registered Securities of
that series may be surrendered for registration of transfer, where Debt
Securities of that series may be surrendered for exchange or redemption, where
notices and demands to or upon the Company in respect of the Debt Securities of
that series and this Indenture may be served and where Bearer Securities of
that series and related Coupons may be presented or surrendered for payment in
the circumstances described in the following paragraph (and not otherwise), (B)
subject to any laws or regulations applicable thereto, in a Place of Payment
for that series which is located outside the United States, an office or agency
where Debt Securities of that series and related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Debt Securities of that series, if so provided pursuant to Section 3.01);
provided, however, that if the Debt Securities of that 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 (C) 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 Registered 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, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment at
the offices specified in the Security, and the Company hereby appoints the
Trustee as its agent to receive all presentations, surrenders, notices and
demands.
No payment of principal, premium or interest on Bearer
Securities shall be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States; provided,
however, that, if the Debt Securities of a series are denominated and payable
in Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any additional amounts payable on
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Securities of such series, if so provided pursuant to Section 3.01) shall be
made at the office of the Trustee or the Company's Paying Agent in the Borough
of Manhattan, The City and State of New York, if (but only if) payment in
Dollars of the full amount of such principal, premium, interest or additional
amounts, as the case may be, at all offices or agencies outside the United
States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
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 12.04. 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 and Coupons, if any, 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 and Coupons, 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
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:
(1) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Debt
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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;
(2) 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
(3) 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.
Subject to any applicable abandoned property law, 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 or Coupon 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, in its sole discretion, at the expense of the Company cause to be
transmitted in the manner and to the extent provided by Section 1.05, 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 12.05. Corporate Existence.
Subject to Article Ten, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if
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the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.
Section 12.06. Purchase of Debt Securities by Company.
If the Debt Securities of a series are listed on The Stock
Exchange of the United Kingdom and the Republic of Ireland and such stock
exchange shall so require, the Company will not purchase any Debt Securities of
that series by private treaty at a price (exclusive of expenses and accrued
interest) which exceeds 120% of the mean of the nominal quotations of the Debt
Securities of that series as shown in The Stock Exchange Daily Official List
for the last trading day preceding the date of purchase.
Section 12.07. INTENTIONALLY OMITTED
Section 12.08. INTENTIONALLY OMITTED
Section 12.09. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Section 12.05 (and, if so
specified pursuant to Section 3.01, any other covenant not set forth herein and
specified pursuant to Section 3.01 to be applicable to the Debt Securities of
any series, except as otherwise provided pursuant to Section 3.01) with respect
to the Debt Securities of any series if before the time for such compliance the
Holders of 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 THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article.
Debt Securities of any series which are redeemable before their
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Debt Securities of any series)
in accordance with this Article.
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Section 13.02. Election to Redeem; Notice to Trustee.
The election of the Company to redeem (or, in the case of
Discount Securities, to permit the Holders to elect to surrender for
redemption) 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 13.03, the Company shall, at
least 60 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 13.03. Selection by Trustee of Debt Securities to Be
Redeemed.
Except in the case of a redemption in whole of the Bearer
Securities or the Registered Securities of such series, 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 the
minimum authorized denomination for 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 the minimum authorized denomination for
Debt Securities of such series pursuant to Section 3.02 in the Currency in
which the Debt Securities of such series are denominated. The portions of the
principal amount of Debt Securities so selected for partial redemption shall be
equal to the minimum authorized denominations for Debt Securities of such
series pursuant to Section 3.02 in the Currency in which the Debt Securities of
such series are denominated or any integral multiple thereof, except as
otherwise set forth in the applicable form of Debt Securities. In any case
when more than one Registered 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 Registered Security of such series.
The Trustee shall promptly notify the Company 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.
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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 13.04. 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 Thirteen, in the manner provided
in Section 1.05. 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:
(1) the Redemption Date,
(2) the Redemption Price,
(3) 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,
(4) 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,
(5) 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,
(6) that, unless otherwise specified in such notice,
Coupon Securities of any series, if any, surrendered for redemption
must be accompanied by all Coupons maturing subsequent to the date
fixed for redemption, failing which the amount of any such missing
Coupon or Coupons will be deducted from the Redemption Price,
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(7) the Place or Places of Payment where such Debt
Securities are to be surrendered for payment of the Redemption Price,
(8) if Bearer Securities of any series are to be redeemed
and any Registered Securities of such series are not to be redeemed,
and if such Bearer Securities may be exchanged for Registered
Securities not subject to redemption on this Redemption Date pursuant
to Section 3.05(b) or otherwise, the last date on which such exchanges
may be made, and
(9) that the redemption is for a sinking fund, if such is the
case.
Section 13.05. 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 12.04) an amount of money in the Currency or Currencies in
which such Debt Securities are denominated (except as provided pursuant to
Section 3.01) sufficient to pay the Redemption Price of such Debt Securities or
any portions thereof which are to be redeemed on that date.
Section 13.06. 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 in the Currency in which the Debt Securities of
such series are payable (except as otherwise specified pursuant to Section 3.01
or 3.10), 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 installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 12.03) and, unless otherwise specified
as contemplated by Section 3.01, only upon presentation and surrender of
Coupons for such interest; and provided, further, that, unless otherwise
specified as contemplated by Section 3.01, installments of interest on
Registered 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 3.07.
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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.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
Redemption Date, the Redemption Price for such Coupon Security may be reduced
by an amount equal to the face amount of all such missing Coupons. If
thereafter the Holder of such Coupon shall surrender to any Paying Agent
outside the United States any such missing Coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted. The surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee, if there be
furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless.
Section 13.07. 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 3.01 (in the case of Registered
Securities) and at an office of the Trustee or such other office or agency of
the Company outside the United States as is specified pursuant to Section 3.01
(in the case of Bearer Securities) 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 his 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, and, in the case of a Coupon Security, with
appropriate Coupons attached. 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 FOURTEEN
SINKING FUNDS
Section 14.01. 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 3.01 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 14.02. 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 14.02. 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 (together with the unmatured
Coupons, if any, appertaining thereto) 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 sinking fund payment 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 purpose 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 14.03. 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
<PAGE> 110
104
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 in the Currency or Currencies in which the Debt Securities of such series
are denominated (except as provided pursuant to Section 3.01) and the portion
thereof, if any, which is to be satisfied by delivering and crediting Debt
Securities of such series pursuant to Section 14.02 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
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 14.02 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 12.04) 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 12.04) 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.
<PAGE> 111
105
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 13.03 and the Company shall cause notice of the redemption
thereof to be given in the manner provided in Section 13.04. 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 13.06.
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 12.04) in cash
a sum, in the Currency or Currencies in which Debt Securities of such series
are denominated (except as provided pursuant to Sections 3.01 or 3.10), 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.
Neither the Trustee nor the Company shall redeem any Debt
Securities of a series with sinking fund moneys or mail any notice of
redemption of Debt Securities of such series by operation of the sinking fund
for such series during the continuance of a default in payment of interest, if
any, on any Debt Securities of such series or of any Event of Default (other
than an Event of Default occurring as a consequence of this paragraph) with
respect to the Debt Securities of such series, except that if the notice of
redemption shall have been provided in accordance with the provisions hereof,
the Trustee (or the Company, if the Company is then acting as its own Paying
Agent) shall redeem such Debt Securities if cash sufficient for that purpose
shall be deposited with the Trustee (or segregated by the Company) for that
purpose in accordance with the terms of this Article. Except as aforesaid, any
moneys in the sinking fund for such series at the time when any such default or
Event of Default shall occur and any moneys thereafter paid into such sinking
fund shall, during the continuance of such default or Event of Default, be held
as security for the payment of the Debt Securities and Coupons, if any, of such
series; provided, however, that in case such default or Event of Default shall
have been cured or waived as provided herein, such moneys shall thereafter be
applied on or prior to the next sinking fund payment date for the Debt
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section.
ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Applicability of Article.
If, pursuant to Section 3.01, provision is made for the
defeasance of Debt Securities of a series, and if the Debt
<PAGE> 112
106
Securities of such series are Registered Securities and denominated and payable
only in Dollars (except as provided pursuant to Section 3.01) then the
provisions of this Article shall be applicable except as otherwise specified
pursuant to Section 3.01 for Debt Securities of such series. Defeasance
provisions, if any, for Debt Securities denominated in a Foreign Currency or
Currencies or for Bearer Securities may be specified pursuant to Section 3.01.
Section 15.02. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations.
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) if
so specified pursuant to Section 3.01, the Company shall cease to be under any
obligation to comply with any obligation of the Company or restrictive covenant
added for the benefit of such series pursuant to Section 3.01) ("covenant
defeasance option") at any time after the applicable conditions set forth below
have been satisfied:
(1) 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;
(2) 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 6.08 and for purposes of the Trust Indenture Act
with respect to the Debt Securities of any series;
(3) 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;
(4) if the Debt Securities of such series are then listed
on any national securities exchange, the Company
<PAGE> 113
107
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;
(5) no Event of Default or event (including such deposit)
which, with notice or lapse of time or both, would become an Event of
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 5.01(5) or Section 5.01(6) or event which with the giving of
notice or lapse of time, or both, would become an Event of Default
under Section 5.01(5) or Section 5.01(6) shall have occurred and be
continuing on the 91st day after such date; and
(6) 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 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 5.01(5) or Section 5.01(6) or
event which with the giving of notice or lapse of time, or both, would become
an Event of Default under Section 5.01(5) or Section 5.01(6) 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 3.04, 3.05,
3.06, 6.07, 12.03 and 15.03 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 timely 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
<PAGE> 114
108
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 a 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 15.03. Deposited Moneys and U.S. Government
Obligations to Be Held in Trust.
All moneys and U.S. Government Obligations deposited with the
Trustee pursuant to Section 15.02 in respect of Debt Securities of a series
shall be held in trust and applied by it, in accordance with the 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 15.04. Repayment to Company.
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 15.02.
The provisions of the last paragraph of Section 12.04 shall
apply to any money held by the Trustee or any Paying Agent under this Article
that remains unclaimed for two years after the
<PAGE> 115
109
Maturity of any series of Debt Securities for which money or U.S. Government
Obligations have been deposited pursuant to Section 15.02.
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.
UNITED COMPANIES FINANCIAL CORPORATION
By:__________________________________
Title:_______________________________
Attest:
________________________
Title:
Seal
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:__________________________________
Title:_______________________________
Attest:
________________________
Title:
Seal
<PAGE> 116
STATE OF )
: ss.:
COUNTY OF )
On the day of , 1994, before me personally
came , to me known, who, being by me duly sworn, did depose and say
that he resides at ________________________________; that he is
_____________________________ of United Companies Financial Corporation one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
________________________
Notary Public
SEAL
<PAGE> 117
STATE OF ILLINOIS )
: ss.:
COUNTY OF COOK )
On the day of , 1994, before me personally
came _____________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________; that he is, ___________________ of
___________________________ one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
________________________
Notary Public
SEAL
<PAGE> 118
1
EXHIBIT A
(FORMS OF CERTIFICATION)
(FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR INTEREST PRIOR TO AN EXCHANGE DATE)
CERTIFICATE
(Insert title or sufficient description
of Securities to be delivered)
This is to certify that as of the date hereof and except as
set forth below principal amount of the above captioned Debt
Securities held by you for our account (i) is owned by person(s) that are not
United States person(s) (as defined below), (ii) is owned by United States
person(s) that are (a) foreign branches of United States financial institutions
(as defined in Section 1.165-12(c)(1)(v) of the United States Treasury
regulations) ("financial institutions") purchasing for their own account or for
resale, or (b) United States person(s) who acquired the Debt Securities through
foreign branches of United States financial institutions and who hold the Debt
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such United States financial institution
hereby agrees, on its own behalf or through its agent, that you may advise the
Company or the Company's agent that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of
1986, as amended, and the Treasury regulations thereunder), or (iii) is owned
by United States or foreign financial institution(s) for the purpose of resale
during the restricted period (as defined in Section 1.163-5(c)(2)(i)(D)(7) of
the United States Treasury regulations), and in addition if the owner of the
Debt Securities is a United States or foreign financial institution described
in clause (iii) above (whether or not also described in clause (i) or (ii))
this is to further certify that such financial institution has not acquired the
Debt Securities for the purpose of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the beneficial interest in the temporary global Security held by you for our
account in accordance with your operating procedures if any applicable
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certification applies as of such date.
<PAGE> 119
2
This certificate excepts and does not relate to ________
principal amount of Debt Securities held by you for our account as to which we
are not able to provide a certificate in this form. We understand that
exchange of such portion of the temporary global Note for definitive Bearer
Securities or interests in a permanent global Note cannot be made until we are
able to provide a certificate in this form.
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. "United States" means the United States of America (including
the States and the District of Columbia) and its "possessions" which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
Dated:________________________, 19__
(To be dated no earlier than the
10th day before the Exchange Date)
By:________________________
As, or as agent for, the
beneficial owner(s) of
the portion of the
temporary global Note to
which this certificate
relates.
<PAGE> 120
1
EXHIBIT B
(FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR AND
CEDEL, S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL NOTE)
CERTIFICATE
(Insert title or sufficient description
of Securities to be delivered)
The undersigned certifies that, based solely on certifications
we have received in writing, by tested telex or by electronic transmission from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount set forth below (our "Member Organizations")
substantially to the effect set forth in the Indenture as of the date hereof,
_________ principal amount of the above-captioned Debt Securities (i) is owned
by person(s) that are not United States person(s) (as defined below), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury regulations) ("financial institutions") purchasing for their
own account or for resale, or (b) United States person(s) who acquired the Debt
Securities through foreign branches of United States financial institutions and
who hold the Debt Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution has agreed, on its own behalf or through its agent, that
we may advise the Company or the Company's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
of 1986, as amended, and the Treasury regulations thereunder), or (iii) is
owned by United States or foreign financial institution(s) for the purpose of
resale during the restricted period (as defined in Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations), and in
addition United States or foreign financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Debt Securities for the purpose of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
We further certify (i) that we are not making available for
exchange or collection of any interest any portion of the temporary Global Note
excepted in such certifications and (ii) that as of the date hereof we have not
received any notification from any of our Member Organizations to the effect
that the statements made by such Member Organizations with respect to any
portion of the part submitted herewith for exchange or collection of any
interest are no longer true and cannot be relied upon as of the date hereof.
<PAGE> 121
2
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. "United States" means the United States of America (including
the States and the District of Columbia) and its "possessions" which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
Dated:________________________, 19__
(To be dated no earlier than the
Exchange Date)
By:________________________
(MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, as
Operator of the Euro-Clear
System) (CEDEL, S.A.)
<PAGE> 1
Exhibit 4.4
Draft 9/27/94
- --------------------------------------------------------------------------------
UNITED COMPANIES FINANCIAL CORPORATION
To
State Street Bank and Trust Company,
Trustee
__________
Indenture
Dated as of September __, 1994
__________
Subordinated Debt Securities
- --------------------------------------------------------------------------------
<PAGE> 2
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of September __, 1994
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C> <C>
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 116 (a) (1) (A) . . . . . . . . . . . . . . . . . . 5.02, 5.12
(a) (1) (B) . . . . . . . . . . . . . . . . . . 5.13
(a) (2) . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . 5.08
(c) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 317 (a) (1) . . . . . . . . . . . . . . . . . . . . 5.03
(a) (2) . . . . . . . . . . . . . . . . . . . . 5.04
(b) . . . . . . . . . . . . . . . . . . . . . . 12.04
Section 318 . . . . . . . . . . . . . . . . . . . . . . . . 1.06
</TABLE>
_______________
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . 1
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.03. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.04. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.05. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.06. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.07. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.08. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.09. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.13. No Security Interest Created . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.14. Liability Solely Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE TWO
DEBT SECURITY FORMS . . . . . . . . . . . . . . . . . . . . 19
Section 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.02. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.03. Securities in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE THREE
THE DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . 20
Section 3.01. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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Section 3.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.03. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.04. Temporary Debt Securities; Exchange of Temporary Global Notes for Definitive Bearer
Securities; Global Notes Representing Registered Securities . . . . . . . . . . . . . . . . . . . . . 28
Section 3.05. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.07. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 3.08. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 3.09. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 3.10. Currency of Payments in Respect of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 3.11. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 3.12. Exchange Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 3.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . 48
Section 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.02. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . 53
Section 5.04. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.05. Trustee May Enforce Claims Without Possession of Debt Securities . . . . . . . . . . . . . . . . . . . 55
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Section 5.06. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.07. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . . . . . . 56
Section 5.09. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.15. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE SIX
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.01. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.03. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.04. Not Responsible for Recitals or Issuance of Debt Securities . . . . . . . . . . . . . . . . . . . . . 63
Section 6.05. May Hold Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.06. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.08. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.09. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 6.10. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 6.12. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . . 74
Section 6.13. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . 75
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Section 6.14. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . . . . . . . . 81
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . 81
Section 7.02. Preservation of Information; Communication to Holders . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 7.03. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 7.04. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE EIGHT
CONCERNING THE HOLDERS . . . . . . . . . . . . . . . . . . . 86
Section 8.01. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 8.02. Proof of Ownership; Proof of Execution of Instruments by Holder . . . . . . . . . . . . . . . . . . . 87
Section 8.03. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 8.04. Revocation of Consents; Future Holders Bound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
ARTICLE NINE
HOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . 89
Section 9.01. Purposes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.02. Call of Meetings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.03. Call of Meetings by Company or Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.04. Qualifications for Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.05. Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.06. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 9.07. No Delay of Rights by Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE TEN
INTENTIONALLY OMITTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
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ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . 92
Section 11.01. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 11.02. Supplemental Indentures With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 11.03. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 11.04. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 11.05. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 11.06. Reference in Debt Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 95
Section 11.07. Notice of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 11.08. Effect on Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
ARTICLE TWELVE
COVENANTS . . . . . . . . . . . . . . . . . . . . . . 96
Section 12.01. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 12.02. Officer's Certificate as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 12.03. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 12.04. Money for Debt Securities; Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . 98
Section 12.05. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 12.06. Purchase of Debt Securities by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 12.07. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES . . . . . . . . . . . . . . . . . 101
Section 13.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 13.02. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 13.03. Selection by Trustee of Debt Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . 101
Section 13.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
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Section 13.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 13.06. Debt Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 13.07. Debt Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
ARTICLE FOURTEEN
SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . 105
Section 14.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments with Debt Securities . . . . . . . . . . . . . . . . 106
Section 14.03. Redemption of Debt Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
ARTICLE FIFTEEN
DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . 108
Section 15.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 15.02. Defeasance Upon Deposit of Moneys or U.S. Government Obligations . . . . . . . . . . . . . . . . . . 108
Section 15.03. Deposited Moneys and U.S. Government Obligations to Be Held in Trust . . . . . . . . . . . . . . . . 110
Section 15.04. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
ARTICLE SIXTEEN
SUBORDINATION . . . . . . . . . . . . . . . . . . . . . 111
Section 16.01. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Section 16.02. Distribution on Dissolution, Liquidation and Reorganization; Subrogation of Debt Securities . . . . . 112
Section 16.03. No Payment on Debt Securities in Event of Default on Senior Indebtedness . . . . . . . . . . . . . . 114
Section 16.04. Payments on Debt Securities Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Section 16.05. Authorization of Holders to Trustee to Effect Subordination . . . . . . . . . . . . . . . . . . . . . 115
Section 16.06. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Section 16.07. Trustee as Holder of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
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Section 16.08. Modifications of Terms of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 16.09. Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . . . . . . . . 117
Section 16.10. Article Sixteen Not to Prevent Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Section 16.11. Certain Conversions Not Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
ARTICLE SEVENTEEN
CONVERSION . . . . . . . . . . . . . . . . . . . . . . 118
Section 17.01. Applicability; Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Section 17.02. Conversion Procedure; Conversion Price; Fractional Shares . . . . . . . . . . . . . . . . . . . . . . 118
Section 17.03. Adjustment of Conversion Price for Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 17.04. Consolidation or Merger of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Section 17.05. Notice of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Section 17.06. Notice in Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Section 17.07. Company To Reserve Stock; Registration; Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Section 17.08. Taxes on Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Section 17.09. Conversion After Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Section 17.10. Company Determination Final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Section 17.11. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
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INDENTURE dated as of September __, 1994, between UNITED
COMPANIES FINANCIAL CORPORATION, a Louisiana corporation (hereinafter called
the "Company"), having its principal executive office at 4041 Essen Lane, Baton
Rouge, Louisiana 70809 and State Street Bank and Trust Company, a Massachusetts
banking corporation, as trustee (hereinafter called the "Trustee"), having its
Corporate Trust Office at Two International Place, Boston, Massachusetts 02110.
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 unsecured
and subordinated debentures, notes, bonds or other evidences of indebtedness
(herein generally called the "Debt Securities"), to be issued in one or more
series, as in this Indenture provided.
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 follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(2) 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;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the
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United States of America at the date of such computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Three or Article Six, are defined in
those respective Articles.
"Act" when used with respect to any Holder, has the meaning
specified in Section 8.01.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes
of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Affiliated Corporation" means any corporation which is
controlled by the Company but which is not a Subsidiary of the Company
pursuant to the definition of the term "Subsidiary."
"Authenticating Agent" has the meaning specified in Section
6.14.
"Authorized Newspaper" means a newspaper or financial journal
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.
"Bearer Security" means any Debt Security (with or without
Coupons), in the form established pursuant to Section 2.01, which is
payable to bearer (including any Global Note payable to bearer) and
title to which passes by delivery only, but does not include any
Coupons.
"Board of Directors" means either the board of directors of
the Company, or any committee of that board
<PAGE> 12
3
duly authorized to act hereunder or any director or directors and/or
officer or officers of the Company to whom that board or committee
shall have delegated its authority.
"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 3.01.
"CEDEL" means Cedel S.A.
"Closing Price" of the Common Stock means the last reported
sale price of such stock as reported by the National Association of
Securities Dealers Automated Quotation System (NASDAQ), or in case no
such sale takes place on such day, the average of the closing bid and
asked prices as reported by NASDAQ, or if such stock is not so
reported, the average of the closing bid and asked prices as furnished
by any member of the National Association of Securities Dealers, Inc.,
selected from time to time by the Company for that purpose.
"Code" means the Internal Revenue Code of 1986, as amended
and as in effect on the date hereof.
"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
3.04(b).
