<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED:
June 30, 1998
-OR-
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 1-5050
ALBERTO-CULVER COMPANY
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-2257936
- ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2525 Armitage Avenue
Melrose Park, Illinois 60160
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (708) 450-3000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
----- -----
At June 30, 1998, there were 21,969,804 shares of Class A common stock
outstanding and 33,147,471 shares of Class B common stock outstanding.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Statements of Earnings
Three Months Ended June 30, 1998 and 1997
(dollar amounts in thousands, except per share figures)
<TABLE>
<CAPTION>
(Unaudited)
-----------
1998 1997
-------- -------
<S> <C> <C>
Net sales $467,480 456,210
Costs and expenses:
Cost of products sold 227,104 226,734
Advertising, promotion, selling and administrative 204,475 196,797
Interest expense, net of interest income
of $921 in 1998 and $858 in 1997 2,189 2,066
-------- -------
Total costs and expenses 433,768 425,597
-------- -------
Earnings before provision for income taxes 33,712 30,613
Provision for income taxes 12,557 11,403
-------- -------
Net earnings $ 21,155 19,210
======== =======
Net earnings per share (Notes 2 and 3)
Basic $ .38 .34
======== =======
Diluted $ .35 .32
======== =======
Cash dividends paid per share (Note 2) $ .06 .05
======== =======
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Statements of Earnings
Nine Months Ended June 30, 1998 and 1997
(dollar amounts in thousands, except per share figures)
<TABLE>
<CAPTION>
(Unaudited)
------------------------
1998 1997
---- ----
<S> <C> <C>
Net sales $1,368,075 1,321,892
Costs and expenses:
Cost of products sold 670,914 660,179
Advertising, promotion, selling and administrative 594,426 569,502
Interest expense, net of interest income of $2,303
in 1998 and $2,502 in 1997 6,433 6,525
---------- ---------
Total costs and expenses 1,271,773 1,236,206
---------- ---------
Earnings before non-recurring gain and provision
for income taxes 96,302 85,686
Non-recurring gain (Note 5) -- 15,634
---------- ---------
Earnings before provision for income taxes 96,302 101,320
Provision for income taxes (Note 5) 35,872 37,741
---------- ---------
Net earnings (Note 5) $ 60,430 63,579
=========== =========
Net earnings per share of common stock
(Notes 2, 3 and 5)
Basic $ 1.07 1.14
=========== =========
Diluted $ .99 1.05
=========== =========
Cash dividends paid per share (Note 2) $ .17 .145
=========== =========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1998 and September 30, 1997
(dollar amounts in thousands, except per share figures)
<TABLE>
<CAPTION>
(Unaudited)
June 30, September 30,
ASSETS 1998 1997
- ------ ----------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 152,265 76,040
Short-term investments 909 11,560
Receivables, less allowance for doubtful
accounts ($9,682 at 6/30/98 and $9,042 at 9/30/97) 122,209 120,774
Inventories (Note 4) 354,907 343,868
Other current assets 26,438 28,017
---------- ----------
Total current assets 656,728 580,259
---------- ----------
Property, plant and equipment at cost, less accumulated
depreciation ($178,700 at 6/30/98 and $159,155 at 9/30/97) 205,684 190,998
Goodwill, net 123,565 114,245
Trade names and other intangible assets, net 67,196 70,155
Other assets 54,988 44,402
---------- ----------
Total assets $1,108,161 $1,000,059
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Current maturities of long-term debt and short-term borrowings $ 6,869 4,943
Accounts payable 156,225 174,322
Accrued expenses 109,029 118,447
Income taxes 23,587 13,540
---------- ----------
Total current liabilities 295,710 311,252
---------- ----------
Long-term debt (Note 7) 165,495 49,441
Convertible subordinated debentures (Note 8) 100,000 100,000
Deferred income taxes 28,270 25,490
Other liabilities 17,839 16,872
Stockholders' equity (Note 2):
Common stock, par value $.22 per share (Note 8):
Class A authorized 75,000,000 shares; issued 24,442,940
at 6/30/98 and 24,442,931 shares at 9/30/97 5,378 5,378
Class B authorized 75,000,000 shares; issued 37,710,655
at 6/30/98 and 37,710,664 shares at 9/30/97 8,296 8,296
Additional paid-in capital (Note 8) 96,505 91,222
Retained earnings 509,750 458,886
Foreign currency translation (31,519) (22,555)
---------- ----------
588,410 541,227
Less treasury stock at cost (Class A common shares: 2,473,136
at 6/30/98 and 1,833,315 at 9/30/97; Class B common
shares: 4,563,184 at 6/30/98 and 4,178,184 at
9/30/97) (Note 6) (87,563) (44,223)
---------- ----------
Total stockholders' equity 500,847 497,004
---------- ----------
Total liabilities and stockholders' equity $1,108,161 $1,000,059
========== ==========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine months Ended June 30, 1998 and 1997
(dollar amounts in thousands)
<TABLE>
<CAPTION>
(Unaudited)
-----------------------------
1998 1997
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
- ------------------------------------
Net earnings $ 60,430 65,579
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 29,398 27,005
Non-recurring gain -- (15,634)
Other, net (1,437) (802)
Cash effects of changes in:
Receivables, net (571)
Inventories (5,777) (36,529)
Other current assets 191 (978)
Accounts payable and accrued expenses (27,266) 2,193
Income taxes 13,556 8,278
-------- -------
Net cash provided by operating activities 68,524 46,125
-------- -------
Cash Flows from Investing Activities:
- ------------------------------------
Short-term investments 10,651 (3,404)
Capital expenditures (37,007) (43,615)
Payments for purchased businesses, net of acquired
companies' cash (18,671) (14,187)
Proceeds from insurance settlement -- 28,000
Other, net (2,556) (5,162)
-------- -------
Net cash used by investing activities (47,583) (38,368)
-------- -------
Cash Flows from Financing Activities:
- ------------------------------------
Short-term borrowings (721) 1,734
Proceeds from long-term debt 120,000 500
Repayments of long-term debt (3,850) (1,225)
Debt issuance costs (2,385) --
Cash dividends paid (9,566) (8,101)
Cash proceeds from exercise of stock options 10,844 5,175
Stock purchased for treasury (58,294) (1,138)
-------- -------
Net cash provided (used) by financing activities 56,028 (3,055)
-------- -------
Effect of foreign exchange rate changes on cash (744) (936)
-------- -------
Net increase in cash and cash equivalents 76,225 3,766
Cash and cash equivalents at beginning of period 76,040 66,211
-------- -------
Cash and cash equivalents at end of period $152,265 69,977
======== =======
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) The consolidated financial statements contained in this report have not
been examined by independent public accountants, except for balance sheet
information presented at September 30, 1997. However, in the opinion of the
company, the consolidated financial statements reflect all adjustments,
which include only normal adjustments, necessary to present fairly the data
contained therein. The results of operations for the periods covered are
not necessarily indicative of results for a full year.
(2) On January 23, 1997, the company announced a 100% stock dividend on its
Class A and Class B outstanding shares. The new shares were distributed
February 20, 1997 to shareholders of record at the close of business on
February 3, 1997. The stock dividend was distributed only on outstanding
shares and not on shares held in the treasury. All share and per share
information in this report, except for treasury shares, has been restated
to reflect the 100% stock dividend.
(3) The company has adopted Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share" which requires the dual presentation
of basic and diluted earnings per share, replacing the primary and fully-
diluted disclosures previously required. As a result, all prior period
earnings per share amounts have been restated to conform to the current
year's presentation.
Basic earnings per share are calculated using the weighted average shares
outstanding of 55,741,000 and 56,078,000 for the three months ended June
30, 1998 and 1997, respectively, and 56,346,000 and 55,913,000 for the nine
months ended June 30, 1998 and 1997, respectively, after giving effect to
the 100% stock dividend described in Note 2.
Diluted earnings per share are determined by dividing net earnings before
interest expense (net of tax benefit) on the convertible subordinated
debentures by the weighted average shares outstanding, including common
stock equivalents, after giving effect to common shares to be issued
assuming conversion of the convertible subordinated debentures to Class A
common stock. Diluted weighted average shares outstanding were 63,034,000
and 63,632,000 for the three months ended June 30, 1998 and 1997,
respectively, and 63,590,000 and 63,322,000 for the nine months ended June
30, 1998 and 1997, respectively, after giving effect to the 100% stock
dividend described in Note 2.
(4) Inventories consist of the following:
<TABLE>
<CAPTION>
(in thousands)
-----------------------
June 30, September 30,
1998 1997
-------- -------------
<S> <C> <C>
Finished goods $307,864 292,441
Work-in-process 7,598 7,252
Raw materials 39,445 44,175
-------- -------
$354,907 343,868
======== =======
</TABLE>
(Continued)
6
<PAGE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(5) In the first quarter of fiscal year 1997, the company received a $28.0
million insurance settlement from the loss of its corporate airplane. The
effect on the company's earnings in fiscal 1997 was a non-recurring pre-tax
gain of $15.6 million and an increase in net earnings of $9.8 million.
Accordingly, basic earnings per share increased $0.18 and on a diluted
basis rose $0.16.
The following table provides pro-forma information for the first nine
months of the fiscal year excluding the non-recurring gain (in thousands,
except per share data):
<TABLE>
<CAPTION>
1998 1997
------- ------
<S> <C> <C>
Pre-tax earnings $96,302 85,686
======= ======
Net earnings $60,430 53,768
======= ======
Net earnings per share:
Basic $ 1.07 0.96
======= ======
Diluted $ 0.99 0.89
======= ======
</TABLE>
(6) On January 22, 1998, the Board of Directors authorized the purchase of up
to 3.0 million shares of the Company's Class A common stock within the next
24 months. As of June 30, 1998, the company had purchased 1,459,200 Class A
shares under the stock buyback program. In addition, the Company purchased
385,000 shares of Class B common stock in April, 1998.
(7) On June 15, 1998, the company issued $120 million of 6.375% debentures due
June 15, 2028. The debentures were priced at 99.359% of par for an
effective yield of 6.463%. The debentures are subject to repayment, in
whole or in part, on June 15, 2008, at the option of the holders. In
addition, the company has the option to redeem the debentures at any time,
in whole or in part, at a price equal to 100% of the principal amount plus
accrued interest and, if applicable, a make-whole premium.
(8) On July 15, 1998, the Company's $100 million of convertible subordinated
debentures due June 30, 2005 were converted into 6,169,878 shares of Class
A common stock and $125,000 of the outstanding debentures were redeemed for
cash. As a result of this transaction, the Company's long-term debt
decreased by $100 million and stockholders' equity increased by $97.8
million after deducting $2.1 million of deferred financing costs.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
THIRD QUARTER AND NINE MONTHS ENDED JUNE 30, 1998 COMPARED TO QUARTER AND NINE
MONTHS ENDED JUNE 30, 1997
The company achieved record net sales of $467.5 million in the third quarter of
fiscal year 1998, up $11.3 million or 2.5% over the comparable quarter of fiscal
year 1997. For the nine-month period ending June 30, 1998, net sales reached a
new high of $1.37 billion, representing a 3.5% increase compared to last year's
nine-month period.
Net earnings for the three months ended June 30, 1998 were a record for the
third quarter at $21.2 million or 10.1% higher than the same period of the prior
year. Basic earnings per share of 38 cents were 4 cents or 11.8% higher than
the same period last year. Diluted earnings per share were 35 cents, up 3 cents
or 9.4% from the prior year.
As described in Note 5, during the first quarter of fiscal year 1997, the
company received a $28.0 million insurance settlement from the loss of its
corporate airplane. As a result, the company recognized a non-recurring pre-tax
gain of $15.6 million and an increase to net earnings of $9.8 million.
Accordingly, last year's basic earnings per share for the first nine months
increased 18 cents and diluted earnings per share increased 16 cents as a result
of the non-recurring gain.
On a pro-forma basis for the nine months ended June 30, 1998, net earnings
before the non-recurring gain were a record at $60.4 million or 12.4% higher
than the same period of the prior year. Pro-forma basic earnings per share were
$1.07, representing an 11 cent or 11.5% increase over last year. Pro-forma
diluted earnings per share increased 10 cents or 11.2% to 99 cents.
The following table presents net sales information by business segment for the
third quarter and first nine months of fiscal years 1998 and 1997 (dollars in
millions):
<TABLE>
<CAPTION>
THIRD QUARTER
Fiscal Year
--------------- Dollar Percent
Net sales: 1998 1997 Change Change
- ---------- ---- ---- ------ ------
<S> <C> <C> <C> <C>
Consumer Products:
Alberto-Culver USA $ 100.1 107.6 (7.5) (7.0)%
Alberto-Culver International 120.9 123.9 (3.0) (2.4)
-------- ------- -----
Total Consumer Products 221.0 231.5 (10.5) (4.5)
Specialty Distribution - Sally 250.5 229.1 21.4 9.3
Eliminations (4.0) (4.4) 0.4 8.1
-------- ------- -----
$ 467.5 456.2 11.3 2.5%
======== ======= =====
NINE MONTHS
Fiscal Year
--------------- Dollar Percent
Net sales: 1998 1997 Change Change
- ---------- ---- ---- ------ ------
<S> <C> <C> <C> <C>
Consumer Products:
Alberto-Culver USA $ 311.8 332.4 (20.6) (6.2)%
Alberto-Culver International 345.3 347.0 (1.7) (0.5)
-------- ------- -----
Total Consumer Products 657.1 679.4 (22.3) (3.3)
Specialty Distribution - Sally 722.8 653.4 69.4 10.6
Eliminations (11.8) (10.9) (0.9) (9.2)
-------- ------- -----
$1,368.1 1,321.9 46.2 3.5%
======== ======= =====
</TABLE>
Compared to the same periods of the prior year, sales of Alberto-Culver USA
consumer products decreased 7.0% and 6.2% for the current quarter and first nine
months of fiscal 1998, respectively. The third quarter decrease was primarily
due to lower sales for custom label filling operations and St. Ives Swiss
Formula facial products. In addition, the nine-month period was also affected
by lower sales of Alberto VO5 hair care products.
8
<PAGE>
Sales of Alberto-Culver International consumer products decreased 2.4% in the
third quarter and 0.5% in the first nine months compared to last year. The
fiscal 1998 results were negatively impacted by the effect of foreign exchange
rates. Had foreign exchange rates this year been the same as the third quarter
and first nine months of fiscal 1997, Alberto-Culver International sales would
have increased 1.7% in the third quarter and 5.8% for the first nine months
primarily due to sales increases in Latin America and Europe.
The "Specialty distribution-Sally" business segment experienced sales increases
in fiscal 1998 of $21.4 million or 9.3% for the third quarter and $69.4 million
or 10.6% for the first nine months. The gains were attributable to higher sales
for established Sally Beauty Company outlets, the addition of new stores during
the year and the expansion of Sally's full service and foreign operations. At
June 30, 1998, Sally Beauty Company had 1,960 stores offering a full range of
professional beauty supplies.
Cost of products sold as a percent of net sales was 48.6% for the third quarter
of 1998 compared to 49.7% in 1997. Cost of products sold as a percent of net
sales for the first nine months decreased to 49.0% compared to 49.9% in the
prior year. The decreases were primarily due to cost savings and a change in
product mix favoring higher margin products.
Compared to the prior year, advertising, promotion, selling and administrative
expenses rose 3.9% or $7.7 million for the third quarter and 4.4% or $24.9
million for the nine months ended June 30, 1998. The third quarter increase
resulted from higher selling and administrative costs associated with the
increase in the number of Sally Beauty Company stores and increased advertising,
promotion and market research expenses. In addition, year to date expenses were
higher due to a charge to provide for the closing of a Cederroth manufacturing
facility in Holland.
Advertising, promotion and market research expenditures totaled $74.7 million in
the third quarter of 1998, an increase of 7.4% versus the prior year.
Advertising, promotion and market research expenditures for the first nine
months of fiscal year 1998 were $200.0 million, an increase of 5.9% over last
year. The increases were primarily due to higher expenditures for Alberto-
Culver USA and Alberto-Culver International, principally in Latin America,
Europe and Canada.
Interest expense increased $186,000 or 6.4% for the third quarter and decreased
$291,000 or 3.2% for the first nine months versus the comparable periods of last
year. The third quarter increase was primarily due to interest expense related
to the $120 million of 6.375% debentures issued on June 15, 1998. The nine-month
decrease was primarily attributable to a reduction in outstanding revolving debt
and the effect of foreign exchange rates.
Interest income increased $63,000 or 7.3% in the third quarter and decreased
$199,000 or 8.0% in the first nine months versus the same periods of fiscal
1997. The increase for the quarter is primarily the result of investing the
net proceeds from the debentures issued in June, 1998. The decrease for the
first nine months resulted principally from lower investment balances in fiscal
1998.
The provision for income taxes as a percentage of earnings before income taxes
was 37.25% for the third quarter and first nine months of fiscal years 1998 and
1997.
FINANCIAL CONDITION
JUNE 30, 1998 COMPARED TO SEPTEMBER 30, 1997
Working capital of $361.0 million increased $92.0 million since September 30,
1997. The ratio of current assets to current liabilities was 2.22 to 1.00 at
June 30, 1998 compared to 1.86 to 1.00 at September 30, 1997. Working capital
increased primarily due to the net proceeds from issuing $120 million of
debentures and net earnings from operations, offset in part by funds used for
investing and financing activities as shown in the Company's Consolidated
Statement of Cash Flows.
Total borrowings increased $118.0 million during the first nine months of fiscal
year 1998 primarily due to the issuance of $120 million of 6.375% debentures on
June 15, 1998 (see Note 7). At June 30, 1998, the company had $200 million
available under its domestic revolving credit facility.
9
<PAGE>
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q and the documents incorporated by reference
herein, if any, may contain forward-looking statements within the meaning or
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Security Exchange Act of 1934, as amended. Such statements are based on
management's current expectations and assessments of risks and uncertainties and
reflect various assumptions concerning anticipated results, which may or may not
prove to be correct. Some of the factors that could cause actual results to
differ materially from estimates or projections contained in such forward-
looking statements include the pattern of brand sales, including variations in
sales volume within periods; competition within the relevant product markets,
including pricing, promotional activities, continuing customer acceptance of
existing products and the ability to develop and successfully introduce new
products; risks inherent in acquisitions and strategic alliances; changes in
costs including changes in labor costs, raw material prices or promotional
expenses; the costs and effects of unanticipated legal or administrative
proceedings; variations in political, economic or other factors such as
currency exchange rates, inflation rates, recessionary or expansive trends, tax
changes, legal and regulatory changes or other external factors over which the
company has no control. The company disclaims any obligation to update any
forward-looking statement in this Quarterly Report on Form 10-Q or any document
incorporated herein by reference.