"Common Stock" means the class of Common Stock, par value
$2.00 per share, of the Company authorized at the date of this
Indenture as originally signed or any other class of stock resulting
from successive changes or reclassifications of such Common Stock and
which does not have any priority in the payment of dividends or upon
liquidation over any other class of stock and which is not subject to
redemption by the Company; provided that if Debt Securities
convertible into
<PAGE> 13
4
Common Stock are outstanding at the time of such successive changes or
reclassifications and there shall be more than one such resulting
class of stock, the shares of each resulting class then so issuable
shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all
such reclassifications.
"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 any two
of the Chairman, a Vice Chairman, the President, the Chief Financial
Officer, an Executive Vice President, the Treasurer, the Controller or
the Secretary of the Company, and delivered to the Trustee.
"Component Currency" has the meaning specified in Section
3.10(i).
"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 and from time to time authorize one or more
Persons to act as Conversion Agent in addition to or in place of the
Trustee with respect to any series of Debt Securities issued under
this Indenture.
"Conversion Date" has the meaning specified in Section 3.10(e).
"Conversion Event" means the cessation of (i) a Foreign
Currency to be used both by the government of the country which issued
such Currency and for the settlement of transactions by public
institutions of or within the international banking community, (ii)
the ECU to be used both within the European Monetary System and for
the settlement of transactions by public institutions of or within the
European Communities or (iii) any Currency unit other than the ECU to
be used for the purposes for which it was established.
"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, as specified pursuant to Section 3.01 with respect to
such series, as such price may
<PAGE> 14
5
be adjusted from time to time in accordance with Section 17.03.
"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 Two International Place,
Boston, Massachusetts 02110.
"Corporation" includes corporations, associations, companies
(including joint stock companies and limited liability companies) and
business trusts.
"Coupon" means any interest coupon appertaining to any Debt
Security.
"Coupon Security" means any Bearer Security authenticated and
delivered with one or more Coupons appertaining thereto.
"Currency" means Dollars or Foreign Currency or Currency unit.
"Currency Determination Agent" means the New York Clearing
House bank, if any, from time to time selected by the Company pursuant
to Section 3.01; provided that such agent shall accept such
appointment in writing and the terms of such appointment shall be
acceptable to the Company and shall, in the opinion of the Company and
the Trustee at the time of such appointment, require such agent to
make the determinations required by this Indenture by a method
consistent with the method provided in this Indenture for the making
of such decision or determination.
"Current Market Price" on any date means 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 17.03(3), 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 17.03(3) (or if such date shall not be a Trading Day, on the
Trading Day immediately preceding such date).
"Currency unit" means a composite currency or currency unit
the value of which is determined by reference to the value of the
currencies of any group of countries.
<PAGE> 15
6
"Debt Securities" has the meaning stated in the first recital
of this Indenture and more particularly means any Debt Securities
(including any Global Notes) authenticated and delivered under this
Indenture.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Discharged" has the meaning specified in Section 15.02.
"Discount Security" means any Debt Security which is issued
with "original issue discount" within the meaning of Section 1273(a)
of the Code and the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit 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.
"Dollar Equivalent of the Currency unit" has the meaning
specified in Section 3.10(h).
"Dollar Equivalent of the Foreign Currency" has the meaning
specified in Section 3.10(g).
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 3.10(i).
"Euro-clear Operator" means Morgan Guaranty Trust Company of
New York, Brussels office, or its successor as operator of the
Euro-clear System.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy
Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of
the European Communities.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Date" has the meaning specified in Section 3.04(b).
"Exchange Rate Officer's Certificate" means a telex or a
certificate setting forth (i) the applicable Market Exchange Rate and
(ii) the Dollar, Foreign Currency or
<PAGE> 16
7
Currency unit amounts of principal, premium, if any, and any interest
respectively (on an aggregate basis and on the basis of a Debt
Security having the lowest denomination principal amount determined in
accordance with Section 3.02 in the relevant Currency or Currency
unit), payable on the basis of such Market Exchange Rate sent (in the
case of a telex) or signed (in the case of a certificate) by the
Treasurer or any Assistant Treasurer of the Company.
"Fixed Rate Security" means a Debt Security which provides for
the payment of interest at a fixed rate.
"Floating Rate Security" means a Debt Security which provides
for the payment of interest at a variable rate determined periodically
by reference to an interest rate index or any other index specified
pursuant to Section 3.01.
"Foreign Currency" means a currency issued by the government
of any country other than the United States.
"Global Note" means a Registered or Bearer Security evidencing
all or part of a series of Debt Securities, including, without
limitation, any temporary or permanent Global Note.
"Holder" means, with respect to a Registered Security, the
Registered Holder, and with respect to a Bearer Security or a Coupon,
the bearer thereof.
"Indebtedness" means (1) any liability of any Person (a) for
borrowed money, or (b) evidenced by a bond, note, debenture or similar
instrument (including purchase money obligations but excluding Trade
Payables), or (c) for the payment of money relating to a lease that is
required to be classified as a capitalized lease obligation in
accordance with generally accepted accounting principles, or (d)
preferred or preference stock of a Subsidiary of the Company held by
Persons other than the Company or a Subsidiary of the Company; (2) any
liability of others described in the preceding clause (1) that the
Person has guaranteed, that is recourse to such Person or that is
otherwise its legal liability; and (3) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (1) and (2) above.
"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 3.01.
<PAGE> 17
8
The term "interest," when used with respect to a Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity, and, when used with respect to a
Bearer Security, includes any additional amounts payable on such
Bearer Security, if so provided pursuant to Section 3.01.
"Interest Payment Date" with respect to any Debt Security
means the Stated Maturity of an installment of interest on such Debt
Security.
"Market Exchange Rate" means (i) for any conversion involving
a Currency unit on the one hand and Dollars or any Foreign Currency on
the other, the exchange rate between the relevant Currency unit and
Dollars or such Foreign Currency calculated for noon, New York time,
on the Valuation Date by the method specified pursuant to Section 3.01
for the securities of the relevant series, (ii) for any conversion of
Dollars into any Foreign Currency, the noon (New York City time)
buying rate for such Foreign Currency for cable transfers quoted in
New York City as certified for customs purposes by the Federal Reserve
Bank of New York and (iii) for any conversion of one Foreign Currency
into Dollars or another Foreign Currency, the spot rate at noon local
time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which
conversion is being made could be purchased with the Foreign Currency
from which conversion is being made from major banks located in either
New York City, London or any other principal market for Dollars or
such purchased Foreign Currency. In the event of the unavailability
of any of the exchange rates provided for in the foregoing clauses
(i), (ii) and (iii) the Company, shall use, in its sole discretion and
without liability on its part, such quotation of the Federal Reserve
Bank of New York as of the most recent available date, or quotations
from one or more major banks in New York City, London or other
principal market for such Currency or Currency unit in question, or
such other quotations as the Company shall deem appropriate, in its
sole discretion and without liability on its part. Unless otherwise
specified by the Currency Determination Agent, if any, or if there
shall not be a Currency Determination Agent, then by the Trustee, if
there is more than one market for dealing in any Currency or Currency
unit by reason of foreign exchange regulations or otherwise, the
market to be used in respect of such Currency or Currency unit shall
be that, as determined by the Currency Determination Agent, or if
there shall not be a Currency Determination Agent, then by the
Trustee, in its sole discretion and without liability on its part,
upon which a nonresident issuer of securities designated in such
Currency or Currency unit would purchase such Currency or Currency
unit in order to make payments in respect of such securities.
<PAGE> 18
9
"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 at the option of the
Holder thereof or otherwise.
"Officers' Certificate" means a certificate signed by any two
of the Chairman, a Vice Chairman, the President, the Chief Financial
Officer, an Executive Vice President, the Treasurer, the Controller or
the 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)
and who shall be reasonably satisfactory to the Trustee, which is
delivered to the Trustee.
"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 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 and any
Coupons thereto pertaining;provided, however, that if such Debt
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Debt Securities which have been paid pursuant to
Section 3.06 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 reasonably
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;
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
<PAGE> 19
10
such other obligor shall be disregarded and deemed not to be
Outstanding, 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 5.02 and the
principal amount of a Debt Security denominated in a Foreign Currency
that shall be deemed to be Outstanding for such purpose shall be the
amount calculated pursuant to Section 3.10(k).
"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 3.01.
"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 3.04(b).
"Person" means any individual, Corporation, partnership, joint
venture, association, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"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 3.01.
"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 3.06 in lieu of a mutilated, lost, destroyed
or stolen Debt Security or a Debt Security to which a
<PAGE> 20
11
mutilated, lost, destroyed or stolen Coupon appertains shall be deemed
to evidence the same debt as the mutilated, lost, destroyed or stolen
Debt Security or the Debt Security to which the mutilated, lost,
destroyed or stolen Coupon appertains, as the case may be.
"Redemption Date" means the date fixed for redemption of any
Debt Security pursuant to this Indenture which, in the case of a
Floating Rate Security, unless otherwise specified pursuant to Section
3.01, shall be an Interest Payment Date only.
"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 of the
Maturity thereof pursuant to Section 5.02 or any other redemption
specified pursuant to Section 3.01, 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.
"Registered Holder" means the Person in whose name a
Registered Security is registered in the Security Register.
"Registered Security" means any Debt Security in the form
established pursuant to Section 2.01 which is registered as to
principal and interest in the Security Register.
"Regular Record Date" for the interest payable on the
Registered Securities of any series on any Interest Payment Date means
the date specified for the purpose pursuant to Section 3.01 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 in its corporate trust department or
similar group administering the trusts hereunder 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 3.05(a).
"Senior Indebtedness" means the principal of (and premium, if
any) and unpaid interest on (i) Indebtedness of the Company, whether
outstanding on the date of this Indenture or thereafter created,
incurred, assumed or guaranteed, for money borrowed (other than the
Indebtedness evidenced by the Debt Securities of any series), unless
in the instrument creating or evidencing the same or pursuant
<PAGE> 21
12
to which the same is outstanding it is provided that such Indebtedness
is not senior or prior in right of payment to the Debt securities or
is pari passu or subordinate by its terms in right of payment to the
Debt Securities, and (ii) renewals, extensions and modifications of
any such Indebtedness.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07.
"Specified Amount" has the meaning specified in Section
3.10(i).
"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 or the Coupon,
if any, 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 any Corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the directors of such Corporation,
irrespective of whether or not, at the time, stock of any other class
or classes of such Corporation shall have or might have voting power
by reason of the happening of any contingency, is at the time,
directly or indirectly, owned or controlled by the Company or by one
or more Subsidiaries thereof, or by the Company and one or more
Subsidiaries thereof.
"temporary Global Note" shall have the meaning given such
term in Section 3.04(b).
"Trade Payables" means accounts payable or any other
indebtedness or monetary obligations to trade creditors created or
assumed in the ordinary course of business in connection with the
obtaining of materials or services.
"Trading Day" means, with respect to the Common Stock, a day
on which NASDAQ 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, "Trustee" as used with respect to the Debt Securities of any
series shall mean the Trustee with respect to Debt Securities of such
series.
<PAGE> 22
13
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
amended and as in force at the date as of which this instrument was
executed, except as provided in Section 11.05.
"United States" means the United States of America (including
the States and the District of Columbia), and its possessions, which
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa,
Wake Island and the Northern Mariana Islands.
"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 3.01 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, "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 15.02.
"U.S. Person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or
organized in or under the laws of the United States, or an estate or
trust the income of which is subject to United States Federal income
taxation regardless of its source.
"Valuation Date" has the meaning specified in Section 3.10(d).
"Vice President" includes with respect to the Company and the
Trustee, any Vice President of the Company or the Trustee, as the case
may be, whether or not designated by a number or word or words added
before or after the title "Vice President."
"Wholly-Owned Subsidiary" means a Subsidiary of which all of
the outstanding voting stock (other than directors' qualifying shares)
is at the time, directly or indirectly, owned by the Company, or by
one or more Wholly-Owned Subsidiaries of the Company or by the Company
and one or more Wholly-Owned Subsidiaries of the Company.
Section 1.02. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate
<PAGE> 23
14
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 12.02) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a
<PAGE> 24
15
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 1.04. 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,
(1) 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: Daniel
Golden, or
(2) 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 Indenture, to the
attention of its 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 1.05. Notice to Holders; Waiver.
When this Indenture provides for notice to Holders of any
event, (1) such notice shall be sufficiently given to Registered Holders
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to such Registered Holders as their names and
addresses appear in the Security Register, within the time prescribed, and (2)
such notice shall be sufficiently given to Holders of Bearer Securities or
Coupons (unless otherwise herein expressly provided) if published at least
twice in an Authorized Newspaper or Newspapers in The City of New York and, if
Debt Securities of such series are then listed on The Stock Exchange of the
United Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or
any other stock exchange located outside the United
<PAGE> 25
16
States and such stock exchange shall so require, in a daily newspaper or
financial journal in London or Luxembourg or in such other city or cities
specified pursuant to Section 3.01 or in any Debt Security on Business Days,
the first such publication to be not earlier than the earliest date and not
later than two Business Days prior to the latest date prescribed for the giving
of such notice; 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 3.01, shall be
sufficiently given if given in the manner specified pursuant to Section 3.01.
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 1.06. 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 duties imposed by the Trust
Indenture Act shall control.
<PAGE> 26
17
Section 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 1.08. 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 1.09. 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 1.10. 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 1.11. Governing Law.
This Indenture, the Debt Securities and the Coupons shall be
deemed to be contracts made and to be performed entirely in the State of New
York, and for all purposes shall be governed by and construed in accordance
with the laws of said State without regard to the conflicts of law rules of
said State.
Section 1.12. Legal Holidays.
Unless otherwise specified pursuant to Section 3.01 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 or the last date on which a
Holder has the right to convert Debt Securities of such series that are
convertible 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 or Coupons) payment of principal (and
premium, if any) or interest need not be made at such Place of Payment on such
date and such Debt Securities need not be converted on such date, but any such
payment may be made at such Place of Payment and such Debt Securities may be
converted, on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date, Redemption Date or at the Stated
Maturity or on such last
<PAGE> 27
18
day for conversion, 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 1.13. No Security Interest Created.
Nothing in this Indenture or in the Debt Securities or
Coupons, express or implied, shall be construed to constitute a security
interest or mortgage or other pledge of collateral under the Uniform Commercial
Code or similar legislation or real property laws, as now or hereafter enacted
and in effect in any jurisdiction where property of the Company or its
Subsidiaries is or may be located.
Section 1.14. Liability Solely Corporate.
No recourse shall be had for the payment of the principal of
(or premium, if any) or the interest on any Debt Securities or Coupons, or any
part thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement of this Indenture, against any incorporator,
or against any stockholder, officer or director, as such, past, present or
future, of the Company (or any incorporator, stockholder, officer or director
of any predecessor or successor corporation), either directly or through the
Company (or any such predecessor or successor corporation), whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Indenture and all the Debt Securities and Coupons are solely
corporate obligations, and that no personal liability whatsoever shall attach
to, or be incurred by, any such incorporator, stockholder, officer or director,
past, present or future, of the Company (or any incorporator, stockholder,
officer or director of any such predecessor or successor corporation), either
directly or indirectly through the Company or any such predecessor or successor
corporation, because of the indebtedness hereby authorized or under or by
reason of any of the obligations, covenants, promises or agreements contained
in this Indenture or in any of the Debt Securities or Coupons or to be implied
herefrom or therefrom; and that any such personal liability is hereby expressly
waived and released as a condition of, and as part of the consideration for,
the execution of this Indenture and the issue of Debt Securities; provided,
however, that nothing herein or in the Debt Securities or Coupons contained
shall be taken to prevent recourse to and the enforcement of the liability, if
any, of any stockholder or subscriber to capital stock upon or in respect of
the shares of capital stock not fully paid.
<PAGE> 28
19
ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally.
The Debt Securities and the Coupons, if any, of each series
shall be substantially in one of the forms (including global form) 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 and Coupons as
conclusively evidenced by their execution of such Debt Securities and Coupons.
If the form of a series of Debt Securities or Coupons (or any Global Note) 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 3.03 for the authentication and
delivery of such Debt Securities (or any such Global Note) or Coupons.
Unless otherwise specified as contemplated by Section 3.01,
Debt Securities in bearer form (other than in global form) shall have Coupons
attached.
The definitive Debt Securities and Coupons, if any, 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 and Coupons, as conclusively evidenced by their execution of such
Debt Securities and Coupons.
Section 2.02. Form of Trustee's Certificate of Authentication.
The form of the Trustee's certificate of authentication to be
borne by the Debt Securities shall be substantially as follows:
<PAGE> 29
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the series of Debt Securities issued under the
within mentioned Indenture.
State Street Bank and Trust Company,
as Trustee
Dated: By_________________________________
Authorized Signatory
Section 2.03. Securities in Global Form.
If any Debt Security of a series is issuable in global form,
the Global Note so issued 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 1.02.
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.
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued from time to time in one or
more series. There shall be established in or pursuant to a Board Resolution
and (subject to Section 3.03) 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:
(1) 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);
<PAGE> 30
21
(2) the limit, if any, upon 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
3.04, 3.05, 3.06, 11.06 or 13.07);
(3) the percentage of the principal amount at which the Debt
Securities 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 thereof or the method by
which such portion shall be determined;
(4) 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 of determination thereof) 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 and set forth in the Debt Securities of the series issued from
time to time);
(5) the rate or rates (or the method of determination
thereof) at which the Debt Securities of the series shall bear
interest, if any, and the dates from which such interest shall accrue
(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 Interest Payment Dates on which
such interest shall be payable (or the method of determination
thereof), and, in the case of Registered Securities, the Regular
Record Dates for the interest payable on such Interest Payment Dates
and, in the case of Floating Rate Securities, the notice, if any, to
Holders regarding the determination of interest and the manner of
giving such notice;
(6) the place or places where the principal of (and premium,
if any) and interest on Debt Securities of the series shall be
payable; 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 3.07; the extent, if
any, to which the provisions of the last sentence of Section 12.01
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;
<PAGE> 31
22
(7) the obligation, if any, of the Company to redeem, repay
or purchase Debt Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of
the Holder and the period or periods within which or the dates on
which, the prices at which and the terms and conditions upon which
Debt Securities of the series shall be redeemed, repaid or purchased,
in whole or in part, pursuant to such obligation;
(8) the right, if any, of the Company to redeem Debt
Securities, in whole or in part, 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 Debt
Securities of the series may be redeemed, if any, in whole or in part,
at the option of the Company or otherwise;
(9) if the coin or Currency in which the Debt Securities
shall be issuable is in Dollars, the denominations of such Debt
Securities if other than denominations of $1,000 and any integral
multiple thereof (except as provided in Section 3.04);
(10) 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 5.02;
(11) provisions, if any, for the defeasance of the Debt
Securities of such series pursuant to the legal defeasance option (as
defined in Section 15.02), or certain of the Company's obligations
with respect thereto pursuant to the covenant defeasance option (as
defined in Section 15.02);
(12) whether Debt Securities of the series are to be issued
as Registered Securities or Bearer Securities or both, and, if Bearer
Securities are issued, whether Coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for
Registered Securities of the series, as provided in Section 3.05(b) or
otherwise and the circumstances under which and the place or places at
which any such exchanges, if permitted, may be made;
(13) whether provisions for payment of additional amounts or
tax redemptions shall apply and, if such provisions shall apply, such
provisions; and, if Bearer Securities of the series are to be issued,
whether a procedure other than that set forth in Section 3.04(b) shall
apply and, if so, such other procedure, and if the procedure
<PAGE> 32
23
set forth in Section 3.04(b) shall apply, the forms of certifications
to be delivered under such procedure;
(14) if other than Dollars, the Foreign Currency or
Currencies or Currency unit in which Debt Securities of the series
shall be denominated or in which payment of the principal of (and/or
premium, if any) and/or interest on the Debt Securities of the series
may be made, and the particular provisions applicable thereto and, if
applicable, the amount of Debt Securities of the series which entitles
the Holder of a Debt Security of the series or its proxy to one vote
for purposes of Section 9.06;
(15) if the principal of (and premium, if any) or interest on
Debt Securities of the series are to be payable, at the election of
the Company or a Holder thereof, in a Currency other than that in
which the Debt Securities are denominated or payable without such
election, in addition to or in lieu of the provisions of Section 3.10,
the period or periods within which and the terms and conditions upon
which, such election may be made and the time and the manner of
determining the exchange rate or rates between the Currency or
Currencies in which the Debt Securities are denominated or payable
without such election and the Currency or Currencies in which the Debt
Securities are to be paid if such election is made;
(16) the date as of which any Debt Securities of the series
shall be dated, if other than as set forth in Section 3.03;
(17) if the amount of payments of principal of (and premium,
if any) or interest 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;
(18) if the Debt Securities of the series are denominated or
payable in a Foreign Currency, any other terms concerning the payment
of principal of (and premium, if any) or any interest on such Debt
Securities (including the Currency or Currencies of payment thereof);
(19) the designation of the original Currency Determination
Agent, if any;
(20) the applicable Overdue Rate, if any;
(21) if the Debt Securities of the series do not bear
interest, the applicable dates for purposes of Section 7.01;
<PAGE> 33
24
(22) any addition to, or modification or deletion of, any
Events of Default or covenants provided for with respect to Debt
Securities of the series;
(23) if Bearer Securities of the series are to be issued, (x)
whether interest in respect of any portion of a temporary Debt
Security in global form (representing all of the Outstanding Bearer
Securities of the series) payable in respect of any Interest Payment
Date prior to the exchange of such temporary Debt Security for
definitive Debt Securities of the series shall be paid to any clearing
organization with respect to the portion of such temporary Debt
Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date, (y) the terms upon which interests in such temporary
Debt Security in global form may be exchanged for interests in a
permanent Global Note or for definitive Debt Securities of the series
and the terms upon which interests in a permanent Global Note, if any,
may be exchanged for definitive Debt Securities of the series and (z)
the cities in which the Authorized Newspapers designated for the
purposes of giving notices to Holders are published;
(24) 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 if the Debt Securities of the series
are issuable only as Registered Securities, the manner in which and
the circumstances under which Global Notes representing Debt
Securities of the series may be exchanged for Registered Securities in
definitive form, if other than, or in addition to, the manner and
circumstances specified in Section 3.04(c);
(25) whether the Debt Securities of the series will be
convertible into shares of Common Stock, and if so, the terms and
conditions, which may be in addition to or in lieu of the provisions
of Article Seventeen, upon which such Debt Securities will be so
convertible, including the Conversion Price and the conversion period;
(26) the designation, if any, of the U.S. Depositary; and the
designation of any trustees (other than the Trustee), depositaries,
Authenticating Agents, Paying Agents, Security Registrars, or any
other agents with respect to the Debt Securities of such series;
(27) if the Debt Securities of such series are to be issuable
in definitive form (whether upon original issuance or upon exchange of
a temporary Debt Security of such
<PAGE> 34
25
series) only upon receipt of certain certificates or other documents
or satisfaction of other conditions, the form and terms of such
certificates, documents or conditions; and
(28) any other terms of the series (which other terms shall
not be inconsistent with the provisions of this Indenture).