10
<PAGE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ----------------------------------------
(a) Exhibits:
4(a) Indenture dated June 10, 1998 between Alberto-Culver Company and The
First National Bank of Chicago, as Trustee.
4(b) Specimen of 6.375% Debentures due June 15, 2028.
27 Financial Data Schedule
27a Amended Financial Data Schedule
(b) Reports on Form 8-K:
No report on Form 8-K was filed by the registrant during the quarter ended
June 30, 1998.
11
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALBERTO-CULVER COMPANY
(Registrant)
By:/s/ William J. Cernugel
---------------------------------
William J. Cernugel
Senior Vice President, Finance
(Principal Financial Officer)
August 7, 1998
12
<PAGE>
EXHIBIT 4(a)
======================
ALBERTO-CULVER COMPANY
AND
THE FIRST NATIONAL BANK OF CHICAGO, Trustee
-------------
INDENTURE
Dated as of June 10, 1998
Debt Securities
======================
<PAGE>
Alberto-Culver Company
Certain Sections of this Indenture relating to
Sections 3.10 through 3.18, inclusive, of the
Trust Indenture Act of 1939, as amended:
<TABLE>
<CAPTION>
Provision of Trust
Indenture Act of 1939,
as amended Indenture Section
<S> <C>
(S) 310(a)(1) .................................................................... 6.9
(a)(2) .................................................................... 6.9
(a)(3) .................................................................... Not Applicable
(a)(4) .................................................................... Not Applicable
(b) .................................................................... 6.8, 6.10
(c) .................................................................... Not Applicable
(S) 311(a) .................................................................... 6.13
(b) .................................................................... 6.13
(c) .................................................................... Not Applicable
(S) 312(a) .................................................................... 7.1, 7.2(a)
(b) .................................................................... 7.2(b)
(c) .................................................................... 7.2(c)
(S) 313(a) .................................................................... 7.3(a)
(b) .................................................................... 7.3(a)
(c) .................................................................... 7.3(a)
(d) .................................................................... 7.3(b)
(S) 314(a) .................................................................... 7.4
(a)(4) .................................................................... 1.1, 10.4
(b) .................................................................... Not Applicable
(c)(1) .................................................................... 1.2
(c)(2) .................................................................... 1.2
(c)(3) .................................................................... Not Applicable
(d) .................................................................... Not Applicable
(e) .................................................................... 1.2
(f) .................................................................... 1.2
(S) 315(a) .................................................................... 6.1
(b) .................................................................... 6.2
(c) .................................................................... 6.1
(d) .................................................................... 6.1
(e) .................................................................... 5.14
(S) 316(a) .................................................................... 1.1
(a)(1)(A) .................................................................... 5.2, 5.12
(a)(1)(B) .................................................................... 5.13
(a)(2) .................................................................... Not Applicable
(b) .................................................................... 5.8
(c) .................................................................... 1.4(c)
(S) 317(a)(1) .................................................................... 5.3
(a)(2) .................................................................... 5.4
(b) .................................................................... 10.3
(S) 318(a) .................................................................... 1.7
- ----------------------
</TABLE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS OF THE COMPANY..................................................... 1
ARTICLE I Definitions and Other Provisions of General Application........... 1
Section 1.1 Definitions.............................................. 1
Act............................................................... 2
Affiliate......................................................... 2
Attributable Debt................................................. 2
Authenticating Agent.............................................. 3
Board of Directors................................................ 3
Board Resolution.................................................. 3
Book-Entry Security............................................... 3
Business Day...................................................... 3
Capital Lease Obligations......................................... 3
"capital stock" or "stock"........................................ 3
Commission........................................................ 3
Company........................................................... 4
Company Request" or "Company Order"............................... 4
Consolidated Net Tangible Assets.................................. 4
Corporate Trust Office............................................ 4
corporation....................................................... 4
covenant defeasance............................................... 4
CUSIP............................................................. 4
default........................................................... 4
Defaulted Interest................................................ 4
defeasance........................................................ 4
Depository........................................................ 4
Event of Default.................................................. 5
Funded Debt....................................................... 5
Holder............................................................ 5
Indebtedness...................................................... 5
Indenture......................................................... 5
</TABLE>
- -----------------
ii
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
interest.......................................................... 5
Interest Payment Date............................................. 5
Liens............................................................. 6
mandatory sinking fund payment.................................... 6
Maturity.......................................................... 6
Notice of Default................................................. 6
Officers' Certificate............................................. 6
Opinion of Counsel................................................ 6
optional sinking fund payment..................................... 6
Original Issue Discount Security.................................. 6
Outstanding....................................................... 6
Paying Agent...................................................... 7
Person............................................................ 7
Place of Payment.................................................. 7
Predecessor Security.............................................. 7
Principal Property................................................ 8
Redemption Date................................................... 8
Redemption Price.................................................. 8
Regular Record Date............................................... 8
Restricted Subsidiary............................................. 8
sale and leaseback transaction.................................... 8
Secured Funded Debt............................................... 8
Securities........................................................ 8
"Security Register" and "Security Registrar"...................... 8
Special Record Date............................................... 8
Stated Maturity................................................... 8
Subsidiary........................................................ 9
Trust Indenture Act............................................... 9
Trustee........................................................... 9
U.S. Government Obligations....................................... 9
Vice President.................................................... 9
Yield to Maturity................................................. 9
Section 1.2 Compliance Certificates and Opinions..................... 9
Section 1.3 Form of Documents Delivered to Trustee................... 10
Section 1.4 Acts of Holders; Record Dates............................ 11
Section 1.5 Notices, Etc. to Trustee and Company..................... 12
</TABLE>
- --------------
iii
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 1.6 Notice to Holders; Waiver................................ 12
Section 1.7 Conflict with Trust Indenture Act........................ 13
Section 1.8 Effect of Headings and Table of Contents................. 13
Section 1.9 Successors and Assigns................................... 13
Section 1.10 Separability Clause...................................... 13
Section 1.11 Benefits of Indenture.................................... 13
Section 1.12 Governing Law............................................ 13
Section 1.13 Legal Holidays........................................... 13
ARTICLE II Security Forms................................................... 14
Section 2.1 Forms Generally.......................................... 14
Section 2.2 Form of Face of Security................................. 14
Section 2.3 Form of Reverse of Security.............................. 16
Section 2.4 Additional Provisions Required in Book-Entry Security.... 21
Section 2.5 Form of Trustee's Certificate of Authentication.......... 21
ARTICLE III The Securities.................................................. 21
Section 3.1 Amount Unlimited; Issuable in Series..................... 21
Section 3.2 Denominations............................................ 24
Section 3.3 Execution, Authentication, Delivery and Dating........... 24
Section 3.4 Temporary Securities..................................... 26
Section 3.5 Registration, Registration of Transfer and Exchange...... 26
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities......... 28
Section 3.7 Payment of Interest; Interest Rights Preserved........... 29
Section 3.8 Persons Deemed Owners.................................... 30
Section 3.9 Cancellation............................................. 30
Section 3.10 Computation of Interest.................................. 31
Section 3.11 CUSIP Numbers............................................ 31
ARTICLE IV Satisfaction and Discharge....................................... 31
Section 4.1 Satisfaction and Discharge of Indenture.................. 31
Section 4.2 Application of Trust Money............................... 32
ARTICLE V Remedies.......................................................... 33
Section 5.1 Events of Default........................................ 33
Section 5.2 Acceleration of Maturity; Rescission and Annulment....... 34
</TABLE>
- -----------
iv
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee............................................. 35
Section 5.4 Trustee May File Proofs of Claim......................... 36
Section 5.5 Trustee May Enforce Claims Without Possession
of Securities.......................................... 36
Section 5.6 Application of Money Collected........................... 37
Section 5.7 Limitation on Suits...................................... 37
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest................................... 38
Section 5.9 Restoration of Rights and Remedies....................... 38
Section 5.10 Rights and Remedies Cumulative........................... 38
Section 5.11 Delay or Omission Not Waiver............................. 38
Section 5.12 Control by Holders....................................... 39
Section 5.13 Waiver of Past Defaults.................................. 39
Section 5.14 Undertaking for Costs.................................... 39
Section 5.15 Waiver of Stay or Extension Laws......................... 40
ARTICLE VI The Trustee...................................................... 40
Section 6.1 Certain Duties and Responsibilities...................... 40
Section 6.2 Notice of Defaults....................................... 40
Section 6.3 Certain Rights of Trustee................................ 41
Section 6.4 Not Responsible for Recitals or Issuance
of Securities.......................................... 41
Section 6.5 May Hold Securities...................................... 42
Section 6.6 Money Held in Trust...................................... 42
Section 6.7 Compensation and Reimbursement........................... 42
Section 6.8 Disqualification; Conflicting Interests.................. 43
Section 6.9 Corporate Trustee Required; Eligibility.................. 43
Section 6.10 Resignation and Removal; Appointment
of Successor........................................... 43
Section 6.11 Acceptance of Appointment by Successor................... 45
Section 6.12 Merger, Conversion, Consolidation or Succession to
Business............................................... 46
Section 6.13 Preferential Collection of Claims Against Company........ 46
Section 6.14 Appointment of Authenticating Agent...................... 46
ARTICLE VII Holders' Lists and Reports by Trustee and Company............... 48