All Debt Securities of any one series and Coupons, if any,
shall be substantially identical to all other debt securities of such series
except as to denomination, rate of interest, Stated Maturity and the date from
which interest, if any, shall accrue, which, as set forth above, may be
determined by the Company from time to time as to Debt Securities of a series
if so provided in or established pursuant to the authority granted in a Board
Resolution or in any such indenture supplemental hereto, and except as may
otherwise be provided in or pursuant to such Board Resolution and (subject to
Section 3.03) 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.
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 3.02. Denominations.
In the absence of any specification pursuant to Section 3.01
with respect to the Debt Securities of any series, the Debt Securities of such
series shall be issuable only as Registered Securities in denominations of
$1,000 and any integral multiple thereof and shall be payable only in Dollars.
Section 3.03. Execution, Authentication, Delivery and Dating.
The Debt Securities and the Coupons, if any, of any series
shall be executed on behalf of the Company by its Chairman, a Vice Chairman,
its President, one of its Executive 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 and Coupons 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
<PAGE> 35
26
to hold such offices prior to the authentication and delivery of such Debt
Securities and Coupons or did not hold such offices at the date of such Debt
Securities and Coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debt Securities, with
appropriate Coupons, if any, 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 Coupons and the Trustee
in accordance with the Company Order shall authenticate and deliver such Debt
Securities and Coupons; provided, however, that, in connection with its sale
during the "restricted period" (as defined in Section 1.163-5(c)(2)(i)(D)(7) of
the United States Treasury Regulations), no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided,
further, that a Bearer Security (other than a temporary Global Note in bearer
form) may be delivered outside the United States in connection with its
original issuance only if the Person entitled to receive such Bearer Security
shall have furnished to the Euro-clear Operator or to CEDEL a certificate
substantially in the form set forth in Exhibit A to this Indenture and if the
Euro-clear Operator or CEDEL has furnished the Trustee a certificate
substantially in the form set forth in Exhibit B. 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 and other matters which are subject to variation, 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 3.04, the notation
by the Common Depositary 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.
Except as permitted by Section 3.06 or 3.07, the Trustee shall not authenticate
and deliver any Bearer Security unless all Coupons for interest then matured
have been detached and cancelled.
The Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon, prior to the
authentication and delivery of the Debt Securities and Coupons of such series,
(i) the supplemental indenture or the Board Resolution by or pursuant to which
the form and terms of such Debt Securities and Coupons have been approved, (ii)
the certificates and opinions required pursuant to Section 1.02 and (iii) one
or more Opinions of Counsel substantially to the effect that:
<PAGE> 36
27
(1) all instruments furnished by the Company to the Trustee
in connection with the authentication and delivery of such Debt
Securities and Coupons conform to the requirements of this Indenture
and constitute sufficient authority hereunder for the Trustee to
authenticate and deliver such Debt Securities and Coupons;
(2) the forms and terms of such Debt Securities and Coupons
have been established in conformity with the provisions of this
Indenture;
(3) in the event that the forms or terms of such Debt
Securities and Coupons have been established in a supplemental
indenture, the execution and delivery of such supplemental indenture
has been duly authorized by all necessary corporate action of the
Company, such supplemental indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, is a valid and binding obligation
enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(4) the execution and delivery of such Debt Securities and
Coupons have been duly authorized by all necessary corporate action of
the Company and such Debt Securities and Coupons have been duly
executed by the Company and, assuming due authentication by the
Trustee and delivery by the Company, are valid and binding obligations
enforceable against the Company in accordance with their terms,
entitled to the benefit of the Indenture, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and subject to such other exceptions as counsel
shall reasonably request and as to which the Trustee shall not
reasonably object; and
(5) to the best of such counsel's knowledge, all governmental
consents, authorizations and approvals which are required for the
execution and delivery of the Indenture and the Debt Securities under
all applicable Louisiana laws, if any, have been received other than
such as may be required by the securities or blue sky laws of the
various states in connection with the offer and sale of the Debt
Securities.
For purposes of this opinion, such counsel may rely as to
factual matters upon certificates or written statements from officers or other
appropriate representatives of the Company or
<PAGE> 37
28
upon certificates of public officials and such opinion may contain assumptions,
limitations, exceptions and restrictions which are reasonably satisfactory to
the Trustee and its counsel.
The Trustee shall not be required to authenticate such Debt
Securities and Coupons if the issuance of such Debt Securities and Coupons
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 Registered Security shall be dated the date of its
authentication. Each Bearer Security (including any temporary or permanent or
other definitive Bearer Security in global form) shall be dated as of the date
of original issuance of the first Debt Security of such series to be issued,
except as otherwise provided pursuant to Section 3.01 with respect to the
Bearer Securities of any series.
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 3.08 together with a written statement
(which need not comply with Section 1.02) 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 3.04. Temporary Debt Securities; Exchange of
Temporary Global Notes for Definitive Bearer Securities; Global Notes
Representing Registered Securities.
(a) Pending the preparation of definitive Registered
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Registered Securities which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination for Registered Securities of such series,
substantially of the tenor of the definitive Registered Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Registered
Securities may determine, as conclusively evidenced by their execution of
<PAGE> 38
29
such Registered Securities. Every such temporary Registered 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 effect, as the definitive Registered Securities in lieu of which they are
issued. In the case of any series issuable as Bearer Securities, such
temporary Debt Securities may be in global form, representing such of the
Outstanding Debt Securities of such series as shall be specified therein.
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 3.05
in connection with a transfer. Upon surrender for cancellation of any one or
more temporary Debt Securities of any series (accompanied by any unmatured
Coupons), 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; provided, however, that no definitive
Bearer Security shall be delivered in exchange for a temporary Registered
Security; and provided, further, that a definitive Bearer Security (including a
permanent Bearer Security in global form) shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set forth in
Section 3.03. Until so exchanged, the temporary Registered Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Registered Securities of such series.
(b) Unless otherwise specified pursuant to Section 3.01, all
Bearer Securities of a series shall be initially issued in the form of a single
temporary Bearer Security in global form (a "temporary Global Note"). The
Company shall execute, and upon Company Order the Trustee shall authenticate,
any temporary Global Note and any permanent Bearer Security in global form (as
described below, a "permanent Global Note") upon the same conditions and in
substantially the same manner, and with the same effect, as definitive Bearer
Securities, and the temporary or permanent Global Note, as the case may be,
shall, unless otherwise specified therein, be delivered by the Trustee to the
London office of a depositary or common depositary (the "Common Depositary"),
for the benefit of the Euro-clear Operator or CEDEL, as the case may be, for
credit to the account of the
<PAGE> 39
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Company (in the case of sales of Bearer Securities by the Company directly to
investors) or the managing underwriter (in the case of sales of Bearer
Securities by the Company to underwriters) or such other accounts as the
Company or the managing underwriter, respectively, may direct.
On or after the date specified in or determined pursuant to
the terms of any temporary Global Note which (subject to any applicable laws
and regulations) shall be at least 40 days after the issue date of a temporary
Global Note (the "Exchange Date"), the Debt Securities represented by such
temporary Global Note may be exchanged for definitive Debt Securities (subject
to the second succeeding paragraph) or Debt Securities to be represented
thereafter by one or more permanent Global Notes in definitive form without
Coupons. On or after the Exchange Date such temporary Global Note shall be
surrendered by the Common Depositary to the Trustee (or such other agent as is
specified for the purpose pursuant to Section 3.01), as the Company's agent for
such purpose, at such place specified outside the United States pursuant to
Section 3.01 and following such surrender, the Trustee (or such other agent)
shall (1) endorse the temporary Global Note to reflect the reduction of its
principal amount by an equal aggregate principal amount of such Debt Security,
(2) endorse the applicable permanent Global Note, if any, to reflect the
initial amount, or an increase in the amount of Debt Securities represented
thereby, (3) manually authenticate such definitive Debt Securities (including
any permanent Global Note), (4) deliver such definitive Debt Securities to the
Holder thereof or, if such definitive Debt Security is a permanent Global Note,
deliver such permanent Global Note to the Common Depositary to be held outside
the United States for the accounts of the Euro-clear Operator or CEDEL, as the
case may be, for credit to the respective accounts at Euro-clear Operator or
CEDEL, as the case may be, designated by or on behalf of the beneficial owners
of such Debt Securities (or to such other accounts as they may direct) and (5)
redeliver such temporary Global Note to the Common Depositary, unless such
temporary Global Note shall have been cancelled in accordance with Section 3.08
hereof; provided, however, that, unless otherwise specified in such temporary
Global Note, upon such presentation by the Common Depositary, such temporary
Global Note shall be accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by the Euro-clear Operator, as to the portion of
such temporary Global Note held for its account then to be exchanged for
definitive Debt Securities (including any permanent Global Note), and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL,
as to the portion of such temporary Global Note held for its account then to be
exchanged for definitive Debt Securities (including any permanent Global Note),
each substantially in the form set forth in Exhibit B to this Indenture. Each
certificate substantially in the form of Exhibit B hereto of the Euro-clear
Operator or CEDEL, as the case may be, shall be based on certificates of the
account holders listed in the records of the Euro-clear Operator or CEDEL, as
the case may
<PAGE> 40
31
be, as being entitled to all or any portion of the applicable temporary Global
Note. An account holder of the Euro-clear Operator or CEDEL, as the case may
be, desiring to effect the exchange of an interest in a temporary Global Note
for an interest in definitive Debt Securities (including any permanent Global
Note) shall instruct the Euro-clear Operator or CEDEL, as the case may be, to
request such exchange on its behalf and shall deliver to the Euro-clear
Operator or CEDEL, as the case may be, a certificate substantially in the form
of Exhibit A hereto and dated no earlier than 10 days prior to the Exchange
Date. Until so exchanged, temporary Global Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Debt
Securities (including any permanent Global Note) of the same series
authenticated and delivered hereunder, except as to payment of interest, if
any.
The delivery to the Company, its agent or the Trustee by the
Euro-clear Operator or CEDEL of any certificate substantially in the form of
Exhibit B hereto may be relied upon by the Company, its agent and the Trustee
as conclusive evidence that a corresponding certificate or certificates has or
have been delivered to the Euro-clear Operator or CEDEL, as the case may be,
pursuant to the terms of this Indenture.
On or prior to the Exchange Date, the Company shall deliver to
the Trustee (or such other agent as may be specified as the Company's agent for
such purpose pursuant to Section 3.01) definitive Debt Securities in an
aggregate principal amount equal to the principal amount of such temporary
Global Note, executed by the Company. At any time, on or after the Exchange
Date, upon 30 days' notice to the Trustee (and such other agents as may be
specified for such purpose pursuant to Section 3.01) by the Euro-clear Operator
or CEDEL, as the case may be, acting at the request of or on behalf of the
beneficial owner, a Debt Security represented by a temporary Global Note or a
permanent Global Note, as the case may be, may be exchanged, in whole or from
time to time in part, for definitive Debt Securities without charge and the
Trustee (or such agent) shall authenticate and deliver, in exchange for each
portion of such temporary Global Note or such permanent Global Note, an equal
aggregate principal amount of definitive Debt Securities of the same series of
authorized denominations and of a like Stated Maturity and with like terms and
conditions, as the portion of such temporary Global Note or such permanent
Global Note to be exchanged, which, unless the Debt Securities of the series
are not issuable both as Bearer Securities and as Registered Securities, as
contemplated by Section 3.01, shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; provided, however, that definitive Bearer Securities
shall be delivered in exchange for a portion of the temporary Global Note or
the permanent Global Note only in compliance with the requirements of the
second preceding paragraph. On or prior to the forty-fifth day following
receipt by the Trustee (and such agent as may be
<PAGE> 41
32
specified as the Company's agent for such purpose pursuant to Section 3.01) of
such notice with respect to a Debt Security, or, if such day is not a Business
Day, the next succeeding Business Day, the temporary Global Note or the
permanent Global Note, as the case may be, shall be surrendered by the Common
Depositary to the Trustee (or such other agent as may be specified as the
Company's agent for such purpose pursuant to Section 3.01), as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in part,
for definitive Debt Securities without charge following such surrender, upon
the request of the Euro-clear Operator or CEDEL, as the case may be, and the
Trustee (or such agent) shall (1) endorse the applicable temporary Global Note
or the permanent Global Note to reflect the reduction of its principal amount
by the aggregate principal amount of such Debt Security, (2) cause the terms of
such Debt Security and Coupons, if any, to be entered on a definitive Debt
Security, (3) manually authenticate such definitive Debt Security, and (4) if a
Bearer Security is to be delivered, deliver such definitive Debt Security
outside the United States to the Euro-clear Operator or CEDEL, as the case may
be, for or on behalf of the beneficial owner thereof, in exchange for a portion
of such temporary Global Note or the permanent Global Note.
Unless otherwise specified in such temporary Global Note or
the permanent Global Note, any such exchange shall be made free of charge to
the beneficial owners of such temporary Global Note or the permanent Global
Note, except that a Person receiving definitive Debt Securities must bear the
cost of insurance, postage, transportation and the like in the event that such
Person does not take delivery of such definitive Debt Securities in person at
the offices of the Euro-clear Operator or CEDEL. Definitive Debt Securities in
bearer form to be delivered in exchange for any portion of a temporary Global
Note or the permanent Global Note shall be delivered only outside the United
States. Notwithstanding the foregoing, in the event of redemption or
acceleration of all or any part of a temporary Global Note prior to the
Exchange Date, a permanent Global Note or definitive Bearer Securities, as the
case may be, will not be issuable in respect of such temporary Global Note or
such portion thereof, and payment thereon will instead be made as provided in
such temporary Global Note.
Until exchanged in full as hereinabove provided, any temporary
Global Note or the permanent Global Note shall in all respects be entitled to
the same benefits under this Indenture as definitive Debt Securities of the
same series and tenor authenticated and delivered hereunder, except that,
unless otherwise specified as contemplated by Section 3.01, interest payable on
such temporary Global Note on an Interest Payment Date for Debt Securities of
such series occurring prior to the applicable Exchange Date shall be payable to
the Euro-clear Operator or CEDEL on such Interest Payment Date upon delivery by
the Euro-clear Operator or CEDEL to the Trustee of a certificate or
certificates substantially in the form set forth in Exhibit B
<PAGE> 42
33
to this Indenture, for credit without further interest on or after such
Interest Payment Date to the respective accounts of the Persons who are the
beneficial owners of such temporary Global Note on such Interest Payment Date
and who have each delivered to the Euro-clear Operator or CEDEL, as the case
may be, a certificate substantially in the form set forth in Exhibit A to this
Indenture.
Any definitive Bearer Security authenticated and delivered by
the Trustee in exchange for a portion of a temporary Global Note or the
permanent Global Note shall not bear a coupon for any interest which shall
theretofore have been duly paid by the Trustee to the Euro-clear Operator or
CEDEL, or by the Company to the Trustee in accordance with the provisions of
this Section 3.04.
With respect to Exhibits A and B to this Indenture, the
Company may, in its discretion and if required or desirable under applicable
law, substitute one or more other forms of such Exhibits for such Exhibits,
eliminate the requirement that any or all certificates be provided, or change
the time that any certificate may be required, provided that such substitute
form or forms or notice of elimination or change of such certification
requirement have theretofore been delivered to the Trustee (and any agent of
the Company appointed pursuant to Section 3.01 and referred to above) with a
Company Request and such form or forms, elimination or change is reasonably
acceptable to the Trustee (and any such agent).
(c) If the Company shall establish pursuant to Section 3.01
that the Registered 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 3.03 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 to the following effect: "This Debt Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary, unless and until this Debt Security
is exchanged in whole or in part for Debt Securities in definitive form."
Notwithstanding any other provision of this Section or Section
3.05, unless and until it is exchanged in whole or in part for Registered
Securities in definitive form, a Global Note representing all or a portion of
the Registered Securities of a
<PAGE> 43
34
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,
Registered Securities of such series in definitive form 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.
The Company may at any time and in its sole discretion
determine that the Registered 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, Registered 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 Registered 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, Registered 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 3.01 with
respect to Registered Securities of a series, the U.S. Depositary for such
series of Registered Securities may surrender
<PAGE> 44
35
a Global Note for such series of Debt Securities in exchange in whole or in
part for Registered 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
Registered 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 Registered Securities delivered to Holders thereof.
Upon the exchange of a Global Note for Registered 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 3.05. 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 Registered Securities and of transfers and
exchanges of Registered Securities. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Registered Securities and registering
transfers and exchanges of Registered Securities as herein provided; provided,
however, that the Company may appoint co-Security Registrars.
Upon surrender for registration of transfer of any Registered
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 Registered
Securities of the same series of like aggregate principal amount of such
denominations as are authorized for Registered Securities of such series and of
a like Stated Maturity and with like terms and conditions.
<PAGE> 45
36
Except as otherwise provided in Section 3.04 and this Section
3.05, at the option of the Holder, Registered Securities of any series may be
exchanged for other Registered 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 Registered Securities to be exchanged at such
office or agency. Whenever any Registered Securities are surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive.
(b) If and to the extent specified pursuant to Section 3.01,
the provisions of this Section 3.05(b) shall be applicable to Debt Securities
of any series which are Bearer Securities. At the option of the Holder
thereof, to the extent permitted by law, any Bearer Security of any series
which by its terms is registrable as to principal and interest may be exchanged
for a Registered Security of such series of like aggregate principal amount and
of a like Stated Maturity and with like terms and conditions upon surrender of
such Bearer Security at the Corporate Trust Office or at any other office or
agency of the Company designated pursuant to Section 3.01 for the purpose of
making any such exchanges. Any Coupon Security surrendered for exchange shall
be surrendered with all unmatured Coupons and any matured Coupons in default
attached thereto. If the Holder of a Bearer Security is unable to produce any
such unmatured Coupon or Coupons or matured Coupon or Coupons in default, such
exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company in an amount equal to the face amount of such
missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Bearer Security shall
surrender to any Paying Agent any such missing Coupon in respect of which such
a payment shall have been made, such Holder shall be entitled to receive the
amount of such payment; provided, however, that except as otherwise provided in
Section 12.03, interest represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series and of a like Stated Maturity and
with like terms and conditions after the close of business at such office or
agency on (i) any Regular Record Date and before the opening of business at
such office or agency on the relevant Interest Payment Date, or (ii) any
Special Record Date and before the opening of business at such office or agency
on the related proposed date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the Coupon relating to such Interest
Payment Date or proposed date for payment, as the case may be (or, if such
Coupon is so surrendered with such Bearer Security, such Coupon shall be
returned to the
<PAGE> 46
37
Person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture. The Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Security or Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer
Securities for Registered Securities will be subject to the provisions of
United States income tax laws and regulations applicable to Debt Securities in
effect at the time of such exchange.
(c) Except as otherwise specified pursuant to Section 3.01,
in no event may Registered Securities, including Registered Securities received
in exchange for Bearer Securities, be exchanged for Bearer Securities.
(d) 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 Registered 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 attorney duly authorized in writing.
No service charge will be made for any transfer or exchange of
Debt Securities except as provided in Section 3.04(b) or 3.06. 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 13.03 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.
<PAGE> 47
38
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt
Securities.
If (i) any mutilated Debt Security or any mutilated Coupon
with the Coupon Security to which it appertains (and all unmatured Coupons
attached thereto) is surrendered to the Trustee, or (ii) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Debt Security or any Coupon, 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 receives notice that such Debt Security or Coupon 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 or in exchange for the
Coupon Security to which such mutilated, destroyed, lost or stolen Coupon
appertained, 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, and, in the case of a Coupon Security, with such
Coupons attached thereto that neither gain nor loss in interest shall result
from such exchange or substitution.
In case any such mutilated, destroyed, lost or stolen Debt
Security or Coupon 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 or Coupon in accordance with its terms;
provided, however, that principal of (and premium, if any) and any interest on
Bearer Securities shall, except as otherwise provided in Section 12.03, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 3.01 or except as
otherwise provided in this Section 3.06, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the Coupons
appertaining thereto.
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 or Coupon 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 or Coupon 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 or Coupons of that series duly issued
hereunder.
<PAGE> 48
39
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 or Coupons.
Section 3.07. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Registered 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 Registered 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
Registered Security upon any transfer or exchange subsequent to the Regular
Record Date. Unless otherwise specified as contemplated by Section 3.01 with
respect to the Debt Securities of any series, payment of interest on Registered
Securities shall be made at the place or places specified pursuant to Section
3.01 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 3.01, by wire transfer to an account
designated by the Registered Holder.
(b) Interest on any Coupon Security which is payable and is
punctually paid or duly provided for on any Interest Payment Date shall be paid
to the Holder of the Coupon which has matured on such Interest Payment Date
upon surrender of such Coupon on such Interest Payment Date at an office or
agency of the Company in a Place of Payment located outside the United States
specified pursuant to Section 3.01.
Interest on any Bearer Security (other than a Coupon Security)
which is payable and is punctually paid or duly provided for on any Interest
Payment Date shall be paid to the Holder of the Bearer Security upon
presentation of such Bearer Security and notation thereon on such Interest
Payment Date at an office or agency of the Company in a Place of Payment
located outside the United States specified pursuant to Section 3.01.
Unless otherwise specified pursuant to Section 3.01, at the
direction of the Holder of any Bearer Security or Coupon payable in Dollars,
payment on such Bearer Security or Coupon will be made by check or, if
agreeable to the Trustee, by wire transfer to a Dollar account maintained by
such Holder outside the United States. If such payment at the offices of all
Paying Agents outside the United States becomes illegal or is effectively
precluded because of the imposition of exchange controls or similar
restrictions on the full payment or receipt of such amounts in Dollars, the
Company will appoint an office or agent in the United States at which such
payment may be made. Unless otherwise specified pursuant to Section 3.01, at
the direction of the Holder of any Bearer Security or Coupon payable
<PAGE> 49
40
in a Foreign Currency, payment on such Bearer Security or Coupon will be made
by a check drawn on a bank outside the United States or by wire transfer to an
appropriate account maintained by such Holder outside the United States.