Section 7.1 Company to Furnish Trustee Names and Addresses
of Holders............................................. 48
Section 7.2 Preservation of Information; Communications to Holders... 49
Section 7.3 Reports by Trustee....................................... 49
Section 7.4 Reports by Company....................................... 49
- ----------
</TABLE>
v
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease........... 50
Section 8.1 Company May Consolidate, Etc. Only on Certain Terms...... 50
Section 8.2 Successor Substituted.................................... 51
ARTICLE IX Supplemental Indentures.......................................... 51
Section 9.1 Supplemental Indentures Without Consent of Holders....... 51
Section 9.2 Supplemental Indentures with Consent of Holders.......... 53
Section 9.3 Execution Of Supplemental Indentures..................... 54
Section 9.4 Effect of Supplemental Indentures........................ 54
Section 9.5 Conformity with Trust Indenture Act...................... 55
Section 9.6 Reference in Securities to Supplemental Indentures....... 55
ARTICLE X Covenants......................................................... 55
Section 10.1 Payment of Principal, Premium and Interest............... 55
Section 10.2 Maintenance of Office or Agency.......................... 55
Section 10.3 Money for Securities Payments to Be Held in Trust........ 56
Section 10.4 Statement by Officers as to Default...................... 57
Section 10.5 Existence................................................ 57
Section 10.6 Restrictions on Secured Funded Debt...................... 57
Section 10.7 Limitation on Sales and Leasebacks....................... 59
Section 10.8 Waiver of Certain Covenants.............................. 61
ARTICLE XI Redemption of Securities......................................... 61
Section 11.1 Applicability of Article................................. 61
Section 11.2 Election to Redeem; Notice to Trustee.................... 61
Section 11.3 Selection by Trustee of Securities to Be Redeemed........ 61
Section 11.4 Notice of Redemption..................................... 62
Section 11.5 Deposit of Redemption Price.............................. 63
Section 11.6 Securities Payable on Redemption Date.................... 63
Section 11.7 Securities Redeemed in Part.............................. 63
ARTICLE XII Sinking Funds................................................... 64
Section 12.1 Applicability of Article................................. 64
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.... 64
Section 12.3 Redemption of Securities for Sinking Fund................ 64
</TABLE>
- ------------
vi
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE XIII Defeasance and Covenant Defeasance............................. 65
Section 13.1 Applicability of Article; Company's Option to
Effect Defeasanceor Covenant Defeasance.................. 65
Section 13.2 Defeasance and Discharge................................. 65
Section 13.3 Covenant Defeasance...................................... 66
Section 13.4 Conditions to Defeasance or Covenant Defeasance.......... 66
Section 13.5 Deposited Money and U.S. Government Obligations to
be Held in Trust; Other Miscellaneous Provision.......... 68
Section 13.6 Reinstatement............................................ 69
ARTICLE XIV Immunity of Incorporators, Stockholders, Officers and Directors. 69
Section 14.1 Indenture and Debt Securities Solely Corporate
Obligations.............................................. 69
</TABLE>
- ----------
vii
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
INDENTURE, dated as of June 10, 1998 between Alberto-Culver Company, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 2525 Armitage
Avenue, Melrose Park, Illinois 60160, and The First National Bank of Chicago, a
national banking institution, as Trustee (herein called the "Trustee").
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 or other evidences of indebtedness to be issued in one or more
series as in this Indenture provided (herein called the "Securities").
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE I
Definitions and Other Provisions
of General Application
Section I.1 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
<PAGE>
principles" with respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally accepted 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.
"Act," when used with respect to any Holder, has the meaning specified
in Section 1.4.
"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.
"Attributable Debt" means as to any particular lease under which
either the Company or any Restricted Subsidiary is at the time liable as lessee
for a term of more than 12 months and at any date as of which the amount thereof
is to be determined, the total net obligations of the lessee for rental payments
during the remaining term of the lease (including any period for which such
lease has been extended or may, at the option of the lessor, be extended)
discounted from the respective due dates thereof to such determination date at a
rate per annum equivalent to the greater of (a) the weighted-average Yield to
Maturity of the Outstanding Securities, such average being weighted by the
principal amount of the Outstanding Securities of each series or, in the case of
Original Issue Discount Securities, by the principal amount of such outstanding
Original Issue Discount Securities that would be due and payable as of the date
of such determination upon a declaration of acceleration of the maturity thereof
pursuant to this Indenture and (b) the interest rate inherent in such lease (as
determined in good faith by the Company), both to be compounded semi-annually.
The net total obligations of the lessee for rental payments under any such lease
for any such period shall be the aggregate amount of the rent payable by the
lessee with respect to such period after excluding amounts required to be paid
on account of maintenance and repairs, services, insurance, taxes, assessments,
water rates and similar charges and contingent rents (such as those based on
sales or monetary inflation). If any lease is terminable by the lessee upon the
payment of a penalty and under the terms of the lease the termination right is
not exercisable until after the determination date and the amount of such
penalty discounted to the determination date as provided above is less than the
net amount of rentals payable after the time as of which such termination could
occur (the "termination time") discounted to the determination date as provided
above, then such discounted penalty amount shall be used instead of such
discounted amount of net rentals payable after the termination time in
calculating the Attributable Debt for such lease. If any lease is terminable by
the lessee upon the payment of a penalty and such termination right is
exercisable on the determination date and the amount of the net rentals payable
under such lease after the determination date discounted to the
<PAGE>
determination date as provided above is greater than the amount of such penalty,
the "Attributable Debt" for such lease as of such determination date shall be
equal to the amount of such penalty.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a Security in the form prescribed in
Sections 2.2 through 2.4 evidencing all or part of a series of Securities,
issued to the Depository for such series or its nominee, and registered in the
name of such Depository or nominee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Capital Lease Obligations" of either the Company or any Restricted
Subsidiary means the obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right to use) real
property, the term of which extends beyond 12 months, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under generally accepted accounting principles (including
Statement of Financial Accounting Standards No. 13, as modified, supplemented or
amended through the relevant date of determination, and including any successor
Statement of Financial Accounting Standards thereto ("Statement No. 13")) and,
for the purposes of this Indenture, the amount of such obligation shall be the
capitalized amount thereof, determined in accordance with generally accepted
accounting principles (including such Statement No. 13).
"capital stock" or "stock" includes capital stock, shares of
beneficial interests and limited partnership interests.
"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 at such time.
<PAGE>
"Company" means the corporation named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President,
its General Counsel or any Vice President, and by another Vice President, its
Treasurer, an Assistant Treasurer, its Controller or an Assistant Controller,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom, without duplication, the sum of (i) all current liabilities
except for (A) notes and loans payable, (B) current maturities of long term
debt, (C) current maturities of obligations under capital leases and (D)
customer deposits and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, which in each
case under generally accepted accounting principles would be included on a
consolidated balance sheet of the Company and its subsidiaries.
"Corporate Trust Office" means the principal office of the Trustee in
Chicago, Illinois at which at any particular time its corporate trust business
shall be administered, which currently is located at One North State Street,
Ninth Floor, Chicago, Illinois 60670.
"corporation" means a corporation, association, company, limited
partnership, partnership, joint-stock company, limited liability company or
business trust.
"covenant defeasance" has the meaning specified in Section 13.3.
"CUSIP" has the meaning specified in Section 3.11.
"default" has the meaning specified in Section 6.2.
"Defaulted Interest" has the meaning specified in Section 3.7.
"defeasance" has the meaning specified in Section 13.2.
"Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the Person designated as Depository for such series by the Company
pursuant to Section 3.1, which Person shall be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, until a successor
Depository shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depository" shall mean or include each Person who is
then a Depository hereunder, and if at any time there is more than one such
Person, "Depository" as used with
<PAGE>
respect to the Securities of any series shall mean the Depository with respect
to Securities of that series.
"Event of Default" has the meaning specified in Section 5.1.
"Funded Debt" means (i) any indebtedness of the Company or a
Restricted Subsidiary maturing more than 12 months after the time of computation
thereof, (ii) guarantees by the Company or a Restricted Subsidiary of Funded
Debt or of dividends of others (except guarantees in connection with the sale or
discount of accounts receivable, trade acceptances and other paper arising in
the ordinary course of business), (iii) in the case of any Restricted
Subsidiary, all preferred stock having mandatory redemption provisions of such
Restricted Subsidiary as reflected on such Restricted Subsidiary's balance sheet
prepared in accordance with U.S. generally accepted accounting principles, and
(iv) all Capital Lease Obligations.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, at any date, without duplication, (i) all
obligations for borrowed money of the Company or a Restricted Subsidiary or any
other indebtedness of the Company or a Restricted Subsidiary, evidenced by
bonds, debentures, notes or other similar instruments, and (ii) Funded Debt.
"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,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 3.1.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Liens" means such pledges, mortgages, security interests and other
liens on any Principal Property of the Company or a Restricted Subsidiary which
secure Secured Funded Debt.
"mandatory sinking fund payment" has the meaning specified in Section
12.1.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or
<PAGE>
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, the General Counsel or any Vice President, and by
another Vice President, the Treasurer, an Assistant Treasurer, the Controller or
an Assistant Controller, the Secretary or an Assistant Secretary, of the
Company, and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 10.4 shall be the principal executive,
financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be reasonably acceptable
to the Trustee.
"optional sinking fund payment" has the meaning specified in Section
12.1.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) 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 Securities; provided, that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities that have been defeased pursuant to Section 13.2;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice,
<PAGE>
consent or waiver hereunder, (i) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof pursuant to Section 5.2,
(ii) the principal amount of a Security denominated in one or more foreign
currencies or currency units shall be the U.S. dollar equivalent, determined in
the manner provided as contemplated by Section 3.1 on the date of original
issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the amount determined as provided in (i)
above) of such Security, and (iii) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, joint venture, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any real property (including all related
land and buildings but excluding related fixtures, machinery and equipment) or
machinery and equipment located within the United States and owned by, or leased
to, the Company or any of its Subsidiaries that has a net book value (after
deduction of accumulated depreciation) in excess of 1.0% of Consolidated Net
Tangible Assets.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
<PAGE>
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 3.1.