Except as provided in this paragraph, no payment on any Bearer Security or
Coupon will be made by mail to an address in the United States or by wire
transfer to an account in the United States.
(c) 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, if such Debt Security is a Registered
Security, 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 Registered Securities (or
their respective Predecessor Securities) are registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall, at least 25 days prior to the date of the proposed payment,
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Registered Security and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money in the Currency or Currency unit
in which the Debt Securities of such series are payable (except as
otherwise specified pursuant to Section 3.01 or 3.10) equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which date shall be not more than 20 days
and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to the Holders of such Registered
Securities at their addresses as they appear in the Security Register,
not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names such Registered Securities
(or their
<PAGE> 50
41
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
Registered Securities in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Registered
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.
(d) Any Defaulted Interest payable in respect of Bearer
Securities of any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities of
such series, and notice of the payment date therefor shall be given by the
Trustee, in the name and at the expense of the Company, in the manner provided
in Section 1.05 not more than 20 days and not less than 10 days prior to the
date of the proposed payment.
(e) Subject to the foregoing provisions of this Section, each
Debt Security delivered under this Indenture upon transfer of or 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.
In the case of any Registered Security of any series that is
convertible, which Registered Security is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Registered Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Registered Security (or one or more predecessor
Registered Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Registered Security which is converted,
interest whose Stated Maturity is after the date of conversion of such
Registered Security shall not be payable.
Section 3.08. Cancellation.
Unless otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, all Debt Securities surrendered for payment,
redemption, transfer, exchange, credit against any sinking fund or conversion
and all Coupons surrendered for payment or exchange shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee. All Registered
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42
Securities and matured Coupons so delivered shall be promptly cancelled by the
Trustee. All Bearer Securities and unmatured Coupons so delivered shall be
held by the Trustee and, upon instruction by the Company Order, shall be
cancelled or held for reissuance. Bearer Securities and unmatured Coupons held
for reissuance may be reissued only in exchange for Bearer Securities of the
same series and of like Stated Maturity and with like terms and conditions
pursuant to Section 3.05 or in replacement of mutilated, lost, stolen or
destroyed Bearer Securities of the same series and of like Stated Maturity and
with like terms and conditions or the related Coupons pursuant to Section 3.06.
All Bearer Securities and unmatured Coupons held by the Trustee pending such
cancellation or reissuance shall be deemed to be delivered for cancellation for
all purposes of this Indenture and the Debt Securities. The Company may at any
time deliver to the Trustee for cancellation any Debt Securities or Coupons
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 or Coupons so delivered shall be promptly cancelled by the
Trustee. No Debt Securities or Coupons shall be authenticated in lieu of or in
exchange for any Debt Securities or Coupons cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled Debt
Securities and Coupons held by the Trustee shall be destroyed by the Trustee in
accordance with its customary procedures and a certificate of destruction shall
be delivered to the Company upon Company Request. The acquisition of any Debt
Securities or Coupons by the Company shall not operate as a redemption or
satisfaction of the indebtedness represented thereby unless and until such Debt
Securities or Coupons are surrendered to the Trustee for cancellation. In the
case of any temporary Global Note which shall be destroyed if the entire
aggregate principal amount of the Debt Securities represented thereby has been
exchanged, the certificate of destruction shall state that all certificates
required pursuant to Section 3.04 hereof and substantially in the form of
Exhibit B hereto, to be given by the Euro-clear Operator or CEDEL, have been
duly presented to the Trustee by the Euro-clear Operator or CEDEL, as the case
may be. Permanent Global Notes shall not be destroyed until exchanged in full
for definitive Debt Securities or until payment thereon is made in full.
Section 3.09. Computation of Interest.
Except as otherwise specified pursuant to Section 3.01 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.
<PAGE> 52
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Section 3.10. Currency of Payments in Respect of Debt
Securities.
(a) Except as otherwise specified pursuant to Section 3.01
for Bearer Securities of any series, payment of the principal of (and premium,
if any) and interest on Bearer Securities of such series denominated in any
Currency will be made in such Currency.
(b) With respect to Registered Securities of any series not
permitting the election provided for in paragraph (c) below or the Holders of
which have not made the election provided for in paragraph (c) below, except as
provided in paragraph (e) below, payment of the principal of (and premium, if
any) and any interest on any Registered Security of such series will be made in
the Currency in which such Registered Security is payable.
(c) It may be provided pursuant to Section 3.01 with respect
to the Registered Securities of any series that Holders shall have the option,
subject to paragraphs (e) and (f) below, to receive payments of principal of
(and premium, if any) and any interest on such Registered Securities in any of
the Currencies which may be designated for such election by delivering to the
Trustee a written election, to be in form and substance reasonably satisfactory
to the Trustee, not later than the close of business on the Election Date
immediately preceding the applicable payment date. If a Holder so elects to
receive such payments in any such Currency, such election will remain in effect
for such Holder or any transferee of such Holder until changed by such Holder
or such transferee by written notice to the Trustee (but any such change must
be made not later than the close of business on the Election Date immediately
preceding the next payment date to be effective for the payment to be made on
such payment date and no such change or election may be made with respect to
payments to be made on any Registered Security of such series with respect to
which an Event of Default has occurred or notice of redemption has been given
by the Company pursuant to Article Thirteen). Any Holder of any such
Registered Security who shall not have delivered any such election to the
Trustee by the close of business on the applicable Election Date will be paid
the amount due on the applicable payment date in the relevant Currency as
provided in paragraph (b) of this Section 3.10.
(d) If the election referred to in paragraph (c) above has
been provided for pursuant to Section 3.01, then not later than the fourth
Business Day after the Election Date for each payment date, the Trustee will
deliver to the Company a written notice specifying, in the Currency in which
each series of the Registered Securities is payable, the respective aggregate
amounts of principal of (and premium, if any) and any interest on the
Registered Securities to be paid on such payment date, specifying the amounts
so payable in respect of the Registered Securities as to which the Holders of
Registered Securities
<PAGE> 53
44
denominated in any Currency shall have elected to be paid in another Currency
as provided in paragraph (c) above. If the election referred to in paragraph
(c) above has been provided for pursuant to Section 3.01 and if at least one
Holder has made such election, then, on the second Business Day preceding each
payment date, the Company will deliver to the Trustee an Exchange Rate
Officer's Certificate in respect of the Currency payments to be made on such
payment date. The Currency amount receivable by Holders of Registered
Securities who have elected payment in a Currency as provided in paragraph (c)
above shall be determined by the Company on the basis of the applicable Market
Exchange Rate in effect on the third Business Day (the "Valuation Date")
immediately preceding each payment date.
(e) If a Conversion Event occurs with respect to a Foreign
Currency, the ECU or any other Currency unit in which any of the Debt
Securities are denominated or payable other than pursuant to an election
provided for pursuant to paragraph (c) above, then with respect to each date
for the payment of principal of (and premium, if any) and any interest on the
applicable Debt Securities denominated or payable in such Foreign Currency, the
ECU or such other Currency unit occurring after the last date on which such
Foreign Currency, the ECU or such other Currency unit was used (the "Conversion
Date"), the Dollar shall be the Currency of payment for use on each such
payment date. The Dollar amount to be paid by the Company to the Trustee and by
the Trustee or any Paying Agent to the Holders of such Debt Securities with
respect to such payment date shall be the Dollar Equivalent of the Foreign
Currency or, in the case of a Currency unit, the Dollar Equivalent of the
Currency unit, in each case as determined by the Currency Determination Agent,
if any, or, if there shall not be a Currency Determination Agent, then by the
Trustee, in the manner provided in paragraph (g) or (h) below.
(f) If the Holder of a Registered Security denominated in any
Currency shall have elected to be paid in another Currency as provided in
paragraph (c) above, and a Conversion Event occurs with respect to such elected
Currency, such Holder shall receive payment in the Currency in which payment
would have been made in the absence of such election. If a Conversion Event
occurs with respect to the Currency in which payment would have been made in
the absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (e) of this Section 3.10.
(g) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Currency Determination Agent, if any, or, if there shall not
be a Currency Determination Agent, then by the Trustee, and shall be obtained
for each subsequent payment date by converting the specified Foreign Currency
into Dollars at the Market Exchange Rate on the Valuation Date.
(h) The "Dollar Equivalent of the Currency unit" shall be
determined by the Currency Determination Agent, if any, or, if there shall not
be a Currency Determination Agent, then by the
<PAGE> 54
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Trustee, and subject to the provisions of paragraph (i) below, shall be the sum
of each amount obtained by converting the Specified Amount of each Component
Currency into Dollars at the Market Exchange Rate for such Component Currency
on the Valuation Date with respect to each payment.
(i) For purposes of this Section 3.10 the following terms
shall have the following meanings:
A "Component Currency" shall mean any Currency which, on the
Conversion Date, was a component Currency of the relevant Currency
unit, including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the
number of units of such Component Currency or fractions thereof which
were represented in the relevant Currency unit, including, but not
limited to, the ECU, on the Conversion Date. If after the Conversion
Date the official unit of any Component Currency is altered by way of
combination or subdivision, the Specified Amount of such Component
Currency shall be divided or multiplied in the same proportion. If
after the Conversion Date two or more Component Currencies are
consolidated into a single Currency, the respective Specified Amounts
of such Component Currencies shall be replaced by an amount in such
single Currency equal to the sum of the respective Specified Amounts
of such consolidated Component Currencies expressed in such single
Currency, and such amount shall thereafter be a Specified Amount and
such single Currency shall thereafter be a Component Currency. If
after the Conversion Date any Component Currency shall be divided into
two or more Currencies, the Specified Amount of such Component
Currency shall be replaced by amounts of such two or more Currencies
with appropriate Dollar equivalents at the Market Exchange Rate on the
date of such replacement equal to the Dollar equivalent of the
Specified Amount of such former Component Currency at the Market
Exchange Rate on such date, and such amounts shall thereafter be
Specified Amounts and such Currencies shall thereafter be Component
Currencies. If after the Conversion Date of the relevant Currency
unit, including but not limited to, the ECU, a Conversion Event (other
than any event referred to above in this definition of "Specified
Amount") occurs with respect to any Component Currency of such
Currency unit, the Specified Amount of such Component Currency shall,
for purposes of calculating the Dollar Equivalent of the Currency
unit, be converted into Dollars at the Market Exchange Rate in effect
on the Valuation Date of such Component Currency.
"Election Date" shall mean the record date with respect to any
payment date, and with respect to the Maturity shall mean the record
date (if within 16 or fewer days prior to the Maturity) immediately
preceding the Maturity, and with
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respect to any series of Debt Securities whose record date immediately
preceding the Maturity is more than 16 days prior to the Maturity or
any series of Debt Securities for which no record dates are provided
with respect to interest payments, shall mean the date which is 16
days prior to the Maturity.
(j) All decisions and determinations of the Trustee or the
Currency Determination Agent, if any, regarding the Dollar Equivalent of the
Foreign Currency, the Dollar Equivalent of the Currency unit and the Market
Exchange Rate shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Company and all Holders of the Debt Securities denominated or payable in the
relevant Currency. In the event of a Conversion Event with respect to a
Foreign Currency, the Company, after learning thereof, will immediately give
written notice thereof to the Trustee (and the Trustee will promptly thereafter
give notice in the manner provided in Section 1.05 to the Holders) specifying
the Conversion Date. In the event of a Conversion Event with respect to the
ECU or any other Currency unit in which Debt Securities are denominated or
payable, the Company, after learning thereof, will immediately give written
notice thereof to the Trustee (and the Trustee will promptly thereafter give
written notice in the manner provided in Section 1.05 to the Holders)
specifying the Conversion Date and the Specified Amount of each Component
Currency on the Conversion Date. In the event of any subsequent change in any
Component Currency as set forth in the definition of Specified Amount above,
the Company, after learning thereof, will similarly give written notice to the
Trustee. The Trustee shall be fully justified and protected in relying and
acting upon information received by it from the Company and the Currency
Determination Agent, if any and may, notwithstanding any other provision of
this Indenture, conclusively assume that no Conversion Event or other event of
which it is entitled to notice hereunder has occurred unless it receives
written notice thereof as provided herein, and shall not otherwise have any
duty or obligation to determine such information independently.
(k) For purposes of any provision of the Indenture where the
Holders of Outstanding Debt Securities may perform an Act which requires that a
specified percentage of the Outstanding Debt Securities of all series perform
such Act and for purposes of any decision or determination by the Trustee of
amounts due and unpaid for the principal (and premium, if any) and interest on
the Debt Securities of all series in respect of which moneys are to be
disbursed ratably, the principal of (and premium, if any) and interest on the
Outstanding Debt Securities denominated in a Foreign Currency will be the
amount in Dollars based upon the Market Exchange Rate for Debt Securities of
such series, as of the date for determining whether the Holders entitled to
perform such Act have performed it, or as of the Business Day
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47
immediately prior to the date of such decision or determination by the Trustee,
as the case may be.
Section 3.11. Judgments.
If for the purpose of obtaining a judgment in any court with
respect to any obligation of the Company hereunder or under any Debt Security,
it shall become necessary to convert into any other Currency any amount in the
Currency due hereunder or under such Debt Security, then such conversion shall
be made at the Market Exchange Rate as in effect on the date the Company shall
make payment to any Person in satisfaction of such judgment. If pursuant to
any such judgment, conversion shall be made on a date other than the date
payment is made and there shall occur a change between such Market Exchange
Rate and the Market Exchange Rate as in effect on the date of payment, the
Company agrees to pay such additional amounts (if any) as may be necessary to
ensure that the amount paid is equal to the amount in such other Currency
which, when converted at the Market Exchange Rate as in effect on the date of
payment or distribution, is the amount then due hereunder or under such Debt
Security. Any amount due from the Company under this Section 3.11 shall be due
as a separate debt and is not to be affected by or merged into any judgment
being obtained for any other sums due hereunder or in respect of any Debt
Security. In no event, however, shall the Company be required to pay more in
the Currency or Currency unit due hereunder or under such Debt Security at the
Market Exchange Rate as in effect when payment is made than the amount of
Currency stated to be due hereunder or under such Debt Security so that in any
event the Company's obligations hereunder or under such Debt Security will be
effectively maintained as obligations in such Currency, and the Company shall
be entitled to withhold (or be reimbursed for, as the case may be) any excess
of the amount actually realized upon any such conversion over the amount due
and payable on the date of payment or distribution.
Section 3.12. Exchange Upon Default.
If default is made in the payments referred to in Section
12.01, the Company hereby undertakes that upon presentation and surrender of a
permanent Global Note to the Trustee (or to any other Person or at any other
address as the Company may designate in writing), on any Business Day on or
after the maturity date thereof the Company will issue and the Trustee will
authenticate and deliver to the bearer of such permanent Global Note duly
executed and authenticated definitive Debt Securities with the same issue date
and maturity date as set out in such permanent Global Note.
Section 3.13. CUSIP Numbers.
The Company in issuing the Debt Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a
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convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Debt Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Debt Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
This Indenture, with respect to the Debt Securities of any
series (if all series issued under this Indenture are not to be affected),
shall, upon Company Request, cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange or conversion of such
Debt Securities herein expressly provided for or expressly provided in the
terms of the Debt Securities of such series pursuant to Section 3.01, and
rights to receive payments of principal (and premium, if any) and 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
(1) either
(A) all Debt Securities and the Coupons, if any, of such
series theretofore authenticated and delivered (other than (i) Debt
Securities and Coupons of such series which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
3.06, (ii) Coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived under Section 3.05,
(iii) Coupons appertaining to Bearer Securities called for redemption
and maturing after the relevant Redemption Date, whose surrender has
been waived as provided in Section 13.06, and (iv) Debt Securities and
Coupons 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 12.04) have been delivered to the Trustee for
cancellation; or
(B) all Debt Securities and the Coupons, if any, of such
series not theretofore delivered to the Trustee for cancellation,
(i) have become due and payable, or
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(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,
and the Company, in the case of (i), (ii) or (iii) of this subclause
(B), has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount in the
Currency in which such Debt Securities are denominated (except as
otherwise provided pursuant to Section 3.01 or 3.10) 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;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
(3) 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
(4) the Company has delivered to the Trustee an Opinion of
Counsel or a ruling by the Internal Revenue Service to the effect that
such deposit and discharge will not cause Holders of the Debt
Securities of the series to recognize income, gain or loss for Federal
income tax purposes.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations
of the Trustee to any Authenticating Agent under Section 6.14, the obligations
of the Company under Section 12.01, and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.02 and the last paragraph of Section
12.04, shall survive. If, after the deposit referred to in Section 4.01 has
been made, (x) the Holder of a Debt Security
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is entitled to, and does, elect pursuant to Section 3.10(c), to receive payment
in a Currency other than that in which the deposit pursuant to Section 4.01 was
made, or (y) if a Conversion Event occurs with respect to the Currency in which
the deposit was made or elected to be received by the Holder pursuant to
Section 3.10(c), then the indebtedness represented by such Debt Security shall
be fully discharged to the extent that the deposit made with respect to such
Debt Security shall be converted into the Currency in which such payment is
made.
Section 4.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
12.04, all money deposited with the Trustee pursuant to Section 4.01 shall be
held in trust and applied by it, in accordance with the provisions of the Debt
Securities and Coupons, if any, 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 FIVE
REMEDIES
Section 5.01. 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):
(1) default in the payment of any interest upon any Debt
Security or any payment with respect to the Coupons, if any, of such
series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (and premium,
if any, on) any Debt Security of such series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Debt Security of such series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance
<PAGE> 60
51
or whose breach is elsewhere in this Section specifically dealt with
or any covenant or warranty 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
(5) 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 60
consecutive days; or
(6) 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
(7) any other Event of Default provided with respect to Debt
Securities of that series pursuant to Section 3.01.
Section 5.02. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Debt Securities of any
series at that 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
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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 any), shall become
immediately due and payable. Upon payment of such amount in the Currency in
which such Debt Securities are denominated (except as otherwise provided
pursuant to Section 3.01 or 3.10), 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 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
(1) the Company has paid or deposited with the Trustee a sum
in the Currency in which such Debt Securities are denominated (except
as otherwise provided pursuant to Section 3.01 or 3.10) sufficient to
pay
(A) all overdue installments of interest on all Debt
Securities or all overdue payments with respect to
any Coupons of such series,
(B) 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,
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of
interest on each Debt Security of such series or upon
overdue payments on any Coupons of such series at the
Overdue Rate, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel;provided, however, that all sums payable
under this clause (D) shall be paid in Dollars;
and
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(2) 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 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of
interest on any Debt Security or any payment with respect to any
Coupons when such interest or payment becomes due and payable and such
default continues for a period of 30 days,
(2) default is made in the payment of principal of (or
premium, if any, on) any Debt Security at the Maturity thereof, or
(3) 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,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities or of such Coupons, the amount then due and
payable on such Debt Securities or matured Coupons, 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 Coupons, 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 and Coupons wherever situated.
If an Event of Default with respect to Debt Securities of any
series occurs and is continuing, the Trustee may in its
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discretion proceed to protect and enforce its rights and the rights of the
Holders of Debt Securities and Coupons of such series by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
Section 5.04. Trustee May File Proofs of Claim.
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial 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 and Coupons, if any,
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 for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) 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 5.02) (and premium, if any) and interest owing
and unpaid in respect of the Debt Securities and Coupons of such
series and to file such other papers or documents and take such other
actions, including participating as a member, voting or otherwise, of
any committee of creditors appointed in the matter, 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 and Coupons allowed in such
judicial proceeding, and
(ii) 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
<PAGE> 64
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and counsel, and any other amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Debt Securities and any Coupons 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.
Section 5.05. Trustee May Enforce Claims Without Possession
of Debt Securities.
All rights of action and claims under this Indenture or the
Debt Securities and the Coupons, if any, of any series may be prosecuted and
enforced by the Trustee without the possession of any of such Debt Securities
or Coupons 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 or Coupons in respect of
which such judgment has been recovered.
Section 5.06. 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 or
Coupons 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 6.07.
SECOND: Subject to Article Sixteen, to the payment of the
amounts then due and unpaid for principal of (and premium, if any) and
interest on the Debt Securities or Coupons 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 or Coupons for
principal (and premium, if any) and interest, respectively; and
THIRD: Subject to Article Sixteen, the balance, if any, to
the Person or Persons entitled thereto.
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Section 5.07. Limitation on Suits.
No Holder of any Debt Security or Coupon 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
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to such series;
(2) 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;
(3) 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;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding 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 or Coupons 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
5.07, each and every Holder of Debt Securities or Coupons 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 5.08. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Debt Security or of any Coupon shall have the right, which is
absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 3.07) interest on such Debt Security
or Coupon on the respective Stated Maturity or Maturities expressed in such
Debt Security or
<PAGE> 66
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Coupon (or, in the case of redemption, on the Redemption Date) and to convert
any Debt Security that is convertible and to institute suit for the enforcement
of any such payment and interest thereon and of such right to convert, and such
right shall not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any 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.
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 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
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
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(2) subject to the provisions of Section 6.01, 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;
(3) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction; and
(4) this provision shall not affect the rights of the
Trustee set forth in Section 6.01(c)(4).
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series may on behalf of the Holders of
all the Debt Securities of any such series waive, by notice to the Trustee and
the Company, any past default or Event of Default hereunder with respect to
such series and its consequences, except a default
(1) 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 instalment or analogous obligation with respect to
the Debt Securities of such series, or
(2) in respect of a covenant or provision hereof which
pursuant to Article Eleven 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 Event of
Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Debt Security or any Coupon 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
<PAGE> 68
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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 or Coupon for the enforcement of the payment of the
principal of (or premium, if any) or interest on such Debt Security or the
payment of any Coupon on or after the respective Stated Maturity or Maturities
expressed in such Debt Security or Coupon (or, in the case of redemption, on or
after the Redemption Date) or for the enforcement of the right to convert any
Debt Security of any series as may be provided in accordance with Section 3.01.
Section 5.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.01. 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 determine whether or not they conform to the
requirements of this Indenture.
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(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) subject to Section 6.04, 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 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 not be charged with knowledge of any
default or Event of Default or any other act or circumstance upon the
occurrence of which the Trustee may be required to take action unless
a Responsible Officer of the Trustee obtains actual knowledge of such
default, Event of Default, act or circumstance or unless written
notice referencing this Indenture or the Debt Securities is received
by the Trustee at the Corporate Trust Office.
(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.
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Section 6.02. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
with respect to Debt Securities or Coupons, if any, of any series, the Trustee
shall give notice to all Holders of Debt Securities and Coupons 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 or Coupon of such series or in the payment of any sinking fund
installment with respect to Debt Securities of such series, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders of Debt Securities
and of Coupons of such series; and provided, further, that in the case of any
default of the character specified in Section 5.01(4) with respect to 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 6.02 with respect to
Registered Securities shall be transmitted by mail:
(1) to all Registered Holders, as the names and addresses of
the Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as
have within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose;
(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 7.02(a) of this Indenture; and
(4) to the Company.
Notice given pursuant to this Section 6.02 with respect to
Bearer Securities shall be transmitted in the manner set forth in Section 1.05.
Section 6.03. Certain Rights of Trustee.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution,
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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
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, 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 (including any agent appointed pursuant
to Section 3.10(j)) or attorney appointed with due care by it hereunder.
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Section 6.04. 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 or Coupons, if any, 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. The Trustee
assumes no responsibility for the accuracy of any statements in any
registration statement relating to the Debt Securities.
Section 6.05. 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 or Coupons, and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
Section 6.06. Money Held in Trust.
Money in any Currency 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 6.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation
in Dollars as the Company and the Trustee shall from time to time
agree in writing 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);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee in Dollars upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee
in connection with the administration of the trusts herein set forth
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith; and
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(3) to indemnify in Dollars the Trustee for, and to hold it
harmless against, any loss, liability, damage, claims or expense,
including taxes (other than taxes based upon, measured by or
determined by income of the Trustee), 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 and in addition to its rights under Section 5.06,
the Trustee shall have a claim prior to the Debt Securities and Coupons, if
any, upon all property and funds held or collected by the Trustee as such,
except funds held in trust pursuant to Section 15.03 hereof or for the payment
of amounts due on particular Debt Securities and Coupons. The fees and
expenses incurred by the Trustee in connection with any bankruptcy of the
Company shall constitute fees and expenses of administration provided, however,
that this shall not affect the Trustee's rights as set forth in the preceding
sentence or Section 5.06.
Section 6.08. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section with respect to the Debt Securities of any
series, then, within 90 days after ascertaining that it has such conflicting
interest, and if the default (as hereinafter defined) to which such conflicting
interest relates has not been cured or duly waived or otherwise eliminated
before the end of such 90-day period, the Trustee shall either eliminate such
conflicting interest or, except as otherwise provided below, resign with
respect to the Debt Securities of such series, and the Company shall take
prompt steps to have a successor appointed, in the manner and with the effect
hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section with respect to the Debt
Securities of any series, the Trustee shall, within 10 days after the
expiration of such 90-day period, transmit to all Holders of Debt Securities of
such series notice of such failure.
Notice given pursuant to this Section 6.08(b) with respect to
Registered Securities shall be transmitted by mail:
(1) to all Registered Holders, as the names and addresses of
the Registered Holders appear in the Security Register;
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(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose;
(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 7.02(a) of this Indenture; and
(4) to the Company.
Notice given pursuant to this Section 6.08(b) with respect to Bearer Securities
shall be transmitted in the manner set forth in Section 1.05.
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to the Debt Securities of
any series, if there shall exist an Event of Default (as such term is defined
herein, but exclusive of any period of grace or requirement of notice) with
respect to such Debt Securities and
(1) the Trustee is trustee under this Indenture with respect
to the Outstanding Debt Securities of any series other than that
series or is trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other
indenture is a collateral trust indenture under which the only
collateral consists of Debt Securities issued under this Indenture,
provided that there shall be excluded from the operation of this
paragraph this Indenture with respect to the Debt Securities of any
series other than that series and any other indenture or indentures
under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or
indentures (and all series of securities issuable thereunder)
are wholly unsecured and rank equally and such other indenture
or indentures are hereafter qualified under the Trust
Indenture Act, unless the Commission shall have found and
declared by order pursuant to Section 305(b) or Section 307(c)
of the Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to the Debt
Securities of such series and one or more other series or the
provisions of such other indenture or indentures which are so
likely to involve a material conflict of interest as to make
it necessary, in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under
this Indenture with respect to the Debt Securities of such
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series and such other series or under such other indenture or
indentures, or
(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to the Debt Securities of such series
and such other series or such other indenture or indentures is
not so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection
of investors to disqualify the Trustee from acting as such
under this Indenture with respect to the Debt Securities of
such series and such other series or under such other
indenture or indentures;
(2) the Trustee or any of its directors or executive officers
is an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee or representative
of the Company, or of an underwriter (other than the Trustee itself)
for the Company who is currently engaged in the business of
underwriting, except that (i) one individual may be a director or an
executive officer, or both, of the Trustee and a director or an
executive officer, or both, of the Company but may not be at the same
time an executive officer of both the Trustee and the Company; (ii) if
and so long as the number of directors of the Trustee in office is
more than nine, one additional individual may be a director or an
executive officer, or both, of the Trustee and a director of the
Company; and (iii) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity of transfer
agent, registrar, custodian, paying agent, fiscal agent, escrow agent,
or depositary or in any other similar capacity, or, subject to the
provisions of paragraph (1) of this subsection, to act as trustee,
whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner
or executive officer thereof, or 20% or more of such voting securities
is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Company or by any
director, partner or executive officer thereof or is beneficially
owned, collectively, by any two or more such persons;
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(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection defined), (i) 5% or more of the voting
securities, or 10% or more of any other class of security, of the
Company not including the Debt Securities issued under this Indenture
and securities issued under any other indenture under which the
Trustee is also trustee, or (ii) 10% or more of any class of security
of an underwriter for the Company;
(7) the Trustee is the beneficial owner of or holds as
collateral security for an obligation which is in default, 5% or more
of the voting securities of any person who, to the knowledge of the
Trustee, owns 10% or more of the voting securities of, or controls
directly or indirectly or is under direct or indirect common control
with, the Company;
(8) the Trustee is the beneficial owner of or holds as
collateral security for an obligation which is in default, 10% or more
of any class of security of any person who, to the knowledge of the
Trustee, owns 50% or more of the voting securities of the Company;
(9) the Trustee owns, on the date of such Event of Default or
any anniversary of such Event of Default while such Event of Default
remains outstanding, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or
conservator, or in any other similar capacity, an aggregate of 25% or
more of the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of which
would have constituted a conflicting interest under paragraph (6), (7)
or (8) of this subsection. As to any such securities of which the
Trustee acquired ownership through becoming executor, administrator or
testamentary trustee of an estate which included them, the provisions
of the preceding sentence shall not apply, for a period of not more
than two years from the date of such acquisition, to the extent that
such securities included in such estate do not exceed 25% of such
voting securities or 25% of any such class of security. Promptly
after the dates of any such Event of Default and annually in each
succeeding year that such Event of Default continues, the Trustee
shall make a check of its holdings of such securities in any of the
above-mentioned capacities as of such dates. If the Company fails to
make payment in full of the principal of (or premium, if any) or
interest on any of the Debt Securities when and as the same becomes
due and payable, and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holdings of such
securities in any of the above-mentioned capacities as of the date of
the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph, all such
securities so held by the Trustee, with sole or
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joint control over such securities vested in it, shall be considered
as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this subsection; or
(10) except under the circumstances described in paragraph
(1), (3), (4), (5) or (6) of Section 6.13(b) of this Indenture, the
Trustee shall be or shall become a creditor of the Company.
For the purposes of paragraph (1) of this subsection, the term
"series of securities" or "series" means a series, class or group of securities
issuable under an indenture pursuant to whose terms holders of one such series
may vote to direct the Trustee, or otherwise take action pursuant to a vote of
such holders, separately from holders of another series; provided, that "series
of securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in paragraphs (5) to (9),
inclusive, of this subsection shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed
to be "in default" when a default in payment of principal shall have continued
for 30 days or more and shall not have been cured; and (iii) the Trustee shall
not be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (C) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar representative
capacity.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to
the Company means every person who, within one year prior to the time
as of which the determination is made, has purchased from the Company
with a view to, or has offered or sold for the Company in connection
with, the distribution of
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any security of the Company outstanding at such time, or has
participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the
direct or indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation,
or any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint stock company, a trust, an
estate, an unincorporated organization, or a government or political
subdivision thereof. As used in this paragraph, the term "trust"
shall include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangements whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person.
(5) The term "Company" means any obligor upon the Debt
Securities of any series.
(6) The term "executive officer" means the president, every
vice president, every trust officer, the cashier, the secretary, and
the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization, whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting
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securities of such person are entitled to cast in the direction or
management of the affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(3) The term "amount," when used with regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or
for the account of the issuer. The following securities shall not be
deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow
by the issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges;provided,
however, that, in the case of secured evidences of indebtedness, all
of which are issued under a single indenture, differences in the
interest rates or maturity dates of various series thereof shall not
be deemed sufficient to constitute such series different classes; and
provided, furthe, that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities
of different classes, whether or not they are issued under a single
indenture.
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(f) Except in the case of a default in the payment of the
principal of or interest on any Debt Security of any series, or in the payment
of any sinking or purchase fund installment, the Trustee shall not be required
to resign as provided by this Section if the Trustee shall have sustained the
burden of proving, on application to the Commission and after opportunity for
hearing thereon, that:
(1) the Event of Default may be cured or waived during a
reasonable period and under the procedures described in such
application; and
(2) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Debt Securities.
The filing of such an application shall automatically stay the performance of
the duty to resign until the Commission orders otherwise.
Section 6.09. 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 $50,000,000, subject to supervision or examination by
Federal, State or District of Columbia authority and eligible to act as Trustee
hereunder in compliance with Section 310(a)(1) of the Trust Indenture Act. 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.
(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,
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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 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 6.08(a)
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 6.09
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 a majority
in principal amount of the Outstanding
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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 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 1.05 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 6.07.
(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
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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 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
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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.
(a) Subject to subsection (b) of this Section, if the Trustee
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company within three months prior to a default, as defined in
subsection (c) of this Section, or subsequent to such default, then, unless and
until such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually, the Holders of the
Debt Securities and of the Coupons, if any, and the holders of other indenture
securities (as defined in subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three-month period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a voluntary or involuntary case had been commenced in
respect of the Company under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law upon the date of such
default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three-month period, or an amount equal to the proceeds of any
such property, if disposed of, subject, however, to the rights, if
any, of the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Company) who
is liable thereon, and (ii) the proceeds of the bona fide sale of any
such claim by the Trustee to a third Person, and (iii) distributions
made in cash, securities or
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other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings or reorganization
pursuant to the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy,
insolvency or other similar law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such three-month period;
(C) to realize, for its own account, but only to the extent
of the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three-month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to
believe that a default, as defined in subsection (c) of this Section,
would occur within three months, or
(D) to receive payment on any claim referred to in paragraph
(B) or (C) against the release of any property held as security for
such claim as provided in paragraph (B) or (C), as the case may be, to
the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three-month period for property held as
security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Holders and the holders of other indenture
securities in such manner that the Trustee, the Holders and the holders of
other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal bankruptcy laws, as now or hereafter constituted or any other
applicable Federal or State bankruptcy, insolvency or other similar law, the
same percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from the Company
of the funds and property in such special account and
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before crediting to the respective claims of the Trustee and the Holders and
the holders of other indenture securities dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal bankruptcy laws, as now or hereafter constituted, or
any other applicable Federal or State bankruptcy, insolvency or other similar
law, but after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other than from such
dividends and from the funds and property so held in such special account. As
used in this paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or other similar law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceedings
for reorganization is pending shall have jurisdiction (i) to apportion among
the Trustee and the Holders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held
in such special account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made
to the Trustee and the Holders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claim, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such three-month period shall be subject to the provisions of this
subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three-month
period, it shall be subject to the provisions of this subsection if and only if
the following conditions exist:
(i) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if such Trustee
had continued as Trustee, occurred after the beginning of such
three-month period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
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(b) There shall be excluded from the operation of subsection
(a) of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the Lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the Holders
at the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented, or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) The acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section.
(c) for the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Debt Securities or
upon the other indenture securities when and as such principal or
interest becomes due and payable.
(2) The term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under
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which a default exists at the time of the apportionment of the funds
and property held in such special account.
(3) The term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill
of exchange, acceptance or obligation which is made, drawn, negotiated
or incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation
of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" means any obligor upon the Debt
Securities.
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 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. 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 $5,000,000 and subject to supervision
or examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually,
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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 1.05. 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 6.07. The Authenticating Agent for the Debt Securities of any series
shall have no responsibility or liability for any action taken by it as such in
good faith and without negligence at the direction of the Trustee for such
series.
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 referred to in
the within mentioned Indenture.
<PAGE> 90
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_______________________________________,
As Trustee
Dated: By:___________________________
As Authenticating Agent
By:___________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses
of Holders.
The Company will furnish or cause to be furnished to the
Trustee with respect to Registered 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
Registered Securities of such series (or on semi-annual dates in each year to
be determined pursuant to Section 3.01 if the Registered 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 15 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.
The Company shall also be required to furnish to the Trustee
at all such times set forth above all information in the possession or control
of the Company or any of its Paying Agents other than the Trustee as to the
names and addresses of the Holders of Bearer Securities of all series;
provided, however, that the Company shall have no obligation to investigate any
matter relating to any Holders of Bearer Securities of any series.
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Section 7.02. 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 7.01 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
7.03(c)(2).
The Trustee may destroy any list furnished to it as provided
in Section 7.01 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 7.03(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
7.02(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 7.02(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 inquest of such
applicants, mail to the Holders of Debt Securities of such series or all
Holders, as the case may be,
<PAGE> 92
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whose names and addresses appear in the information preserved at the time by
the Trustee in accordance with Section 7.02(a), a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
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.
(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 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing of any material pursuant to a request made under Section 7.02(b).
Section 7.03. Reports by Trustee.
(a) Within 60 days after May 15 of each year, commencing May
15, 1995, 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 7.03, a
brief report dated as of 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 6.09 and its qualifications under Section 6.08;
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(2) the creation of or any material change to a relationship
specified in paragraph (1) through (10) of Section 6.08(c) of this
Indenture;
(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 6.13(b)(2), (3), (4) or (6);
(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 6.02.
(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 7.02 (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
<PAGE> 94
85
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.
(c) Reports pursuant to this Section 7.03 with respect to
Registered Securities shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders of Registered Securities appear in the
Security Register;
(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose; and
(3) except in the cases of reports pursuant to subsection (b)
of this Section 7.03, 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 7.02(a).
Reports pursuant to this Section 7.03 with respect to Bearer Securities shall
be published in accordance with Section 1.05.
(d) 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 7.04. Reports by Company.
The Company will:
(1) file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended; or,
if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it will file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the
<PAGE> 95
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Securities Exchange Act of 1934, as amended, in respect of a security
listed and registered on a national securities exchange as may be
required from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(3) transmit to all Holders of Debt Securities, in the manner
and to the extent provided in Section 7.03, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. 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 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 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 Nine, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Holders.
<PAGE> 96
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Section 8.02. Proof of Ownership; Proof of Execution of
Instruments by Holder.
The ownership of Registered 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.
The ownership of Bearer Securities shall be proved by
production of such Bearer Securities or by a certificate executed by any bank
or trust company, which certificate shall be dated and shall state that on the
date thereof a Bearer Security bearing a specified identifying number or other
mark was deposited with or exhibited to the person executing such certificate
by the person named in such certificate, or by any other proof of possession
reasonably satisfactory to the Trustee. The holding by the person named in any
such certificate of any Bearer Security specified therein shall be presumed to
continue for a period of one year unless at the time of determination of such
holding (1) another certificate bearing a later date issued in respect of the
same Bearer Security shall be produced, (2) such Bearer Security shall be
produced by some other person, (3) such Bearer Security shall have been
registered on the Security Register, if, pursuant to Section 3.01, such Bearer
Security can be so registered, or (4) such Bearer Security shall have been
cancelled or paid.
Subject to the provisions of Sections 6.01, 6.03 and 9.05,
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 9.06.
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.
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Section 8.03. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Registered Security is
registered as the owner of such Registered Security for the purpose of
receiving payment of the principal of (and premium, if any) and (subject to
Section 3.07) interest, if any, on such Registered Security and for all other
purposes whatsoever, whether or not such Registered 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. The Company, the Trustee, and any
agent of the Company or the Trustee may treat the Holder of any Bearer Security
or of any Coupon as the absolute owner of such Bearer Security or Coupon for
the purposes of receiving payment thereof or on account thereof and for all
other purposes whatsoever, whether or not such Bearer Security or Coupon 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 or Coupon.
Section 8.04. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, 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 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 8.02, 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 5.08, upon all future Holders of such Debt Security and all past,
present and future Holders of Coupons, if any, appertaining thereto and of any
Debt Securities and Coupons 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 Coupons or such other Debt
Securities or Coupons.
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ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. 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 Nine for
any of the following purposes:
(1) 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 or Event of 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
Five;
(2) to remove the Trustee for such series and appoint a
successor Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) 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 9.02. 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 9.01, 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 1.05. Such notice
shall be given not less than 20 days nor more than 90 days prior to the date
fixed for the meeting.
Section 9.03. 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 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 20 days after
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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 9.01, by giving notice
thereof as provided in Section 9.02.
Section 9.04. 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 and 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 9.05. 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 9.03, 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 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 3.01) of Debt Securities of such series held or
represented by him; 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 instruments in writing duly
designating him as the person to vote on behalf of Holders of Debt Securities
of such series. Any meeting of Holders with
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respect to which a meeting was duly called pursuant to the provisions of
Section 9.02 or 9.03 may be adjourned from time to time by a majority of such
Holders present and the meeting may be held as so adjourned without further
notice.
Section 9.06. Voting.
The vote upon any resolution submitted to any meeting of
Holders 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 9.02. 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 9.07. No Delay of Rights by Meeting.
Nothing contained in this Article Nine 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 TEN
INTENTIONALLY OMITTED
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ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of
Holders.
Without prior notice to or the consent of any Holders, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Corporation to the
rights of the Company and the assumption by such successor of the
covenants and other obligations of the Company herein and in the Debt
Securities and Coupons, if any, contained; or
(2) to add to the covenants of the Company, for the benefit
of the Holders of all or any series of Debt Securities and the
Coupons, if any, appertaining thereto (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
(3) 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
(4) to add or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Debt Securities of any series in bearer form, registrable
or not registrable, and with or without Coupons, to permit Bearer
Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations or to permit the issuance
of Debt Securities of any series in uncertificated form, provided that
any such action shall not adversely affect the interests of the
Holders of Debt Securities of any series or any related Coupons in any
material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Debt Security or Coupon 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
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(6) to secure the Debt Securities; or
(7) 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 Securities pursuant to
Article Four or Fifteen,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 or any related
Coupons in any material respect; or
(8) to establish the form or terms of Debt Securities and
Coupons, if any, of any series as permitted by Sections 2.01 and 3.01;
or
(9) 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,
pursuant to the requirements of Section 6.11; or
(10) to make provision with respect to the conversion rights
of Holders of Debt Securities of any series pursuant to the
requirements of Section 17.04, unless otherwise provided pursuant to
Section 3.01; or
(11) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, to eliminate any conflict between the terms of this
Indenture or the Debt Securities and the Trust Indenture Act 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 or Coupons, if any, of any series created prior to the
execution of such supplemental indenture in any material respect.
Section 11.02. Supplemental Indentures With Consent of
Holders.
With 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 supplemental indenture voting separately, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders under this Indenture of
such Debt
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Securities or Coupons, if any; 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,
(1) change the Stated Maturity of the principal of, or
installment of interest, if any, on, any Debt Security, or reduce the
principal amount thereof or the interest thereon or any premium
payable upon redemption thereof, or change the Stated Maturity of or
reduce the amount of any payment to be made with respect to any
Coupon, or change the Currency or Currencies in which the principal of
(and premium, if any) or interest on such Debt Security is denominated
or payable, 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 5.02, or
adversely affect the right of repayment or repurchase, if any, at the
option of the Holder, or reduce the amount of, or postpone the date
fixed for, any payment under any sinking fund or analogous provisions
for any Debt Security, 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), or
limit the obligation of the Company to maintain a paying agency
outside the United States for payment on Bearer Securities as provided
in Section 12.03, or adversely affect the right to convert any Debt
Security into shares of Common Stock of the Company as may be provided
pursuant to Section 3.01; or
(2) 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 or Events of Default
hereunder and their consequences provided for in this Indenture; or
(3) modify any of the provisions of this Section, Section
5.13 or Section 12.07, 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 and Section 12.07, or
the deletion of this proviso, in accordance with the requirements of
Sections 6.11 and 11.01(7); or
(4) modify any of the provisions of this Indenture relating
to the subordination of the Debt Securities in a manner adverse to the
Holders.
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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 and Coupons, if any, or which modifies the
rights of the Holders of Debt Securities and Coupons 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 and Coupons, if
any, of any other series.
Section 11.03. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a material way.
Section 11.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Debt Securities and Coupons theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 11.05. 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 11.06. Reference in Debt Securities to Supplemental
Indentures.
Debt Securities and Coupons, if any, 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
and Coupons of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any
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such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Debt
Securities and Coupons of such series.
Section 11.07. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the
appropriate Trustee of any supplemental indenture pursuant to Section 11.02,
the Company shall transmit, in the manner and to the extent provided in Section
1.05, to all Holders of any series of the Debt Securities affected thereby, a
notice setting forth in general terms the substance of such supplemental
indenture.
Section 11.08. Effect on Senior Indebtedness.
No supplemental indenture shall adversely affect the rights of
any holder of Senior Indebtedness under Article Sixteen without the consent of
such holder.
ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Debt Securities and Coupons, if any, 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, the Coupons and this
Indenture. Unless otherwise specified as contemplated by Section 3.01 with
respect to any series of Debt Securities or except as otherwise provided in
Section 3.06, any interest due on Bearer Securities on or before Maturity shall
be payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature. If so
provided in the terms of any series of Debt Securities established as provided
in Section 3.01, 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 12.02. Officer's Certificate as to Default.