"Restricted Subsidiary" means any Subsidiary of the Company that owns
any Principal Property.
"sale and leaseback transaction" has the meaning specified in Section
10.7.
"Secured Funded Debt" means Funded Debt which is secured by any pledge
of, or mortgage, security interest or other lien on, any (i) Principal Property
(whether owned on the date hereof or hereafter acquired or created), (ii) shares
of stock owned by the Company or a Subsidiary in a Restricted Subsidiary or
(iii) indebtedness of a Restricted Subsidiary owed to the Company or a
Subsidiary.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock, which under ordinary circumstances (not dependent upon the
happening of a contingency) has voting power to elect a majority of the board of
directors of such corporation (or similar management body), is owned directly or
indirectly by the Company or by one or more Subsidiaries of the Company, or by
the Company and one or more Subsidiaries.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that if the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
<PAGE>
"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 Securities of any series shall mean the Trustee with respect to
Securities of that series.
"U.S. Government Obligations" has the meaning specified in Section
13.4.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Yield to Maturity" means the yield to maturity, calculated at the
time of issuance of a series of Securities or, if applicable, at the most recent
redetermination of interest on such series and calculated in accordance with
generally accepted financial practice.
Section I.2 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 such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture. 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, however, 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 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 I.3 Form of Documents Delivered to Trustee.
<PAGE>
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 I.4 Acts of Holders; Record Dates.
(a) 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 agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. 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. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of
<PAGE>
the execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 7.1) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
Section I.5 Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or 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 if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Brenda
McLeod, 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, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument, Attention: General Counsel, or at any
other address previously furnished in writing to the Trustee by the
Company.
<PAGE>
Section I.6 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. 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. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made as shall be satisfactory to the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section I.7 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section I.8 Effect of Headings and Table of Contents.
The Article and Section headings herein, the reconciliation and tie
with certain provisions of the Trust Indenture Act, and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section I.9 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section I.10 Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
<PAGE>
Section I.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section I.12 Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
the conflict of laws provisions thereof.
Section I.13 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) 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 or Redemption Date, or at the Stated Maturity; provided, however,
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE II
Security Forms
Section II.1 Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action 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 Company
Order contemplated by Section 3.3 for the authentication and delivery of such
Securities.
<PAGE>
The Trustee's certificate of authentication shall be in substantially the
form set forth in Section 2.5.
The definitive Securities may be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section II.2 Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
Alberto-Culver Company
----------------------
No. $
--------- ----------
CUSIP No.
----------
Alberto-Culver Company, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ______________________________,
or registered assigns, the principal sum of ____________________ Dollars on
_________________________ [if the Security is to bear interest prior to
Maturity, insert --, and to pay interest thereon from _________ or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on ___________ and ____________ in each year, commencing
________________, at the rate of _____% per annum, until the principal hereof
is paid or made available for payment [if applicable, insert -- , and (to the
extent that the payment of such interest shall be legally enforceable) at the
rate of _______% per annum on any overdue principal and premium and on any
overdue installment of interest.] The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the ___________ or _________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
<PAGE>
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ........% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ........% per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in New York, New York in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts [if applicable, insert --;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ALBERTO-CULVER COMPANY
Dated:
-------------------
By:
-----------------------------------------
Attest:
-----------------------
<PAGE>
....................................
Section II.3 Form of Reverse of Security .
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of .............. (herein called the
"Indenture"), between the Company and ____________________________], as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to $
.............].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........ in any year commencing with the year ..... and ending with the
year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after ..........., 19..], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before .........., ___%, and if redeemed]
during the 12-month period beginning ............... of the years indicated,
Redemption Redemption
Year Price Year Price
- ---- ----- ---- -----
and thereafter at a Redemption Price equal to ...... % of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or
<PAGE>
otherwise)] with accrued interest to the Redemption Date, but interest
installments whose Stated Maturity is on or prior to such Redemption Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on .............. in
any year commencing with the year ..... and ending with the year ..... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on or
after ........], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning ............. of the
years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ------------ -------------------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
..........., redeem any Securities of this series as contemplated by [Clause (2)
of] the preceding paragraph as a part
<PAGE>
of, or in anticipation of, any refunding operation by the application, directly
or indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than .....% per annum.]
[The sinking fund for this series provides for the redemption on
.................. in each year beginning with the year ............... and
ending with the year ................ of [not less than $.......... ("mandatory
sinking fund") and not more than] $............. aggregate principal amount of
Securities of this series. Securities of this series acquired or redeemed by the
Company otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory] sinking fund payments otherwise required to be
made [in the inverse order in which they become due].]
[If the Security is subject to redemption, insert -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
[The Indenture contains provisions for defeasance at any time of [the
entire indebtedness of this Security or] certain restrictive covenants and the
related Events of Default with respect to this Security [, in each case] upon
compliance with certain conditions set forth therein.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series,
<PAGE>
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
Stated Maturity and aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $.......... and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Interest on this Security shall be computed on the basis of [a 360-day
year of twelve 30-day months][the actual number of days elapsed and a 360-day
year].
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
This Security shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the conflict of laws
provisions thereof. Section II.4 Additional Provisions Required in Book-Entry
Security.
Any Book-Entry Security issued hereunder shall, in addition to the
provisions contained in Sections 2.2 and 2.3, bear a legend in substantially the
following form:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or
its nominee only in the limited circumstances described in the Indenture
and may not be transferred except as a whole by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository."
Section II.5 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF
As Trustee
By:
----------------------------------
Authorized Signatory
ARTICLE III
The Securities
Section III.1 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth, or determined in the
<PAGE>
manner provided, in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series;
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for any
Securities which, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable (or the method of determination thereof);
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method of calculating such rate or rates of
interest, the date or dates from which such interest shall accrue (or the
method of determination thereof), the Interest Payment Dates on which any
such interest shall be payable (or the method of determination thereof) and
the Regular Record Date for any interest payable on any Interest Payment
Date (or the method of determination thereof);
(6) whether the interest rate or interest rate formula for the
Securities may be reset at the option of the Company or otherwise, and the
date or dates on which such interest rate or interest rate formula may be
reset;
(7) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed, purchased or repaid,
in whole or in part, pursuant to such obligation;
<PAGE>
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(11) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of
America and the manner of determining the equivalent thereof in the
currency of the United States of America for purposes of the definition of
"Outstanding" in Section 1.1;
(12) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to an index or formula, the manner in which such amounts shall be
determined;
(13) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(14) the application, if any, of Section 13.2 or 13.3 to the
Securities of the series;
(15) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Book-Entry Securities and, in such case,
the Depository with respect to such Book-Entry Security or Securities and
the circumstances under which any Book-Entry Security may be registered for
transfer or exchange, or authenticated and delivered, in the name of a
Person other than such Depository or its nominee, if other than as set
forth in Section 3.5;
(16) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
5.2;
(17) any subordination provisions applicable to the Securities of the
series, which, notwithstanding the provisions of Sections 9.1 and 9.2, may
be determined without the consent of any of the Holders of any outstanding
series of Securities;
(18) the terms and conditions, if any, upon which the Securities are
to be convertible into, or exchangeable for, securities or property of the
Company, cash or any combination thereof;
<PAGE>
(19) any deletions from or modifications of or additions to the
Events of Default set forth in Section 5.1 or the covenants of the Company
set forth in Article X that pertain to the Securities of the series;
(20) whether the Securities of the series will be issued, in whole or
in part, in bearer form and, if so, any provisions related thereto; and
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 3.3) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
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 III.2 Denominations.
In the absence of any such provisions with respect to the Securities
of any series, the Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as contemplated
by Section 3.1. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section III.3 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any Series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established
<PAGE>
in or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and
3.1, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 2.1, that such form has been
established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 3.1, that such terms have been
established in conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 3.1 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original issuance
of the first Security of such series to be issued.
Unless otherwise provided for in the form of Security, each Security
shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never
<PAGE>
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
Section III.4 Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
the same Stated Maturity and aggregate principal amount and of like tenor. Until
so exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series and tenor.
Section III.5 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register 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 Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series as
designated pursuant to Section 10.2, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of the same Stated Maturity and aggregate principal amount and
of like tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
the same Stated Maturity
<PAGE>
and aggregate principal amount and of like tenor, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for 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 shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 11.3 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing, any Book-Entry Security shall be
exchangeable pursuant to this Section 3.5 for Securities registered in the name
of Persons other than the Depository for such Security or its nominee only if
(i) such Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Book-Entry Security or if at any time such
Depository ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the
Trustee a Company Order that such Book-Entry Security shall be so exchangeable
or (iii) there shall have occurred and be continuing an Event of Default with
respect to the Securities. Any Book-Entry Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Securities registered in
such names as such Depository shall direct.
Notwithstanding any other provision in this Indenture, a Book-Entry
Security may not be transferred except as a whole by the Depository with respect
to such Book-Entry Security to a nominee of such Depository or by a nominee of
such Depository to such Depository or another nominee of such Depository.
<PAGE>
Section III.6 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and the same Stated Maturity and aggregate principal amount
and of like tenor and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment by the holder of such mutilated, destroyed, lost or
stolen Security of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of 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 Securities.
Section III.7 Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 3.1 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
<PAGE>
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 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 each Holder of Securities of
such series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (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 the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section III.8 Persons Deemed Owners.