The Company will deliver to the Trustee, on or before a date
not more than four months after the end of each fiscal year of the Company
(which on the date hereof is the calendar year) ending after the date hereof, a
certificate of the principal
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executive officer, principal financial officer or principal accounting officer
of the Company stating whether or not to the best knowledge of the signer
thereof the Company is in compliance with all covenants and conditions under
this Indenture, and, if the Company shall be in default, specifying all such
defaults and the nature 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.
Section 12.03. Maintenance of Office or Agency.
If Debt Securities of a series are issuable only as Registered
Securities, the Company will maintain or cause to be maintained 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 or
redemption, 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 Debt Securities of a series are issuable as Bearer
Securities, the Company will maintain (A) in the Borough of Manhattan, The City
and State of New York, an office or agency where any Registered Securities of
that series, if any, may be presented or surrendered for payment, where any
Registered Securities of that series, if any, may be surrendered for
registration of transfer, where Debt Securities of that series may be
surrendered for exchange or redemption, where Debt Securities of that series
that are convertible may be surrendered for conversion, where notices and
demands to or upon the Company in respect of the Debt Securities of that series
and this Indenture may be served and where Bearer Securities of that series and
related Coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise), (B)
subject to any laws or regulations applicable thereto, in a Place of Payment
for that series which is located outside the United States, an office or agency
where Bearer Securities of that series and related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Debt Securities of that series, if so provided pursuant to Section 3.01);
provided, however, that if the Debt Securities of that 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 (C) 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
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Registered Securities of that series may be surrendered for registration of
transfer, where Debt Securities of that series may be surrendered for exchange
and redemption, where Debt Securities of that series that are convertible may
be surrendered for conversion, 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
locations, and any change in the locations, of such offices or agencies. 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, except that Bearer Securities of that
series and the related Coupons may be presented and surrendered for payment at
the offices specified in the applicable Debt Security, and the Company hereby
appoints the Trustee, or in the case of Bearer Securities, such other agent as
is specified pursuant to Section 3.01, as its agent to receive all
presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer
Securities shall be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States; provided,
however, that, if the Debt Securities of a series are denominated and payable
in Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any additional amounts payable on Securities of such
series, if so provided pursuant to Section 3.01) shall be made at the office of
the Trustee or the Company's Paying Agent in the Borough of Manhattan, The City
and State of New York, if (but only if) payment in Dollars of the full amount
of such principal, premium, interest or additional amounts, as the case may be,
at all offices or agencies outside the United States maintained for the purpose
by the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
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 12.04. 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 and Coupons,
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if any, 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 and Coupons, 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
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:
(1) 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;
(2) 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
(3) 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.
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Subject to any applicable abandoned property law, 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 or Coupon 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, in its sole discretion, at the expense of the Company cause to be
transmitted in the manner and to the extent provided by Section 1.05, 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 12.05. Corporate Existence.
The Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence, rights
(charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company.
Section 12.06. Purchase of Debt Securities by Company.
If the Debt Securities of a series are listed on The Stock
Exchange of the United Kingdom and the Republic of Ireland and such stock
exchange shall so require, the Company will not purchase any Debt Securities of
that series by private treaty at a price (exclusive of expenses and accrued
interest) which exceeds 120% of the mean of the nominal quotations of the Debt
Securities of that series as shown in The Stock Exchange Daily Official List
for the last trading day preceding the date of purchase.
Section 12.07. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Section 12.05 (and, if so
specified pursuant to Section 3.01, any other covenant not set forth herein and
specified pursuant to Section 3.01 to be applicable to the Debt Securities of
any series, except as otherwise provided pursuant to Section 3.01) with respect
to the Debt Securities of any series if before the time for such compliance the
Holders of at least a majority in
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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 THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article.
Debt Securities of any series which are redeemable before
their Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified pursuant to Section 3.01 for Debt Securities of any
series) in accordance with this Article.
Section 13.02. Election to Redeem; Notice to Trustee.
The election of the Company to redeem (or, in the case of
Discount Securities, to permit the Holders to elect to surrender for
redemption) 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 13.03, the Company shall, at
least 60 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 13.03. Selection by Trustee of Debt Securities to Be
Redeemed.
Except in the case of a redemption in whole of the Bearer
Securities or the Registered Securities of such series, 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 the
minimum authorized
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denomination for 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 the minimum authorized denomination for Debt
Securities of such series pursuant to Section 3.02 in the Currency in which the
Debt Securities of such series are denominated. The portions of the principal
amount of Debt Securities so selected for partial redemption shall be equal to
the minimum authorized denominations for Debt Securities of such series
pursuant to Section 3.02 in the Currency in which the Debt Securities of such
series are denominated or any integral multiple thereof, except as otherwise
set forth in the applicable form of Debt Securities. In any case when more
than one Registered 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 Registered Security of such series.
If any Debt Security selected for partial redemption is
converted in part before termination of the conversion right with respect to
the portion of the Debt Security so selected, the converted portion of such
Debt Security shall be deemed (so far as may be) to be the portion selected for
redemption. Debt Securities which have been converted during a selection of
Debt Securities to be redeemed shall be treated by the Trustee as Outstanding
for the purpose of such selection.
The Trustee shall promptly notify the Company 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 13.04. 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 Thirteen, in the manner provided
in Section 1.05. 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.
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All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) 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,
(4) 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,
(5) 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,
(6) in the case of Debt Securities of any series that is
convertible, the conversion price, the date on which the right to
convert the principal of the Debt Securities of such series to be
redeemed will terminate and the place or places where such Debt
Securities may be surrendered for conversion,
(7) that, unless otherwise specified in such notice, Coupon
Securities of any series, if any, surrendered for redemption must be
accompanied by all Coupons maturing subsequent to the date fixed for
redemption, failing which the amount of any such missing Coupon or
Coupons will be deducted from the Redemption Price,
(8) the Place or Places of Payment where such Debt Securities
are to be surrendered for payment of the Redemption Price,
(9) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and
if such Bearer Securities may be exchanged for Registered Securities
not subject to redemption on this Redemption Date pursuant to Section
3.05(b) or otherwise, the last date on which such exchanges may be
made, and
(10) that the redemption is for a sinking fund, if such is
the case.
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Section 13.05. 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 12.04) an amount of money in the Currency or Currencies in
which such Debt Securities are denominated (except as provided pursuant to
Section 3.01) sufficient to pay the Redemption Price of such Debt Securities or
any portions thereof which are to be redeemed on that date.
Section 13.06. 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 in the Currency in which the Debt Securities of
such series are payable (except as otherwise specified pursuant to Section 3.01
or 3.10), 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 installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 12.03) and, unless otherwise specified
as contemplated by Section 3.01, only upon presentation and surrender of
Coupons for such interest; and provided, further, that, unless otherwise
specified as contemplated by Section 3.01, installments of interest on
Registered 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 3.07.
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.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
Redemption Date, the Redemption Price for such Coupon Security may be reduced
by an amount equal to the face amount of all such missing Coupons. If
thereafter the Holder of such Coupon shall surrender to any Paying Agent
outside the United States any such missing Coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted. The surrender of such missing
Coupon or Coupons may be waived by the
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Company and the Trustee, if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless.
Section 13.07. 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 3.01 (in the case of Registered
Securities) and at an office of the Trustee or such other office or agency of
the Company outside the United States as is specified pursuant to Section 3.01
(in the case of Bearer Securities) 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 his 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, and, in the case of a Coupon Security, with
appropriate Coupons attached. 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.
ARTICLE FOURTEEN
SINKING FUNDS
Section 14.01. 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 3.01 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 14.02. 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.
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Section 14.02. 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 (together with the unmatured
Coupons, if any, appertaining thereto) 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 sinking fund payment 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 purpose 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 14.03. 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 in the Currency or
Currencies in which the Debt Securities of such series are denominated (except
as provided pursuant to Section 3.01) and the portion thereof, if any, which is
to be satisfied by delivering and crediting Debt Securities of such series
pursuant to Section 14.02 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 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 14.02 and without the right to make any
optional sinking fund payment with respect to such series at such time.
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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 12.04) 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 12.04) 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 13.03 and the Company shall cause notice of the redemption
thereof to be given in the manner provided in Section 13.04. 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 13.06.
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 12.04) in cash
a sum, in the Currency or Currencies in which Debt Securities of such series
are denominated (except as provided pursuant to Sections 3.01 or 3.10), 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.
Neither the Trustee nor the Company shall redeem any Debt
Securities of a series with sinking fund moneys or mail any notice of
redemption of Debt Securities of such series by operation of the sinking fund
for such series during the
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continuance of a default in payment of interest, if any, on any Debt Securities
of such series or of any Event of Default (other than an Event of Default
occurring as a consequence of this paragraph) with respect to the Debt
Securities of such series, except that if the notice of redemption shall have
been provided in accordance with the provisions hereof, the Trustee (or the
Company, if the Company is then acting as its own Paying Agent) shall redeem
such Debt Securities if cash sufficient for that purpose shall be deposited
with the Trustee (or segregated by the Company) for that purpose in accordance
with the terms of this Article. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default
shall occur and any moneys thereafter paid into such sinking fund shall, during
the continuance of such default or Event of Default, be held as security for
the payment of the Debt Securities and Coupons, if any, of such series;
provided, however, that in case such default or Event of Default shall have
been cured or waived as provided herein, such moneys shall thereafter be
applied on or prior to the next sinking fund payment date for the Debt
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section.
ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Applicability of Article.
If, pursuant to Section 3.01, provision is made for the
defeasance of Debt Securities of a series, and if the Debt Securities of such
series are Registered Securities and denominated and payable only in Dollars
(except as provided pursuant to Section 3.01) then the provisions of this
Article shall be applicable except as otherwise specified pursuant to Section
3.01 for Debt Securities of such series. Defeasance provisions, if any, for
Debt Securities denominated in a Foreign Currency or Currencies or for Bearer
Securities may be specified pursuant to Section 3.01.
Section 15.02. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations.
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) if
so specified pursuant to Section 3.01, the Company shall cease to be under any
obligation to comply with any obligation of the Company or restrictive covenant
added for the benefit of such series pursuant to Section 3.01) ("covenant
defeasance option") at any time after the applicable conditions set forth below
have been satisfied:
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(1) 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;
(2) 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 6.08 and for purposes of the Trust Indenture Act
with respect to the Debt Securities of any series;
(3) 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;
(4) 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;
(5) no Event of Default or event (including such deposit)
which, with notice or lapse of time or both, would become an Event of
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 5.01(5) or Section 5.01(6) or event which with the giving of
notice or lapse of time, or both, would become an Event of Default
under Section 5.01(5) shall have occurred and be continuing on the
91st day after such date; and
(6) the Company shall have delivered to the Trustee an
Opinion of Counsel or a ruling from the Internal Revenue Service to
the effect that such deposit, defeasance or Discharge shall not cause
the Holders of the Debt Securities of such series to recognize income,
gain or loss for Federal income tax purposes.
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Notwithstanding the foregoing, if the Company exercises its covenant defeasance
option and an Event of Default under Section 5.01(5) or Section 5.01(6) or
event which with the giving of notice or lapse of time, or both, would become
an Event of Default under Section 5.01(5) or Section 5.01(6) 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.
Money and securities held in trust pursuant to a legal defeasance shall not be
subject to Article Sixteen.
"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 3.04, 3.05,
3.06, 6.07, 12.03 and 15.03 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 timely 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 a 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 15.03. Deposited Moneys and U.S. Government
Obligations to Be Held in Trust.
All moneys and U.S. Government Obligations deposited with the
Trustee pursuant to Section 15.02 in respect of Debt Securities of a series
shall be held in trust and applied by it,
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in accordance with the 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 15.04. Repayment to Company.
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 15.02.
The provisions of the last paragraph of Section 12.04 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 15.02.
ARTICLE SIXTEEN
SUBORDINATION
Section 16.01. Agreement to Subordinate.
The Company, for itself, its successors and assigns, covenants
and agrees, and each Holder of Debt Securities of any series (or of any Coupons
appertaining thereto) by his acceptance thereof, likewise covenants and agrees,
that the indebtedness represented by the Debt Securities of such series then
Outstanding (and any Coupons appertaining thereto) and the payment of the
principal of (and premium, if any) and interest on each and all of the Debt
Securities of such series (including, without limitation, any payment of
Coupons appertaining thereto) is hereby expressly subordinated, to the extent
and in the manner hereinafter set forth, in right of payment to the prior
payment in full of all Senior Indebtedness. Each reference in this Article to
a "Debt Security" or "Debt Securities" refers to the Debt Securities of a
particular series, and references to a "Coupon" or "Coupons" refer to the
Coupons appertaining to the Debt Securities of such series. Without limiting
the generality of the immediately preceding sentence, if more than one series
of Debt Securities are outstanding at any time, (i) the provisions of this
Article shall be applied separately to each such series, and (ii) references to
the Trustee refer to the Trustee for the Debt Securities of such series.
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Section 16.02. Distribution on Dissolution,
Liquidation and Reorganization; Subrogation of Debt Securities.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization, of the Company, whether
voluntary or involuntary and whether in bankruptcy, insolvency, reorganization,
receivership or other proceedings or upon an assignment for the benefit of
creditors or any other marshalling of the assets and liabilities of the Company
or otherwise (subject to the power of a court of competent jurisdiction to make
other equitable provision reflecting the rights conferred in this Indenture
upon the Senior Indebtedness and the holders thereof with respect to the Debt
Securities and the Holders thereof by a plan of reorganization under applicable
bankruptcy law):
(a) the holders of all Senior Indebtedness shall be entitled
to receive payment in full of the principal thereof (and premium, if
any) and interest due thereon before the Holders of the Debt
Securities (or of any Coupons) are entitled to receive any payment
upon the principal (and premium, if any) or interest on indebtedness
evidenced by the Debt Securities (or any payment of any Coupons); and
(b) any payment or distribution of the Company of any kind or
character, whether in cash, property or securities, to which the
Holders of the Debt Securities (or of any Coupons) or the Trustee
would be entitled except for the provisions of this Article Sixteen
shall be paid by the liquidating trustee or agent or other person
making such payment or distribution, whether a trustee in bankruptcy,
a receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the principal of (and premium, if any)
and interest on the Senior Indebtedness held or represented by each,
to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness;
and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, shall be received
by the Trustee, any Paying Agent or the Holders of the Debt Securities
(or any Coupons) before all Senior Indebtedness is paid in full, such
payment or distribution shall be paid over, upon written notice to the
Trustee or such Paying Agent, to the holder of such Senior
Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which
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any instrument evidencing any of such Senior Indebtedness may have
been issued, ratably as aforesaid, for application to payment of all
Senior Indebtedness remaining unpaid until all such Senior
Indebtedness shall have been paid in full, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness.
The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation shall not be deemed a
dissolution, windingup, liquidation or reorganization for the purposes of this
Section 16.02.
Subject to the payment in full of all Senior
Indebtedness, the Holders of the Debt Securities (and of any Coupons) shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to Senior Indebtedness until the principal of (and premium, if any)
and interest on the Debt Securities (including, without limitation, payment of
the Coupons) shall be paid in full, and no such payments or distributions to
the Holders of the Debt Securities (or of any Coupons) of cash, property, or
securities otherwise distributable to the holders of Senior Indebtedness shall,
as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of the Debt Securities (and of any Coupons) be
deemed to be a payment by the Company to or on account of the Debt Securities
(or of any Coupons). It is understood that the provisions of this Article
Sixteen are and are intended solely for the purpose of defining the relative
rights of the Holders of the Debt Securities (and of any Coupons), on the one
hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article Sixteen or elsewhere in this
Indenture or in the Debt Securities (or any Coupons) is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of the Debt Securities (and of any Coupons), the
obligation of the Company, which is unconditional and absolute, to pay to the
Holders of the Debt Securities (and of any Coupons) the principal of (and
premium, if any) and interest on the Debt Securities (including, without
limitation, payment of any Coupons) as and when the same shall become due and
payable in accordance with their terms, or to affect the relative rights of the
Holders of the Debt Securities (or of any Coupons) and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or in
the Debt Securities (or Coupons) prevent the Trustee or the Holder of any Debt
Security (or any Coupon) from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article Sixteen of the
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holders of Senior Indebtedness in respect of cash, property or securities of
the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Section 16.02, the Trustee and any Paying Agent, subject to
the provisions of Section 6.03, shall be entitled to rely upon a certificate or
other writing of the liquidating trustee or agent or other Person making any
distribution to the Trustee for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent to this Article Sixteen.
Except as specifically set forth herein, neither the Trustee
nor any Paying Agent, however, shall be deemed to owe any fiduciary or other
duty to the holders of Senior Indebtedness. Neither the Trustee nor any Paying
Agent shall be liable to any such holder if it shall in good faith pay or
distribute to or on behalf of Holders of Debt Securities (or of any Coupons) of
the Company moneys or assets to which any holder of Senior Indebtedness shall
be entitled by virtue of this Article Sixteen or any other instrument.
If the Trustee or any Holder of Debt Securities (and of any
Coupons) does not file a proper claim or proof of debt in the form required in
any proceeding referred to above prior to 30 days before the expiration of the
time to file such claim in such proceeding, then the holder of any Senior
Indebtedness is hereby authorized, and has the right, to file an appropriate
claim or claims for or on behalf of such Holder of Debt Securities (or of any
Coupons).
Section 16.03. No Payment on Debt Securities in Event of
Default on Senior Indebtedness.
No payment by the Company on account of principal (or premium,
if any), sinking funds or interest on the Debt Securities (including, without
limitation, payment of any Coupons) shall be made unless full payment of
amounts then due for principal, premium, if any, sinking funds, and interest on
Senior Indebtedness has been made or duly provided for.
Section 16.04. Payments on Debt Securities Permitted.
Nothing contained in this Indenture or in any of the Debt
Securities (or any Coupons) shall (a) affect the obligation of the Company to
make, or prevent the Company from making, at any time except as provided in
Sections 16.02 and 16.03, payments of principal (and premium, if any) or
interest on the Debt Securities (including, without limitation, payment of any
Coupons) or (b) prevent the application by the Trustee of any
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moneys deposited with it hereunder to the payment of or on account of the
principal of (and premium, if any) or interest on the Debt Securities
(including, without limitation, the payment of any Coupons), unless the Trustee
shall have received at its Corporate Trust Office written notice of any event
prohibiting the making of such payment more than two Business Days prior to the
date fixed for such payment.
Section 16.05. Authorization of Holders to Trustee to Effect
Subordination.
Each Holder of Debt Securities (or of any Coupons) by his
acceptance thereof and any Paying Agent (other than the Company) authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article Sixteen
and appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 16.06. Notices to Trustee.
The Company shall give prompt written notice to the Trustee
and any Paying Agent (other than the Company) of any fact known to the Company
which would prohibit the making of any payment to or by the Trustee or such
Paying Agent in respect of the Debt Securities (or any Coupons) pursuant to
this Article Sixteen. Failure to give such notice shall not affect the
subordination of the Debt Securities (or any Coupons) to Senior Indebtedness.
Notwithstanding the provisions of this Article or any other provisions of this
Indenture, neither the Trustee nor any Paying Agent (other than the Company)
shall be charged with knowledge of the existence of any Senior Indebtedness or
of any event which would prohibit the making of any payment of moneys to or by
the Trustee or such Paying Agent, unless and until the Trustee or such Paying
Agent shall have received (in the case of the Trustee, at its Corporate Trust
Office) written notice thereof from the Company or from the holder of any
Senior Indebtedness or from the trustee for any such holder, together with
proof satisfactory to the Trustee of such holding of Senior Indebtedness or of
the authority of such trustee; provided, however, that if at least two Business
Days prior to the date upon which by the terms hereof any such moneys may
become payable for any purpose (including, without limitation, the payment of
either the principal of (and premium, if any) or interest on any Debt Security
(including, without limitation, the payment of any Coupons)) the Trustee or any
such Paying Agent shall not have received with respect to such moneys the
notice provided for in this Section 16.06, then, anything herein contained to
the contrary notwithstanding, the Trustee or any such Paying Agent shall have
full power and authority to receive such moneys and to apply the same to the
purpose for which they were received, and shall not be affected by any notice
to the contrary, which may be received by it less than two Business Days prior
to such date. The Trustee or any such Paying Agent shall be entitled to rely
on the delivery to it of a written notice by a Person representing
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himself to be a holder of Senior Indebtedness (or a trustee on behalf of such
holder) to establish that such a notice has been given by a holder of Senior
Indebtedness or a trustee on behalf of any such holder. In the event that the
Trustee or any such Paying Agent determines in good faith that further evidence
is required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Sixteen, the Trustee or any such Paying Agent may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee or any such
Paying Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article Sixteen and, if such evidence is not furnished, the Trustee or any
such Paying Agent may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 16.07. Trustee as Holder of Senior Indebtedness.
Subject to the provisions of Section 6.13, the Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article Sixteen in respect of any Senior Indebtedness at any time held by it to
the same extent as any other holder of Senior Indebtedness and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as
such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.07.
Section 16.08. Modifications of Terms of Senior Indebtedness.
Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under any instrument creating or evidencing Senior Indebtedness,
including, without limitation, the waiver of default thereunder, may be made or
done all without notice to or assent from the Holders of the Debt Securities
(or of any Coupons) or the Trustee.
No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Indebtedness is outstanding or of such Senior Indebtedness, whether or
not such release is in accordance with the provisions of any applicable
document, shall in any way alter or affect any of the provisions of this
Article Sixteen or of the Debt
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Securities (or of any Coupons) relating to the subordination thereof.
Section 16.09. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article Sixteen, the Trustee and the Holders of the Debt
Securities (and of any Coupons) shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or upon a certificate of the trustee
in bankruptcy, liquidating trustee, custodian, receiver, assignee for the
benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Debt Securities (or
of any Coupons), for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable therein,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Sixteen.
Section 16.10. Article Sixteen Not to Prevent Events of
Default.
No provision of this Article Sixteen shall prevent the
occurrence of any default or Event of Default hereunder.
Section 16.11. Certain Conversions Not Deemed Payment.