<PAGE>
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 3.7) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section III.9 Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certification of destruction to the Company quarterly.
Section III.10 Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section III.11 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE IV
Satisfaction and Discharge
<PAGE>
Section IV.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), 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 Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 and (ii) Securities
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 10.3) have
been delivered to the Trustee for cancellation; or
(B) all such Securities 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 of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest to the date of
such deposit (in the case of Securities which have become due and payable)
or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(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 have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the respective
obligations of the Company and the
<PAGE>
Trustee to any Authenticating Agent under Section 6.14 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 4.2 and the last paragraph
of Section 10.3 shall survive.
Section IV.2 Application of Trust Money.
Subject to provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE V
Remedies
Section V.1 Events of Default.
"Event of Default," wherever used herein with respect to 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 or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless such event is either inapplicable to a particular series of Securities or
has been specifically deleted or modified in or pursuant to a supplemental
indenture or Board Resolution establishing such series of Securities or in the
form of Security for such series:
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund or other payment
required pursuant to the terms of a Security of that series as established
by or pursuant to a Board Resolution as permitted by Section 3.1(9), when
and as due by the terms of a Security of that 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 which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series, and continuance of such default or breach for a period of 90 days
<PAGE>
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 Holder or Holders
of at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or 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 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) acceleration of any indebtedness for money borrowed by the Company
in an aggregate principal amount exceeding $50,000,000 under the terms of
the instrument under which such indebtedness is issued or secured, if such
acceleration is not annulled, or such indebtedness is not discharged,
within 15 Business 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 Holder or Holders of at least 25% in principal amount of the
Outstanding Securities of the series a written notice specifying such
default and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(8) any event which constitutes an "Event of Default" under the terms
governing Securities of that series established as provided in Section 3.1.
<PAGE>
Section V.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holder or Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
of the Securities of that 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) shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
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 Securities of that 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
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, 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;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section V.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
<PAGE>
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days (unless a different period is applicable for such
Security), or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the reasonable costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default with respect to 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 Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
Section V.4 Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each 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 the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.7.
No provision of this Indenture 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
Securities 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 V.5 Trustee May Enforce Claims Without Possession of Securities.
<PAGE>
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section V.6 Application of Money Collected
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities 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 Securities for principal and any premium and interest,
respectively; and
THIRD: To the Company.
Section V.7 Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that 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
<PAGE>
(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 Securities of that 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 of
such Holders, 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.
Section V.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 3.7)
any interest on such Security on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section V.9 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
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 V.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.6, 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.
<PAGE>
Section V.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the 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 V.12 Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section V.13 Waiver of Past Defaults .
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series 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 this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section V.14 Undertaking for Costs.
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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may
<PAGE>
assess costs against any such party litigant, in the manner and to the extent
provided in the Trust Indenture Act; provided that neither this Section nor the
Trust Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company
or the Trustee.
Section V.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 VI
The Trustee
Section VI.1 Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. 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 VI.2 Notice of Defaults.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 5.1(4) with respect to 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 Securities of such series.
<PAGE>
Section VI.3 Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders 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; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section VI.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee or any Authenticating Agent
shall not be accountable for the use or application by the Company of
<PAGE>
Securities or the proceeds thereof. The Trustee or any Authenticating Agent
shall not be responsible for any statement made in any prospectus or similar
document used to sell the Securities.
Section VI.5 May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section VI.6 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
Section VI.7 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as shall
be agreed to in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
loss, liability or expense, incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts 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.
<PAGE>
Section VI.8 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section VI.9 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and have an office or
agency in New York, New York where Securities may be presented for payment and
for registration of transfer or exchange. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person 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 the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section VI.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 in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 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
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
<PAGE>
(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 securities, or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security 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 with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(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 Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the 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 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 Securities of any Series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
6.11, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any Series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 6.11, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
1.6. Each notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust Office.
<PAGE>
Section VI.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every 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 the 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.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the 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 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 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 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 such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of 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
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 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 paragraphs (a) and (b) of this Section, as the case may be.
<PAGE>
(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 VI.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 the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section VI.13 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section VI.14 Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents only with
the consent of the Company with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
3.6, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 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 the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in
<PAGE>
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
<PAGE>
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF
CHICAGO As Trustee
By:
-----------------------------
As Authenticating Agent
By:
-----------------------------
Authorized Officer
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
Section VII.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after each Regular Record
Date for each series of Securities at the time then Outstanding, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders of Securities of such series as of the preceding Regular Record Date, as
the case may be; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
Notwithstanding the foregoing subsections (a) and (b), so long as the Trustee is
the Security Registrar with respect to a particular series of Securities, no
such list shall be required to be furnished in respect of such series.
<PAGE>
Section VII.2 Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section VII.3 Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by 313(a) of the Trust Indenture Act, the Trustee shall, within 60 days
after each May 15 following the date of this Indenture, deliver to Holders a
brief report, dated as of such May 15, which complies with the provisions of
such 313(a).
(b) 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 Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
Section VII.4 Reports by Company.
(a) The Company covenants and agrees to file with the Trustee copies,
within 15 Business Days after the Company is required to file the same with the
Commission, 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; or, if the Company is not required to
file information, documents or reports pursuant to either of such sections, then
to file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports, if any, which may
be required pursuant to Section 13 of the Securities Exchange Act of 1934, in
respect
<PAGE>
of a security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports, if
any, with respect to compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to time by such
rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all
Holders, as the names and addresses of such Holders appear upon the Security
Register, within 30 days after the filing thereof with the Trustee, such
summaries of information, documents and reports required to be filed by the
Company, if any, pursuant to subsections (a) and (b) of this Section 7.4 but
only to the extent required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
Section VIII.1 Company May Consolidate, Etc. Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) if the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership, trust or
other entity, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness for borrowed money or guarantee thereof which becomes an
obligation of the Company or a Restricted Subsidiary as a result of such
transaction as having been incurred by the Company or such Restricted
Subsidiary at the time of such transaction, no Event
<PAGE>
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company or a
Restricted Subsidiary, or any shares of capital stock or indebtedness of
any Restricted Subsidiary, would become subject to a mortgage, pledge,
lien, security interest or other encumbrance which would not be permitted
by this Indenture, the Company or such successor Person, as the case may
be, shall take such steps as shall be necessary effectively to secure the
Securities equally and ratably with (or prior to) all indebtedness secured
thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Section VIII.2 Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 8.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; and in the event of any such
conveyance, transfer or lease, the Company (which term shall for this purpose
mean the Person named as the Company or any successor Person which shall have
theretofore become such in the manner prescribed in Section 8.1) shall be
discharged from all liability under this Indenture and in respect of the
Securities and may be dissolved and liquidated.
ARTICLE IX
Supplemental Indentures
Section IX.1 Supplemental Indentures Without Consent of Holders.
Without 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:
<PAGE>
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, 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 with respect to all or
any series of Securities; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided, that
any such addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Security with respect to such provision or
(ii) shall become effective only when there is no such Security
Outstanding; or
(6) to secure the Securities pursuant to the requirements of Section
10.6 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.11(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause (9)
shall not adversely affect the interests of the Holders of Securities of
any series in any material respect.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may
<PAGE>
be therein contained and to accept the conveyance, transfer, assignment,
mortgage, or pledge of any property thereunder, but the Trustee shall not be
obligated to enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section IX.2 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or the rate of
accretion of any Original Issue Discount Security or any premium payable
upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.2, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 5.8 or
Section 5.13 except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of this
proviso, in accordance with the requirements of Sections 6.11(b) and
9.1(8).
Upon the request of the Company, accompanied by a copy of a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of the Holders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the
<PAGE>
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may, in its discretion but shall not be obligated to,
enter in such supplemental indenture.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of 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.
Section IX.3 Execution Of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section IX.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section IX.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section IX.6 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
<PAGE>
ARTICLE X
Covenants
Unless otherwise specified with respect to a particular series of
Securities in or pursuant to the supplemental indenture or Board Resolution
establishing such series or in the form of Security for such series, the Company
covenants, with respect to each outstanding series of Securities, as follows:
Section X.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities of the series and this Indenture.
Section X.2 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where 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 Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
<PAGE>
Section X.3 Money for 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 Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and 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 for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of 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 (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York, New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not
<PAGE>
be less than 30 days after the date of such publication, any unclaimed balance
of such money then remaining will be repaid to the Company.
Section X.4 Statement by Officers as to Default.
So long as there are Securities Outstanding at the end of the
applicable fiscal year, the Company will deliver to the Trustee, within 120 days
after the end of each such fiscal year of the Company ending after the date
hereof, an Officers' Certificate, stating whether or not to the best knowledge
of the signers thereof the Company is in default in the performance and
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
Section X.5 Existence.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its 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
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section X.6 Restrictions on Secured Funded Debt.