For the purposes of this Article Sixteen only, in the case of
Debt Securities of any series that is convertible, (i) the issuance and
delivery of junior securities (as hereinafter defined) upon conversion of such
Debt Securities in accordance with Article Seventeen shall not be deemed to
constitute a payment or distribution on account of the principal of (or
premium, if any) or interest on such Debt Securities or on account of the
purchase or other acquisition of such Debt Securities, and (2) the payment,
issuance or delivery of cash, property or securities (other than junior
securities) upon conversion of a Debt Security of such series shall be deemed
to constitute payment on account of the principal of such Debt Security. For
the purposes of this Section, the term "junior securities" means (a) shares of
any stock of any class of the Company and (b) securities of the Company which
are subordinated in right of payment to all Senior Indebtedness which may be
Outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Debt
Securities are so subordinated as provided in this Article Sixteen. Nothing
contained in this Article Sixteen or elsewhere in this Indenture or in the Debt
Securities is intended to or shall impair, as among the Company, its
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creditors other than holders of Senior Indebtedness and the Holders of the Debt
Securities, the right, which is absolute and unconditional, of the Holder of
any Debt Security of any series that is convertible to convert such Debt
Security in accordance with Article Seventeen.
ARTICLE SEVENTEEN
CONVERSION
Section 17.01. Applicability; Conversion Privilege.
Except as otherwise specified pursuant to Section 3.01 for
Debt Securities of any series, the provisions of this Article Seventeen shall
be applicable to any Debt Securities that are convertible into Common Stock.
Each reference in this Article to a "Debt Security" or "Debt Securities" refers
to the Debt Securities of a particular series that is convertible into Common
Stock, and references to a "Coupon" or "Coupons" refer to the Coupons
appertaining to the Debt Securities of such series. Without limiting the
generality of the immediately preceding sentence, if two or more series of Debt
Securities with conversion privileges are outstanding at any time, (i) the
provisions of this Article shall be applied separately to each such series, and
(ii) references to the Trustee refer to the Trustee for the Debt Securities of
such series. If so provided pursuant to Section 3.01 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 Seventeen, all or any
part (if the portion to be converted and the remaining portion of such Debt
Security are in authorized denominations for that series of Debt Securities) of
such Debt Security into shares of Common Stock, at any time during the period
specified in the terms of the Debt Securities of the series pursuant to Section
3.01, at the Conversion Price in effect on the date of conversion, 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 17.02. Conversion Procedure; Conversion Price;
Fractional Shares.
(a) Except as otherwise specified as contemplated by Section
3.01 for Debt Securities of any series, each Debt Security of such series 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 3.01 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
<PAGE> 128
119
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
17.09 and Section 17.02(c). The Company may, but shall not be required, in
connection with any 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 17.03(4), 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, or, in the case of Bearer
Securities, together with all unmatured Coupons and any matured Coupons in
default attached thereto, at the office of the Conversion Agent or at such
other place or places, if any, specified pursuant to Section 3.01 (in the case
of Registered Securities) and at an office of the Conversion Agent or at such
other place or places, if any, outside of the United States as is specified
pursuant to Section 3.01 (in the case of Bearer Securities), and shall give
written notice to the Company at said office or place that he elects to convert
the same and shall state in writing therein the principal amount of Debt
Securities to be converted and the name or names (with addresses) in which he
wishes the certificate or certificates for Common Stock to be issued.
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 after the
surrender of a Debt Security for conversion, issue and deliver at said office
or place to the Holder of a Debt Security, or to his nominee or nominees,
certificates for the number of full shares of Common Stock to which he shall be
entitled as aforesaid, together, subject to the last sentence of paragraph (a)
above, with cash in lieu of any fraction of a share to which he would otherwise
be entitled. The Company shall not be required to delivery 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.
(c) If at the time of surrender pursuant to Section 17.02(a),
the Holder of a Bearer Security is unable to produce all unmatured Coupon or
Coupons or matured Coupon or Coupons in default, such conversion may be
effected if the Bearer Securities
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120
to be surrendered for conversion are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived by
the Company and the Trustee if there is furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Bearer Security shall surrender to
any Paying Agent any such missing Coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that except as otherwise provided in Section
12.03, interest represented by Coupons shall be payable only upon presentation
and surrender of those Coupons at an office or agency located outside the
United States.
(d) 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.
(e) 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 17.08), a new Debt Security or Securities in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Debt Security, together, in the case of Bearer Securities,
with any unmatured Coupons and matured Coupons in default attached thereto.
Section 17.03. 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:
(1) 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 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
<PAGE> 130
121
of capital 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 date (or,
if no record date, the effective date) for such event. An adjustment
made pursuant to this Section 17.03(1) 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 17.03(1), 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).
(2) 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 or substantially 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 such rights or warrants plus the number of shares or
securities which the aggregate offering price of the total number of
shares or securities so offered for subscription or purchase (or the
aggregate purchase price of
<PAGE> 131
122
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.
(3) In case the Company shall, at any time or from time to
time while any of such Debt Securities are outstanding, distribute to
all or substantially all holders of shares of its Common Stock
(including any such distribution 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 (to the extent paid from
current or retained earnings of the Company) or (ii) dividends payable
in shares of Common Stock for which adjustment is made under Section
17.03(1)) or rights or warrants to subscribe for or purchase
securities of the Company (excluding those referred to in Section
17.03(2)), then in each such case 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 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, howeve, 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.
<PAGE> 132
123
(4) The Company shall be entitled to make such additional
adjustments in the Conversion Price, in addition to those required by
subsections 17.3(1), 17.3(2) and 17.3(3), 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.
(5) In any case in which this Section 17.03 shall require
that any adjustment be made effective as of or retroactively
immediately following a record date, the Company may elect to defer
(but only for five (5) Trading Days following the filing of the
statement referred to in Section 17.05) 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.
(6) All calculations under this Section 17.03 shall be made
to the nearest cent or one-hundredth of a share or security, with
one-half cent and 0.005 of a share, respectively, being rounded
upward. Notwithstanding any other provision of this Section 17.03,
the Company shall not be required to make any adjustment of the
Conversion Price unless such adjustment would require an increase or
decrease of at least 1% of such price. Any lesser adjustment shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment or
adjustments so carried forward, shall amount to an increase or
decrease of at least 1% in such price. Any adjustments under this
Section 17.03 shall be made successively whenever an event requiring
such an adjustment occurs.
(7) In the event that at any time, as a result of an
adjustment made pursuant to this Section 17.03, 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 (1) through (6) of this
<PAGE> 133
124
Section 17.03, and the provision of Sections 17.1, 17.2 and 17.4
through 17.9 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.
(8) 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 17.3(5)
hereof, with respect to any Debt Security that is converted prior to
the time such adjustment otherwise would be made.
Section 17.04. Consolidation or Merger of the Company.
In case of either (a) any consolidation or merger to which the
Company is a party, other than a merger or consolidation in which the Company
is the surviving or continuing corporation and which does not result in a
reclassification of, or change (other than a change in par value or from par
value to no par value or from no par value to par value) 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, then 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 receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of shares
of Common Stock into which such Debt Securities should 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 Seventeen (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 receivable upon such
consolidation, merger, sale or conveyance (provided that, if the kind or amount
of securities, cash or other property 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 17.04. The provisions
of this Section 17.04 shall apply similarly to successive consolidations,
mergers, sales or conveyances.
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125
Section 17.05. Notice of Adjustment.
Whenever an adjustment in the Conversion Price with respect to
a series of Debt Securities is required:
(1) 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
(2) 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 1.05. Any notice so given shall be conclusively
presumed to have been duly given, whether or not the Holder receives
such notice.
Section 17.06. Notice in Certain Events.
In case:
(1) 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
(2) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion
Price pursuant to this Article Seventeen;
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 applicable Debt Securities in the manner provided in
Section 1.05, 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
Seventeen, or, if a record is not to be taken, the date as of which the holders
of record of Common Stock entitled to such distribution, rights or
<PAGE> 135
126
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
Seventeen 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.
Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in clause (1), (2)
or (3) of this Section.
Section 17.07. 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 issued 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. The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debt Securities will upon issue be fully paid and
nonassessable and free from all liens and charges and, except as provided in
Section 17.08, taxes with respect to the issue thereof.
(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 further covenants
that so long as the Common Stock shall be included for quotation on NASDAQ, the
Company will, if permitted by the rules of such exchange, list and keep listed
all Common Stock issuable upon conversion of the Debt Securities, and the
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127
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
any other national securities exchange upon which the outstanding Common Stock
is listed at the time of such delivery.
Section 17.08. Taxes on Conversion.
The issue of stock certificates on conversion of Debt
Securities shall be made without charge to the converting Holder for any tax in
respect of the issue thereof, and 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 (in the case of Registered
Securities), 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 17.09. Conversion After Record Date.
If any Registered 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 Registered Securities called for
redemption on a Redemption Date between such record date and Interest Payment
Date), the Holder of such Registered Securities at the close of business on
such record date shall be entitled to receive the interest payable on such
Registered Securities on such Interest Payment Date notwithstanding the
conversion thereof. Registered 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 Registered 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 and in the Currency acceptable
to the Company of an amount equal to the interest payable on such Interest
Payment Date on the Registered Securities being surrendered for conversion.
Except as provided in this Section 17.09 and Section 17.02(c), no adjustments
in respect of payments of interest on Debt Securities surrendered for
conversion or any dividends or distributions or interest on the Common Stock
issued upon conversion shall be made upon the conversion of any Debt
Securities.
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128
Section 17.10. Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to this Article shall be conclusive if made in good faith
and in accordance with the provisions of this Article, absent manifest error.
Section 17.11. 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.
_____________
This instrument may be executed in any number of counterparts,
each of which so executed shall constitute an original and all of which
together shall constitute one and the same instrument.
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129
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.
UNITED COMPANIES FINANCIAL
CORPORATION
By:___________________________
Title:________________________
Attest:
______________________________
Title:
Seal STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:___________________________
Title:________________________
Attest:
______________________________
Title:
Seal
<PAGE> 139
130
STATE OF __________ )
: ss.:
COUNTY OF _________ )
On the ________ day of ______________, 1994, before me
personally came ________________ to me known, who, being by me duly sworn, did
depose and say that he/she resides at __________________________________; that
he/she is ________________________ of United Companies Financial Corporation,
one of the corporations described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like authority.
______________________________
Notary Public
Seal
<PAGE> 140
131
COMMONWEALTH OF MASSACHUSETTS )
: ss:
COUNTY OF SUFFOLK )
On the _______ day of __________, 1994, before me personally
came _________________, to me known, who, being by me duly sworn, did depose
and say that he/she resides at ______________________________________________;
that he/she is _________________________________________________________, one
of the corporations described in and which executed the foregoing instrument;
that he/she knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he/she signed his/her name
thereto by like authority.
______________________________
Notary Public
SEAL
<PAGE> 141
EXHIBIT A
(FORMS OF CERTIFICATION)
(FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR INTEREST PRIOR TO AN EXCHANGE DATE)
CERTIFICATE
______________________________
(Insert title or sufficient description
of Debt Securities to be delivered)
This certificate is delivered pursuant to the Indenture, dated
as of _________ __, 1994 (as amended, supplemented or otherwise modified from
time to time, the "Indenture"), between United Companies Financial Corporation
and ( ), as Trustee. Unless otherwise defined herein, terms
defined in the Indenture are used herein as so defined.
This is to certify that as of the date hereof and except as
set forth below ___________ principal amount of the above captioned securities
(the "Debt Securities") held by you for our account (i) is owned by person(s)
that are not United States person(s) (as defined below), (ii) is owned by
United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury regulations) ("financial institutions") purchasing for their
own account or for resale, or (b) United States person(s) who acquired the Debt
Securities through foreign branches of United States financial institutions and
who hold the Debt Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise the Company or the Company's agent that it will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the Treasury regulations
thereunder), or (iii) is owned by United States or foreign financial
institution(s) for the purpose of resale during the restricted period (as
defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury
regulations), and in addition if the owner of the Debt Securities is a United
States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)) this is to further
certify that such financial institution has not acquired the Debt Securities
for the purpose of resale directly or indirectly to a United States person or
to a person within the United States or its possessions.
<PAGE> 142
2
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the beneficial interest in the temporary Global Note held by you for our
account in accordance with your operating procedures if any applicable
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certification applies as of such date.
This certificate excepts and does not relate to ___________
principal amount of Debt Securities held by you for our account as to which we
are not able to provide a certificate in this form. We understand that
exchange of such portion of the temporary Global Note for definitive Bearer
Securities or interests in a permanent Global Note cannot be made until we are
able to provide a certificate in this form.
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. "United States" means the United States of America (including
the States and the District of Columbia) and its "possessions" which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
Dated: _______________________, 19__
(To be dated no earlier than the 10th day before the Exchange Date)
By:___________________________
As, or as agent for, the beneficial
owner(s) of the portion of
the temporary global Note to which this
certificate relates.
<PAGE> 143
EXHIBIT B
(FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR AND
CEDEL, S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL NOTE)
CERTIFICATE
__________________________
(Insert title or sufficient description
of Debt Securities to be delivered)
This certificate is delivered pursuant to the Indenture, dated
as of _________ __, 1994 (as amended, supplemented or otherwise modified from
time to time, the "Indenture"), between United Companies Financial Corporation
and ( ), as Trustee. Unless otherwise defined
herein, terms defined in the Indenture are used herein as so defined.
The undersigned certifies that, based solely on certifications
we have received in writing, by tested telex or by electronic transmission from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount set forth below (our "Member Organizations")
substantially to the effect set forth in the Indenture as of the date hereof,
__________ principal amount of the above-captioned Debt Securities (i) is owned
by person(s) that are not United States person(s) (as defined below), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury regulations) ("financial institutions") purchasing for their
own account or for resale, or (b) United States person(s) who acquired the Debt
Securities through foreign branches of United States financial institutions and
who hold the Debt Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution has agreed, on its own behalf or through its agent, that
we may advise the Company or the Company's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
of 1986, as amended, and the Treasury regulations thereunder), or (iii) is
owned by United States or foreign financial institution(s) for the purpose of
resale during the restricted period (as defined in Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury regulations), and in
addition United States or foreign financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Debt Securities for the purpose of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
<PAGE> 144
2
We further certify (i) that we are not making available for
exchange or collection of any interest any portion of the temporary Global Note
excepted in such certifications and (ii) that as of the date hereof we have not
received any notification from any of our Member Organizations to the effect
that the statements made by such Member Organizations with respect to any
portion of the part submitted herewith for exchange or collection of any
interest are no longer true and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. "United States" means the United States of America (including
the States and the District of Columbia) and its "possessions" which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
Dated: _________________________, 19__
(To be dated no earlier than the
Exchange Date)
By:___________________________
(MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, BRUSSELS OFFICE, as
Operator of the Euro-Clear System)
(CEDEL, S.A.)
<PAGE> 1
EXHIBIT 4.6
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
UNITED COMPANIES FINANCIAL CORPORATION
On _________, 19__, pursuant to the authority granted to and vested in
the Board of Directors (hereinafter called the "Board of Directors" or the
"Board") of United Companies Financial Corporation, a corporation organized and
existing under the Louisiana Business Corporation Law (hereinafter called the
"Corporation"), and in accordance with the provisions of Section 33 of the
Louisiana Business Corporation Law and Article III of the Corporation's
Articles of Incorporation (the "Articles of Incorporation"), the Board of
Directors voted in favor of amending Article III of the Articles of
Incorporation to create a series of preferred stock, par value $2.00, of the
Corporation and to state the designation and number of shares, and to fix the
preferences, limitations and relative rights thereof, all as set forth
hereinafter.
"SECTION 6 -- ____% (CUMULATIVE) (CONVERTIBLE) PREFERRED STOCK, SERIES
___, ISSUE PRICE $_______ PER SHARE.
PARAGRAPH 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as _____% (Cumulative) (Convertible) Preferred Stock, Series
____, Issue Price $______ per share (the "Preferred Stock"), and the number of
shares constituting the Preferred Stock shall be __________. Such number of
shares may be decreased by a resolution adopted by the Board of Directors;
provided, that no decrease shall reduce the number of shares of the Preferred
Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding
options, rights, or warrants or upon the conversion of any outstanding
securities issued by the Corporation that are convertible into the Preferred
Stock.
PARAGRAPH 2. RANKING. Any class or classes of stock of the
Corporation shall be deemed to rank as provided in this Paragraph 2:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
PARAGRAPH 3. DIVIDENDS.
(a) For purposes of this Paragraph 3, each of __________________,
on which any share of the Preferred Stock shall be outstanding shall be deemed
to be a "Dividend Payment Date." Commencing on ____________, 19___, the
holders of shares of the Preferred Stock shall be entitled to receive, when and
as declared by the Board of Directors of the Corporation out of funds legally
available therefor, (cumulative) dividends payable in arrears at the rate of
$______ per year on each share of the Preferred Stock and no more. Dividends
payable on ___________, 19___ shall be prorated based on the
<PAGE> 2
number of days that shall have elapsed since the date of original issue of the
Preferred Stock. Dividends payable on the Preferred Stock for any period
greater or less than a full dividend period shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
(b) The Board of Directors may fix a record date for the
determination of holders of shares of the Preferred Stock entitled to receive
payment of a dividend declared thereon, which record date shall be not more
than ____ days prior to the date fixed for the payment thereof.
(c) On each Dividend Payment Date, all dividends which shall have
accrued on each share of the Preferred Stock outstanding on such Dividend
Payment Date shall accumulate and be deemed to become "due." Any dividend
which shall not be paid on the Dividend Payment Date on which it shall become
due shall be deemed to be "past due" until such dividend shall be paid or until
the share of the Preferred Stock with regard to which such dividend became due
shall no longer be outstanding, whichever is the earlier to occur. No interest
or sum of money in lieu of interest shall be payable with regard to any
dividend payment or payments which are past due. Dividends paid on shares of
the Preferred Stock in an amount less than the total amount of such dividends
at the time accumulated and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
(d) Other provisions relating to dividends on the outstanding shares
of the Preferred Stock are set forth below in this Paragraph 3:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
PARAGRAPH 4. GENERAL, CLASS AND SERIES, AND VOTING RIGHTS. The voting
rights, if any, and certain other provisions relating to the Preferred Stock
shall be as provided in this Paragraph 4:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
PARAGRAPH 5. REDEMPTION.
(a) The shares of the Preferred Stock shall be redeemable as
provided in this Paragraph 5:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
- 2 -
<PAGE> 3
PARAGRAPH 6. CONVERSION.
(a) The shares of the Preferred Stock shall be convertible as
provided in this Paragraph 6:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
PARAGRAPH 7. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation (for the purposes of this
Paragraph 7, a "Liquidation"), the holder of each share of the Preferred Stock
then outstanding shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders, in accordance with
the provisions of this Paragraph 7:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
PARAGRAPH 8. PAYMENTS.
(a) The Corporation may provide funds for any payment of any
amount distributable with respect to any the Preferred Stock under Paragraph(s)
___ hereof as set forth in this Paragraph 8:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
PARAGRAPH 9. STATUS OF REACQUIRED SHARES. Shares of the Preferred
Stock issued and reacquired by the Corporation (including, without limitation,
shares of the Preferred Stock which have been redeemed pursuant to the terms of
Paragraph 5 hereof and shares of the Preferred Stock which have been converted
into shares of Common Stock) shall have the status of authorized and unissued
shares of Preferred Stock, undesignated as to series and subject to later
issuance.
PARAGRAPH 10. PREEMPTIVE RIGHTS. Holders of shares of the Preferred
Stock are entitled to such preemptive or subscription rights, if any, in
respect of any securities of the Corporation as provided in this Paragraph 10:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
- 3 -
<PAGE> 4
PARAGRAPH 11. LEGAL HOLIDAYS. For purposes hereof, legal holidays
shall be treated as provided in this Paragraph 11:
_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________.
Executed this _______ day of _____________, 19___, by the undersigned
officers of the Corporation in the presence of the undersigned competent
witnesses.
UNITED COMPANIES
WITNESSES: FINANCIAL CORPORATION
______________________________ By:________________________________
Name:______________________________
______________________________ Title:_____________________________
By:________________________________
Name:___________________, Secretary
- 4 -
<PAGE> 5
STATE OF LOUISIANA
PARISH OF EAST BATON ROUGE
I, _______________________, a Notary Public duly qualified and
commissioned in and for the Parish and State aforesaid, do hereby certify that
on this ____ day of ________, 19___, personally appeared before me
_______________________ and ____________________, who, being by me first duly
sworn, declared and acknowledged that they are the ___________________ and
Secretary, respectively, of United Companies Financial Corporation, that they
signed the foregoing document as ___________________ and Secretary,
respectively, of that Corporation and the statements contained therein are
true.
________________________________
Notary Public
- 5 -
<PAGE> 1
EXHIBIT 4.7
SERIES ____________ SERIES ____________
PREFERRED STOCK PREFERRED STOCK
UNITED COMPANIES FINANCIAL CORPORATION
Incorporated under the laws of
the State of Louisiana
Number P _______ Shares _______
See Reverse for
Certain Definitions CUSIP ______________________________
This Certificate is transferable
in New York, New York and
in ______________________.
This certifies that ______________________________________ is the
owner of _________________________ fully paid and non-assessable shares of the
series ________________ preferred stock, $2.00 par value per share, of UNITED
COMPANIES FINANCIAL CORPORATION transferable in person or by duly authorized
attorney upon surrender of this certificate properly endorsed. This
certificate and the shares represented hereby are subject to the provision of
the Articles of Incorporation, all amendments thereto, and the Bylaws of the
Corporation, and to the rights, preferences and voting powers of the Preferred
Stock of the Corporation now or hereinafter outstanding, the terms of all such
provisions, rights, preferences and voting powers being incorporated herein by
reference. This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated
Secretary Chairman
Countersigned and Registered:
(NAME OF TRANSFER AGENT) (SEAL)
Transfer Agent and Registrar
By
Authorized Officer
<PAGE> 2
(Reverse Side of Preferred Stock Certificate)
UNITED COMPANIES FINANCIAL CORPORATION
THIS CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND
WITHOUT CHARGE, A SUMMARY OF THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS OF THE SHARES OF EACH CLASS AND OF EACH SERIES OF PREFERRED OR
SPECIAL CLASS OF ITS AUTHORIZED CAPITAL STOCK, SO FAR AS THE SAME HAVE BEEN
FIXED, AND THE AUTHORITY OF THE BOARD TO ESTABLISH OTHER SERIES AND TO FIX THE
RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF THE SHARES OF ANY CLASS OR
SERIES BY AMENDMENT OF THE ARTICLES.