The Company will not, nor will it permit any Restricted Subsidiary to,
incur, issue, assume, guarantee or create any Secured Funded Debt, without
effectively providing concurrently with the incurrence, issuance, assumption,
guaranty or creation of any such Secured Funded Debt that the Outstanding
Securities (together with, if the Company shall so determine, any other
Indebtedness of the Company or such Restricted Subsidiary then existing or
thereafter created which is not subordinated to the Outstanding Securities)
shall be secured equally and ratably with (or prior to) such Secured Funded
Debt, so long as such Secured Funded Debt shall be secured by a Lien, unless,
after giving effect thereto, the sum of the aggregate amount of all outstanding
Secured Funded Debt of the Company and its Restricted Subsidiaries together with
all Attributable Debt in respect of sale and leaseback transactions relating to
a Principal Property (with the exception of Attributable Debt which is excluded
pursuant to clauses (1) to (6) of Section 10.7), would not exceed an amount
equal to the greater of (i) $100 million or (ii) 15% of Consolidated Net
Tangible Assets; provided, however, that this Section 10.6 shall not apply to,
and there shall be excluded from Secured Funded Debt in any computation under
this Section 10.6, Funded Debt secured by:
(1) Liens on property, shares of capital stock or indebtedness of any
corporation existing at the time such corporation becomes a Subsidiary;
<PAGE>
(2) Liens on property, shares of capital stock or indebtedness
existing at the time of acquisition thereof or incurred within 270 days of
the time of acquisition thereof (including in either case, without
limitation, acquisition through merger or consolidation) by the Company or
any Restricted Subsidiary;
(3) Liens on property, shares of capital stock or indebtedness
hereafter acquired (or constructed) by the Company or any Restricted
Subsidiary and created prior to, at the time of, or within 270 days after
such acquisition (including, without limitation, acquisition through merger
or consolidation) (or the completion of such construction or commencement
of commercial operation of such property, whichever is later) to secure or
provide for the payment of all or any part of the purchase price (or the
construction price) thereof;
(4) Liens in favor of the Company or any Restricted Subsidiary;
(5) Liens in favor of the United States of America, any State thereof
or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure partial, progress, advance or other
payments pursuant to any contract or provisions of any statute;
(6) Liens incurred or assumed in connection with an issuance of
revenue bonds the interest on which is exempt from Federal income taxation
pursuant to Section 103(b) of the Internal Revenue Code of 1986, as
amended;
(7) Liens securing the performance of any contract or undertaking not
directly or indirectly in connection with the borrowing of money, the
obtaining of advances or credit or the securing of Funded Debt, if made and
continuing in the ordinary course of business;
(8) Liens under workers' compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts or deposits to secure public or statutory
obligations of the Company or any Restricted Subsidiary, or deposits of
cash or obligations of the United States of America to secure surety and
appeal bonds to which the Company or any Restricted Subsidiary is a party
or in lieu of such bonds, or pledges or deposits for similar purposes in
the ordinary course of business, or Liens imposed by law, such as laborers'
or other employees', carriers', warehousemen's, mechanics', materialmen's
and vendors' Liens, and Liens arising out of judgments or awards against
the Company or any Restricted Subsidiary with respect to which the Company
or such Restricted Subsidiary at the time shall be prosecuting an appeal or
proceedings for review and with respect to which it shall have secured a
stay of execution pending such appeal or proceedings for review, or Liens
for taxes not yet subject to penalties for nonpayment or the amount or
validity of which is being in good faith contested by appropriate
proceedings by the Company or any Restricted Subsidiaries, as the case may
be, or minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and
<PAGE>
telephone lines and other similar purposes, or zoning or other restrictions
or Liens as to the use of real properties, which Liens, exceptions,
encumbrances, easements, reservations, rights and restrictions do not, in
the opinion of the Company, in the aggregate materially detract from the
value of said properties or materially impair their use in the operation of
the business of the Company and its Restricted Subsidiaries;
(9) Liens incurred to finance all or any portion of the cost of
construction, alteration or repair of any Principal Property and
improvements thereto prior to completion of such construction, alteration
or repair;
(10) Liens outstanding on the date of this Indenture; or
(11) any extension, renewal, refunding or replacement (or successive
extensions, renewals, refundings or replacements), as a whole or in part,
of any Lien referred to in the foregoing clauses (1) to (10), inclusive;
provided, however, that (i) such extension, renewal, refunding or
replacement Lien shall be limited to all or a part of the same property
that secured the Lien extended, renewed, refunded or replaced (plus
improvements on such property) and (ii) the Funded Debt secured by such
Lien at such time is not increased.
Section X.7 Limitation on Sales and Leasebacks.
The Company will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any Person providing for the leasing by the
Company or any Restricted Subsidiary of any Principal Property of the Company or
any Restricted Subsidiary, which Principal Property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person (herein
referred to as a "sale and leaseback transaction") unless, after giving effect
thereto, the aggregate amount of all Attributable Debt with respect to all such
sale and leaseback transactions plus all Secured Funded Debt (with the exception
of Funded Debt secured by liens which is excluded pursuant to clauses (1) to
(11) of Section 10.6) would not exceed an amount equal to the greater of (i)
$100 million or (ii) 15% of Consolidated Net Tangible Assets. This covenant
shall not apply to, and there shall be excluded from Attributable Debt in any
computation under Section 10.6 or this Section 10.7, Attributable Debt with
respect to, any sale and leaseback transaction if:
(1) the Company or a Restricted Subsidiary is permitted to create
Funded Debt secured by a Lien pursuant to clauses (1) to (11) of Section
10.6 on the Principal Property to be leased, in an amount equal to the
Attributable Debt with respect to such sale and leaseback transaction,
without equally and ratably securing the Outstanding Securities;
(2) the Company or a Restricted Subsidiary shall apply an amount in
cash equal to the greater of (i) the net proceeds of the sale or transfer
of the Principal Property leased pursuant to such arrangement or (ii) the
fair market value of the Principal Property so
<PAGE>
leased at the time of entering into such arrangement (as determined by the
Chief Executive Officer, the President, the Chief Financial Officer, the
Treasurer or the Controller of the Company) to the retirement of Secured
Funded Debt of the Company or any Restricted Subsidiary (other than Secured
Funded Debt owned by the Company or any Restricted Subsidiary); provided,
however, that no retirement referred to in this clause (2) may be effected
by payment at maturity or pursuant to any mandatory sinking fund payment or
any mandatory prepayment provision of Secured Funded Debt;
(3) the Company or a Restricted Subsidiary immediately applies the
net proceeds of the sale or transfer of the Principal Property leased
pursuant to such transaction to investment in another Principal Property;
provided, however, that this exception shall apply only if such proceeds
invested in such other Principal Property shall not exceed the total
acquisition, repair, alteration and construction cost of the Company or any
Restricted Subsidiary in such other Principal Property less amounts secured
by any purchase money or construction mortgages on such Principal Property;
(4) the effective date of any such arrangement is within 270 days of
the acquisition of the Principal Property (including, without limitation,
acquisition by merger or consolidation) or the completion of construction
and commencement of operation thereof, whichever is later;
(5) the lease in such sale and leaseback transaction is for a term,
including renewals, of not more than three years; or
(6) such sale and leaseback transaction is entered into between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries,
which in each case shall include any Subsidiary which shall become a
Restricted Subsidiary after giving effect to such sale and leaseback
transaction.
Section X.8 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 10.6 to 10.8, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, 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 so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE XI
<PAGE>
Redemption of Securities
Section XI.1 Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series)
in accordance with this Article.
Section XI.2 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company, the Company shall, at least 60 days, in the event of a redemption
of less than all the Securities of any series, or at least 45 days, in the event
of a redemption of all the Securities of any series, prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
Section XI.3 Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such 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 Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any 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 Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
<PAGE>
Section XI.4 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including, subject to Section 3.11, the CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section XI.5 Deposit of Redemption Price.
At or before the opening of business on any Redemption Date, 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 10.3) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
<PAGE>
Section XI.6 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular or Special Record Dates according to
their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section XI.7 Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, 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 Security so surrendered. If a Book-Entry Security is so surrendered, such
new Security so issued shall be a new Book-Entry Security.
ARTICLE XII
Sinking Funds
Section XII.1 Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series
<PAGE>
is herein referred to as an "optional sinking fund payment." If provided for by
the terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.2. Each sinking
fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
Section XII.2 Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section XII.3 Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
any series of Securities, 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 and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
<PAGE>
ARTICLE XIII
Defeasance and Covenant Defeasance
Section XIII.1 Applicability of Article; Company's Option to Effect Defeasance
or Covenant Defeasance.
If pursuant to Section 3.1 provision is made for either or both
of (a) defeasance of the Securities of a series under Section 13.2 or (b)
covenant defeasance of the Securities of a series under Section 13.3, then the
provisions of such Section or Sections, as the case may be, together with the
other provisions of this Article XIII, shall be applicable to the Securities of
such series, and the Company may at its option by Board Resolution, at any time,
with respect to the Securities of such series, elect to have either Section 13.2
(if applicable) or Section 13.3 (if applicable) be applied to the Outstanding
Securities of such series upon compliance with the conditions set forth below in
this Article XIII.
Section XIII.2 Defeasance and Discharge.
Upon the Company's exercise of the above option applicable to
this Section, the Company shall be deemed to have been discharged from its
obligations with respect to the Outstanding Securities of such series on and
after the date the conditions precedent set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such series and to have satisfied
all its other obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
thereunder: (A) the rights of Holders of Outstanding Securities of such series
to receive, solely from the trust fund described in Section 13.4 as more fully
set forth in such Section, payments of the principal of (and premium and
interest, if any, on) such Securities when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 3.4, 3.5,
3.6, 10.2 and 10.3 and such obligations as shall be ancillary thereto, (C) the
rights, powers, trusts, duties, immunities and other provisions in respect of
the Trustee or any Authenticating Agent hereunder and (D) this Article XIII.
Subject to compliance with this Article XIII, the Company may exercise its
option under this Section 13.2 notwithstanding the prior exercise of its option
under Section 13.3 with respect to the Securities of such series.