__________
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR
DESTROYED THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
__________
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- a tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT -- __________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors Act
____________ (State)
Additional abbreviations may also be used though not in
the above list.
2
<PAGE> 3
__________
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
__________________________________________
/________________________________________/
(Please print or typewrite name and address of assignee)
________________________________________________________________________________
_______________________________________________________________________ shares
of the preferred stock represented by the within Certificate and does hereby
irrevocably constitute and appoint _____________________________________________
Attorney to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.
Dated:
Signature _______________________________________________________________
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the Certificate in every
particular, without alteration or enlargement or any change
whatever.
Signature Guaranteed:
_________________________________
_________________________________
3
<PAGE> 1
EXHIBIT 5.1
STROOCK & STROOCK & LAVAN
SEVEN HANOVER SQUARE
NEW YORK, NEW YORK 10004
September 27, 1994
United Companies Financial Corporation
4041 Essen Lane
Baton Rouge, Louisiana 70809
Re: United Companies Financial Corporation
Registration Statement on Form S-3 (No. 33-55227)
Gentlemen:
We have acted as special counsel for United Companies Financial Corporation, a
Louisiana corporation (the "Company"), in connection with the registration by
the Company of (A) up to $200,000,000 aggregate initial offering price of its
(i) unsecured debt securities (the "Debt Securities"), which may be either
senior or subordinated and (ii) shares of its preferred stock, par value $2.00
per share (the "Preferred Stock" and together with the Debt Securities, the
"Securities") and (B) an indeterminate amount of shares of its common stock,
par value $2.00 per share, and associated preferred share purchase rights and
Debt Securities that may be issued upon conversion or exchange of Securities as
set forth in the Registration Statement on Form S-3 (No. 33-55227) (the
"Registration Statement") that has been filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act").
The Securities are to be issued, separately or together, in one or more series
and are to be sold from time to time as set forth in the Registration
Statement, the prospectus contained therein and any amendments or supplements
thereto.
The senior Debt Securities and the subordinated Debt Securities are to be
issued pursuant to separate Indentures (each, an "Indenture") between the
Company and The First National Bank of Chicago, as trustee and State Street
Bank and Trust Company, as trustee, respectively (each, a "Trustee"). Certain
of the terms
<PAGE> 2
United Companies Financial Corporation
September 27, 1994
Page 2
of each series of Debt Securities may be set forth in a supplemental indenture
to an Indenture (each, a "Supplemental Indenture") between the Company and a
Trustee.
Attorneys involved in the preparation of this opinion are admitted to practice
law in the State of New York and we do not purport to be experts on, or to
express any opinion herein concerning, any law other than the laws of the State
of New York and the laws of the United States of America.
We have examined copies of the articles of incorporation and by-laws of the
Company, forms of the Indentures and forms of the Debt Securities included
therein, as well as the Registration Statement and forms of the agreements and
other documents filed or to be filed as exhibits thereto. We also have
examined the original or reproduced or certified copies of all such records of
the Company, all such agreements, certificates of officers and representatives
of the Company and others, and such other documents, papers, statutes and
authorities as we deemed necessary to form the basis of the opinions
hereinafter expressed. In such examinations, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals and the conformity to original documents of copies of documents
supplied to us by the Company and others. As to certain matters of fact
relevant to the opinions hereinafter expressed, we have relied upon statements
and certificates of officers of the Company and others.
Based upon the foregoing, we are of the opinion that when the issuance,
execution and delivery of each series of Debt Securities has been authorized by
all necessary corporate action of the Company (subject to the terms thereof
being otherwise in compliance with applicable law at such time) and otherwise
in accordance with the provisions of the applicable Indenture and related
Supplemental Indenture, if any, and when such Debt Securities have been duly
executed, authenticated and delivered by the applicable Trustee and sold as
described in the Registration Statement, (a) such Debt Securities will
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto and we
express no opinion with respect to the application of equitable principles in
any proceeding, whether at law or in equity, and (b) the holders of such Debt
Securities will be entitled to the benefits provided by
<PAGE> 3
United Companies Financial Corporation
September 27, 1994
Page 3
the applicable Indenture and related Supplemental Indenture, if any.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, to the reference to us in the prospectus and each
related prospectus supplement forming a part of the Registration Statement, and
to the filing of this opinion as an exhibit to any application made by or on
behalf of the Company or any dealer in connection with the registration of the
Securities under the securities or blue sky laws of any state or jurisdiction.
In giving such permission, we do not admit hereby that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/STROOCK & STROOCK & LAVAN
STROOCK & STROOCK & LAVAN
<PAGE> 1
EXHIBIT 5.2
KANTROW, SPAHT, WEAVER & BLITZER
(A Professional Law Corporation)
Attorneys At Law
Suite 300 - City Plaza
445 North Boulevard
Post Office Box 2997
Baton Rouge, Louisiana 70821-2997
September 26, 1994
United Companies Financial Corporation
4041 Essen Lane
P.O. Box 1591
Baton Rouge, Louisiana 70821-1591
Re: United Companies Financial Corporation Registration
Statement on Form S-3 (No. 33-55227)
Ladies and Gentlemen:
We have acted as counsel to United Companies Financial Corporation, a
Lousiana Corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-3, SEC File No. 33-55227 (the "Registration
Statement") filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), covering up to $200,000,000
aggregate offering price of (i) the Company's unsecured debt securities, which
may be either senior or subordinated (the "Debt Securities"); and (ii) the
Company's $2.00 par value per share preferred stock (the "Preferred Stock")
(the Debt Securities and the Preferred Stock are collectively referred to
herein as the "Securities"). The Registration Statement also covers an
indeterminate number of shares of the Company's $2.00 par value per share
common stock, including associated rights to purchase the Company's Series A
Junior Participating Preferred Stock (together, the "Common Stock") as may be
issued upon conversion or exchange of the Debt Securities or the Preferred
Stock, as the case may be. The Securities may be sold (i) through underwriting
syndicates represented by managing underwriters, or by underwriters without a
syndicate; (ii) through agents designated from time to time; or (iii) directly
by the Company. When issued, the Debt Securities will be subject
to the provisions of either (i) an Indenture for Senior Debt Securities,
between the Company and The First National Bank of Chicago, as trustee, the
form of which is filed as an exhibit to the Registration Statement (the "Senior
Debt Indenture"), or (ii) the Indenture for Subordinated Debt Securities
between the Company and State Street Bank and Trust Company, as trustee, the
form of which is filed as an exhibit to the Registration Statement (the
"Subordinated Debt Indenture").
We have examined the originals, or copies certified or otherwise
identified to our satisfaction, of the Registration Statement, the Company's
Articles of Incorporation, as amended, its By-Laws, as amended, resolutions of
its Board of Directors, the form of the Subordinated Debt Indenture, and such
other documents and corporate records as we have deemed necessary as the basis
for the opinion expressed herein. Based upon the foregoing and in reliance
thereon, and after examination of such matters of law as we deem applicable or
relevant hereto, it is our opinion that:
<PAGE> 2
United Companies Financial Corporation
September 26, 1994
Page 2
(1) The Company is duly incorporated under the laws of the State
of Louisiana and is validly existing and in good standing
under the laws of that State;
(2) When (i) the Registration Statement has become effective under
the Act and under all state securities laws where registration
or qualification is required; (ii) the Underwriting Agreement
- Basic Provisions and the related Terms Agreement have been
duly authorized, executed and delivered by the Company; (iii)
the designation of one or more series of Preferred Stock and
the establishment of the relevant rights, preferences,
limitations and qualifications of such series has been duly
authorized by the Company; (iv) the issuance and sale of
shares of the Preferred Stock and the terms of the offering
have been duly authorized by the Company; (v) the issuance and
sale of shares of the Preferred Stock are in conformity with
the Registration Statement and the prospectus made a part
thereof, as supplemented from time to time, that may be filed
or in effect from time to time, the Louisiana Business
Corporation Law as then in effect (the "LBCL"), and the
Company's Articles of Incorporation, as amended, and do not
violate any applicable law, order, rule or regulation or any
document, agreement or instrument then binding on the Company;
and (vi) the form of certificates representing shares of the
Preferred Stock complies with the requirements of the LBCL,
the Preferred Stock, when issued against payment therefor,
will be validly issued, fully paid and non-assessable.
(3) If any of the Securities to be issued are convertible or
exchangeable into shares of Common Stock, when (i) the
Registration Statement has become effective under the Act and
under all state securities laws where registration or
qualification is required; (ii) the shares of Common Stock
have been authorized or reserved for issuance by the Company's
Board of Directors; (iii) the Debt Securities or Preferred
Stock have been exchanged or converted into shares of Common
Stock pursuant to due authorization of the Company's Board of
Directors; and (iv) the exchange or conversion of the Debt
Securities or Preferred Stock into shares of Common Stock
complies in all respects with the terms of the Debt Securities
or Preferred Stock, the Common Stock when issued upon exchange
or conversion of the Debt Securities or Preferred Stock, will
be validly issued, fully paid and non-assessable.
We are members of the Bar of the State of Louisiana and we do not
express any opinion herein concerning any law other than the law of the State
of Louisiana and the federal law of the United States.
We hereby expressly consent to the reference to our firm in the
prospectus and each related prospectus supplement forming a part of the
Registration Statement, to the inclusion of this opinion as an exhibit to the
Registration Statement and to the filing of this opinion with any appropriate
governmental agency.
Very truly yours,
KANTROW, SPAHT, WEAVER & BLITZER
(A PROFESSIONAL LAW CORPORATION)
/s/ KANTROW, SPAHT, WEAVER & BLITZER
(A PROFESSIONAL CORPORATION)
<PAGE> 1
EXHIBIT 12.1
UNITED COMPANIES FINANCIAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended June 30, -------------------------------------------------
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $43,582 $44,372 $21,370 $8,376 $7,267 $12,146
Add
Portion of rents representative of
the interest factor 712 1,085 745 735 775 651
Interest on indebtedness 5,699 10,158 12,082 17,679 19,938 20,700
Proportionate share of interest on
indebtedness of 50%-owned
investee 188 380 383 430 99 0
Less: intercompany interest (188) (380) (383) (430) (99) 0
---- ---- ---- ---- --- -
Income as adjusted $49,993 $55,615 $34,197 $26,790 $27,980 $33,497
======= ======= ======= ======= ======= =======
Fixed charges
Portion of rents representative of
the interest factor $712 $1,085 $745 $735 $775 $651
Interest on indebtedness 5,699 10,158 12,082 17,679 19,938 20,700
Proportionate share of interest on
indebtedness of 50%-owned
investee 188 380 383 430 99 0
Less: intercompany interest (188) (380) (383) (430) (99) 0
---- ---- ---- ---- --- -
Fixed charges $6,411 $11,243 $12,827 $18,414 $20,713 $21,351
====== ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 7.80 4.95 2.67 1.45 1.35 1.57
==== ==== ==== ==== ==== ====
</TABLE>
<PAGE> 1
EXHIBIT 12.2
UNITED COMPANIES FINANCIAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended June 30, -------------------------------------------------
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $43,582 $44,372 $21,370 $8,376 $7,267 $12,146
Add
Portion of rents representative of
the interest factor 712 1,085 745 735 775 651
Interest on indebtedness 5,699 10,158 12,082 17,679 19,938 20,700
Proportionate share of interest on
indebtedness of 50%-owned
investee 188 380 383 430 99 0
Less: intercompany interest (188) (380) (383) (430) (99) 0
---- ---- ---- ---- --- -
Income as adjusted $49,993 $55,615 $34,197 $26,790 $27,980 $33,497
======= ======= ======= ======= ======= =======
Fixed charges
Preferred stock dividends $333
Ratio of income from continuing
operations before income taxes
to income from continuing
operations 152%
----
Preferred stock dividends on a
pretax basis 506
Portion of rents representative of
the interest factor $712 1,085 $745 $735 $775 $651
Interest on indebtedness 5,699 10,158 12,082 17,679 19,938 20,700
Proportionate share of interest on
indebtedness of 50%-owned
investee 188 380 383 430 99 0
Less: intercompany interest (188) (380) (383) (430) (99) 0
---- ---- ---- ---- --- -
Fixed charges $6,411 $11,749 $12,827 $18,414 $20,713 $21,351
====== ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 7.80 4.73 2.67 1.45 1.35 1.57
==== ==== ==== ==== ==== ====
</TABLE>
<PAGE> 1
EXHIBIT 15.1
September 28, 1994
United Companies Financial Corporation
4041 Essen Lane
Baton Rouge, Louisiana
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim
consolidated financial information of United Companies Financial Corporation
and subsidiaries for the periods ended March 31, 1994 and 1993 and June 30,
1994 and 1993, as indicated in the reports of Deloitte & Touche dated
April 28, 1994 and July 27, 1994, respectively; because we did not perform an
audit, we expressed no opinion on that information.
We are aware that the reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994 and June
30, 1994, are being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Baton Rouge, Louisiana
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 33-55227 of United Companies Financial Corporation
on Form S-3 of the report of Deloitte & Touche dated February 18, 1994,
appearing in and incorporated by reference in the Annual Report on Form 10-K
of United Companies Financial Corporation for the year ended December 31, 1993,
and to the reference to Deloitte & Touche LLP under the headings "Selected
Financial and Other Data" and "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ Deloitte & Touche LLP
Baton Rouge, Louisiana
September 28, 1994
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) _____
_________________________________
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
___________________________________
UNITED COMPANIES FINANCIAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
LOUISIANA 71-0430414
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70809
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
SENIOR DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 13th day of September, 1994.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
BY /S/ JOHN R. PRENDIVILLE
JOHN R. PRENDIVILLE
VICE PRESIDENT
*Exhibits 1, 2, 3, and 4 are herein incorporated by reference to
Exhibits bearing identical numbers in Item 12 of the Form T-1 of The
First National Bank of Chicago, filed as Exhibit 26(b) to the
Registration Statement on Form S-3 of Dow Capital B.V. and The Dow
Chemical Company, filed with the Securities and Exchange Commission on
June 3, 1991 (Registration No. 33-36314).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
September 13, 1994
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between United Companies
Financial Corporation and The First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /S/ JOHN R. PRENDIVILLE
JOHN R. PRENDIVILLE
VICE PRESIDENT
4
<PAGE> 5
EXHIBIT 7
A copy of the latest report of conditions of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 6/30/94 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 (-
DOLLAR AMOUNTS IN ------------ -------
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . . 0081 2,999,432 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . 0071 7,408,337 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) . . . 1754 114,178 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D). . 1773 354,495 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . . . . . . . . 0276 3,997,507 3.a.
b. Securities purchased under agreements to resell . . . . . . . . 0277 756,008 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2122 14,441,302 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . RCFD 3123 336,826 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . . RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . 2125 14,104,476 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . 3545 9,635,521 5.
6. Premises and fixed assets (including capitalized leases) . . . . . 2145 489,446 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . . 2150 59,331 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . . 2130 6,886 8.
9. Customers' liability to this bank on acceptances outstanding . . . 2155 445,848 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . 2143 131,253 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . 2160 1,283,273 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . 2170 41,785,991 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
6
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 6/30/94 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) . . . . . . . . . . . . . . . RCON 2200 14,100,202 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . RCON 6631 5,795,942 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCON 6636 8,304,260 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) . . . . . . . . . . . RCFN 2200 9,752,314 13.b.
(1) Noninterest bearing . . . . . . . . . . . . . . . . . RCFN 6631 459,474 13.b.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . RCFN 6636 9,292,840 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . RCFD 0278 2,766,451 14.a.
b. Securities sold under agreements to repurchase . . . . . RCFD 0279 355,648 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . RCON 2840 101,744 15.a.
b. Trading Liabilities . . . . . . . . . . . . . . . . . . . RCFD 3548 6,864,567 15.b.
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . RCFD 2332 1,955,477 16.a.
b. With original maturity of more than one year . . . . . . RCFD 2333 488,023 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2910 273,578 17.
18. Bank's liability on acceptance executed and outstanding . . RCFD 2920 445,848 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . RCFD 3200 1,175,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . RCFD 2930 765,341 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . RCFD 2948 39,044,193 21.
22. Limited-Life preferred stock and related surplus . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) . . RCFD 3839 2,254,940 25.
26. a. Undivided profits and capital reserves. . . . . . . . . . RCFD 3632 287,009 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . RCFD 8434 (38) 26.b.
27. Cumulative foreign currency translation adjustments . . . . RCFD 3284 (971) 27.
28. Total equity capital (sum of items 23 through 27) . . . . . RCFD 3210 2,741,798 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) . . . . . . . . . . . RCFD 3300 41,785,991 29.
</TABLE>
<TABLE>
<S> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed Number
for the bank by independent external auditors as of any date during 1993 . . . . . . . . . RCFD 6724 N/A M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
___________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
<PAGE> 1
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)____
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip code)
Robert J. Malley, Esq. General Counsel and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3104
(Name, address and telephone number of agent for service)
____________________
UNITED COMPANIES FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)
Louisiana 71-0430414
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4041 Essen Lane
Baton Rouge, Louisiana 70809
(Address of principal executive offices) (Zip code)
______________________
Debt Securities
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See Note on page 6.)
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES OF
THE TRUSTEE:
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B
Title of Class Amount outstanding
<S> <C>
Not applicable.
</TABLE>
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(A) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER INDENTURE.
Not applicable.
(B) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR THE CLAIM
THAT NO CONFLICTING INTEREST WITHIN THE MEANING OF SECTION 310(B)(1) OF THE ACT
ARISES AS A RESULT OF THE TRUSTEESHIP UNDER ANY SUCH OTHER INDENTURE, INCLUDING
A STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL RANK AS COMPARED WITH THE
SECURITIES ISSUED UNDER SUCH OTHER INDENTURE.
Not applicable.
1
<PAGE> 3
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE
OBLIGOR OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE
TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE OR REPRESENTATIVE
OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON
HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.
Not applicable.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR:
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B Col. C Col. D
Name of Title of Amount owned Percentage of
owner class beneficially voting securities
represented by
amount given in
Col. C
<S> <C> <C> <C>
Not applicable.
</TABLE>
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER:
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B Col. C Col. D
Name of Title of Amount owned Percentage of
owner class beneficially voting securities
represented by
amount given in
Col. C
<S> <C> <C> <C>
Not applicable.
</TABLE>
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED
BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE
TRUSTEE:
2
<PAGE> 4
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B Col. C Col. D
Title of Whether Amount owned Percent of
class the securities beneficially class repre-
are voting or or held as sented by
non-voting collateral security amount given
securities for obligations in Col. C
in default
<S> <C> <C> <C>
Not applicable.
</TABLE>
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE:
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B Col. C Col. D
Title of Amount Amount owned Percent of
issuer outstanding beneficially class represented
and title or held as by amount
of class collateral security given in Col. C
for obligations in
default by trustee
<S> <C> <C> <C>
Not applicable.
</TABLE>
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF
CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR
OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON:
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B Col. C Col. D
Title of Amount Amount owned Percent of
issuer outstanding beneficially class represented
and title or held as by amount
of class collateral security given in Col. C
for obligations in
default by trustee
<S> <C> <C> <C>
Not applicable.
</TABLE>
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A
PERSON OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON
ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE:
3
<PAGE> 5
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B Col. C Col. D
Title of Amount Amount owned Percent of
issuer outstanding beneficially class represented
and title or held as by amount
of class collateral security given in Col. C
for obligations in
default by trustee
<S> <C> <C> <C>
Not applicable.
</TABLE>
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
<TABLE>
<CAPTION>
As of: September 14, 1994
Col. A Col. B Col. C
Nature of Amount Date due
indebtedness outstanding
<S> <C> <C>
Not applicable.
</TABLE>
ITEM 13. DEFAULTS BY THE OBLIGOR.
(A) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
Not applicable.
(B) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS A TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
Not applicable.
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF AN UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
Not applicable.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
4
<PAGE> 6
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED IN
PARAGRAPH (1) OR (2) ABOVE.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the By-Laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with Registration Statement of Eastern Edison Company
(File No. 33-37823) and is incorporated herein by reference
thereto.
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4, IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF THE UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
5
<PAGE> 7
8. A COPY OF ANY ORDER PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
9. FOREIGN TRUSTEES ARE REQUIRED TO FURNISH A CONSENT TO SERVICE OF
PROCESS.
Not applicable.
NOTE
The answers to this statement insofar as such answers relate to persons
who are affiliates of the obligors are based upon information furnished to the
trustee by the obligors. While the trustee has no reason to doubt the accuracy
of any such information, it cannot accept any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, State Street Bank and Trust Company, a corporation organized and
existing under the laws of The Commonwealth of Massachusetts, has duly caused
this statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Boston and The Commonwealth of
Massachusetts, on the 14th day of September, 1994.
STATE STREET BANK AND TRUST COMPANY
By /s/ Daniel Golden
Daniel Golden
Assistant Vice President
6
<PAGE> 8
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, in connection with the proposed issuance by United Companies Financial
Corporation of its Debt Securities, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By /s/ Daniel Golden
Daniel Golden
Assistant Vice President
Dated: September 14, 1994
7
<PAGE> 9
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business June 30,
1994, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
THOUSANDS OF
DOLLARS
-------
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . . . . . . . 1,292,600
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . 4,578,538
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,174,248
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its Edge
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,707,724
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . 3,272,673
Allowance for loan and lease losses . . . . . . . . . . . 55,947
Loans and leases, net of unearned income and
allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,216,726
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 1,405,667
Premises and fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365,374
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,792
Investments in unconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . 24,162
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . 19,514
Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,101
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 818,404
-------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,643,850
==========
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . 7,120,327
Noninterest-bearing . . . . . . . . . . . . 5,249,104
Interest-bearing . . . . . . . . . . . . . . 1,871,223
In foreign offices and Edge subsidiary . . . . . . . . . . . . . . . . 7,724,911
Noninterest-bearing . . . . . . . . . . . . . 105,501
Interest-bearing . . . . . . . . . . . . . . 7,619,410
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 3,782,418
Demand notes issued to the U.S. Treasury and Trading Liabilities . . . . . . . . . . 962,719
Other borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373,914
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . 20,513
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494,709
-------
Total liabilities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,479,511
==========
EQUITY CAPITAL
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,043
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,219
Undivided profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959,077
-------
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,164,339
---------
Total liabilities and equity capital . . . . . . . . . . . . . . . . . . . . . . . 21,643,850
==========
</TABLE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Nader F. Darehshori
8