<PAGE>
Section XIII.3 Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this
Section, the Company shall be released from its obligations under Sections 8.1,
10.6, 10.7 and 10.8 (and any covenant applicable to such Securities that are
determined pursuant to Section 3.1 to be subject to this provision) and the
occurrence of an event specified in Section 5.1(4) (with respect to any of
Sections 8.1, 10.6, 10.7 or 10.8) (and any other Event of Default applicable to
such Securities that are determined pursuant to Section 3.1 to be subject to
this provision) shall not be deemed to be an Event of Default with respect to
the Outstanding Securities of such series on and after the date the conditions
set forth below are satisfied (hereinafter, "covenant defeasance"). For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities of such series, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or clause whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or clause or by reason of any reference in
any such Section or clause to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.
Section XIII.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions precedent to application of
either Section 13.2 or Section 13.3 to the Outstanding Securities of such
series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.9 who shall agree to comply with the provisions of this
Article XIII applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A)
money in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a combination thereof,
sufficient, without reinvestment, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge,
the principal of (and premium and interest, if any on) the Outstanding
Securities of such series on the Maturity of such principal, or premium and
interest, if any. Before such a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future
date or dates in accordance with Article XI, which shall be given effect in
applying the foregoing. For this purpose, "U.S. Government Obligations"
means securities that are (x) direct obligations of the United States of
America for the payment of which its full faith and credit is pledged or
(y) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also
<PAGE>
include a depository receipt issued by a bank (as defined in section 3(a) (2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such 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 depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depositary receipt.
(2) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing (A) on the date of such deposit or
(B) insofar as subsections 5.1(5) and 5.1(6) are concerned, at any time during
the period ending on the 121st day after the date of such deposit or, if longer,
ending on the day following the expiration of the longest preference period
applicable to the Company in respect of such deposit (it being understood that
the condition in this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such defeasance or covenant defeasance shall not (A) cause the Trustee
for the Securities of such series to have a conflicting interest as defined in
Section 6.8 or for purposes of the Trust Indenture Act with respect to any
securities of the Company or (B) result in the trust arising from such deposit
to constitute, unless it is qualified as, a regulated investment company under
the Investment Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall 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.
(5) In the case of an election under Section 13.2, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling, or (y) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
(6) In the case of an election under Section 13.3, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
the Outstanding Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal
<PAGE>
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which may
be imposed on the Company in connection therewith pursuant to Section 3.1.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 13.2
or the covenant defeasance under Section 13.3 (as the case may be) have
been complied with.
Section XIII.5 Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee -- collectively, for purposes of
this Section 13.5, the "Trustee") pursuant to Section 13.4 in respect of the
Outstanding Securities of such series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (but not
including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 13.4 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 13.4 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
Section XIII.6 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 13.2 or 13.3 by reason of any order or judgment or any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under the Securities of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to this Article XIII until such time as the Trustee or Paying Agent is
permitted
<PAGE>
to apply all such money in accordance with Section 13.2 or 13.3; provided,
however, that if the Company makes any payment of principal of (and premium, if
any) or interest on any such Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
the Paying Agent.
ARTICLE XIV
Immunity of Incorporators, Stockholders,
Officers and Directors
Section 14.1 Indenture and Debt Securities Solely Corporate Obligations.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, any supplemental indenture, or of any Security, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer, director or employee, as such, past, present
or future, of the Company or of any predecessor or successor corporation, either
directly or through the Company, 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 understood that this Indenture and the obligations issued
hereunder are solely corporate obligations, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers, directors or employees, as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture, or in any of
the Securities or implied thereby; and that any and all such personal liability,
either at common law or in equity or by constitution or statute of, and any and
all such rights and claims against, every such incorporator, stockholder,
officer, director or employee, as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied thereby, are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issue of
such Securities.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
------------------
<PAGE>
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.
ALBERTO-CULVER COMPANY
By: /s/ William J. Cernugel
-------------------------------
Name: William J. Cernugel
Title: Senior Vice President,
Finance and Controller
Attest:
/s/ Gary P. Schmidt
- -------------------------
Gary P. Schmidt
Assistant Secretary
THE FIRST NATIONAL BANK OF CHICAGO
As Trustee
By: /s/ Brenda McCleod
-------------------------------
Name: B. L. McCleod
Title: Trust Officer
Attest:
/s/ A. Movitz
- -------------------------
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 12th day of June, 1998, before me personally came William J.
Cernugel, to me known, who, being by me duly sworn, did depose and say that he
is the Senior Vice President, Finance and Controller of Alberto-Culver Company,
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.
/s/ Adrienne Paladino
------------------------------
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 15th day of June, 1998, before me personally came B. L. McCleod, to
me known, who, being by me duly sworn, did depose and say that he is the
Authorized Signer of The First National Bank of Chicago, 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.
/s/ Anthony Marsh
------------------------------
<PAGE>
EXHIBIT 4(b)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY
OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY.
ALBERTO-CULVER COMPANY
6.375% Debentures due June 15, 2028
Number 1 $120,000,000
CUSIP No. 013068AC5
ALBERTO-CULVER COMPANY, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company," which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of One Hundred and Twenty Million Dollars ($120,000,000) on June
15, 2028 and to pay interest thereon from June 15, 1998 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on June 15 and December 15 in each year, commencing December 15,
1998, at the rate of 6.375% per annum, until the principal hereof is paid or
made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the June 1 or December 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this
<PAGE>
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts. Payment of the principal of, and premium if any, on the Security will be
made at the office or agency of the Company maintained for that purpose in New
York, New York. Payment of the interest on this Security will be paid to the
person entitled thereto by wire transfer in immediately available funds on each
applicable Interest Payment Date, not later than 2:30 P.M. Eastern Standard
Time.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ALBERTO-CULVER COMPANY
Dated: June 15, 1998
By: /s/ William J. Cernugel
-------------------------------------
William J. Cernugel
Senior Vice President, Finance
and Controller
Attest:
/s/ Gary P. Schmidt
....................................
Assistant Secretary
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
As Trustee
By: /s/ Brenda McCleod
-------------------------------------
Trust Officer
<PAGE>
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of June 10, 1998 (herein called the
"Indenture"), between the Company and The First National Bank of Chicago, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited, except as provided in the Indenture, in
aggregate principal amount to $120,000,000.
The Securities of this series are subject to redemption upon not less
than 30 days and not more than 60 days notice by mail, at any time, in whole or
in part, at the option of the Company, at a redemption price equal to (a) prior
to and including June 15, 2008, the greater of (i) 100% of the principal amount
of such Debentures, (ii) the sum of the present values of the remaining
scheduled payments of principal (as if such principal was scheduled to be paid
on June 15, 2008 rather than June 15, 2028) and interest thereon (not including
the portion of any such payments of interest accrued as of the redemption date)
up to June 15, 2008 or (iii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including the portion
of any such payments of interest accrued as of the redemption date) up to June
15, 2028 or (b) from June 15, 2008 to June 15, 2028, the greater of (i) 100% of
the principal amount of such Debentures or (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon (not
including the portion of any such payments of interest accrued as of the
redemption date) up to June 15, 2028, discounted, in each case, to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined below)
determined on the third Business Day preceding such redemption date, plus, in
each case, accrued and unpaid interest thereon to the redemption date.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus (i) 0.00% for redemptions prior to
and including June 15, 2008 or (ii) 0.15% for redemptions from June 15, 2008 to
June 15, 2028.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Reference Treasury Dealer as having a maturity comparable to the
period from the redemption date to either June 15, 2008 or June 15, 2028, as
applicable, that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity.
"Comparable Treasury Price" means, with respect to any redemption
date, the average of
<PAGE>
the Reference Treasury Dealer Quotations for such redemption date.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. (New York
City time) on the third Business Day preceding such redemption date.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co.,
BancAmerica Robertson Stephens, and First Chicago Capital Markets, Inc. and
their respective successors; provided, however, that if any of the foregoing
shall cease to be a primary U.S. Government securities dealer (a "Primary
Treasury Dealer") or is no longer quoting prices for United States Treasury
securities, the Company shall substitute therefor another Primary Treasury
Dealer.
In the event of redemption of this Security, in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
This Security will be repaid on June 15, 2008, at the option of the
Holder, at 100% of its principal amount, together with accrued interest to June
15, 2008. In order for a Holder to exercise this option, the Company must
receive at its office or agency in New York, New York, during the period
beginning on April 16, 2008 and ending at 5:00 P.M. (New York City time) on May
16, 2008 (or, if May 16, 2008 is not a Business Day, the next succeeding
Business Day), this Security with the form below entitled "Option to Elect
Repayment on June 15, 2008" duly completed. Any such notice received by the
Company during the period beginning April 16, 2008 and ending at 5:00 P.M. (New
York City time) on May 16, 2008 (or, if May 16, 2008 is not a Business Day, the
next succeeding Business Day) shall be irrevocable. No transfer or exchange of
this Security (or, in the event that this Security is to be repaid in part, such
portion of this Security to be repaid) will be permitted after such notice is
received by the Company. The repayment option may be exercised by the Holder
for less than the entire principal amount of this Security, so long as the
principal amount that is to be repaid is equal to $1,000 or any integral
multiple thereof. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of this Security for repayment will
be determined by the Company, whose determination will be final and binding.
In the event of repayment of this Security, in part only, a new
Security or Securities of this series and of like tenor for the unrepayed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
<PAGE>
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and the
related Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
Stated Maturity and aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
<PAGE>
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
This Security shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the conflict of laws
provisions thereof.
<PAGE>
OPTION TO ELECT REPAYMENT ON JUNE 15, 2008
The undersigned hereby irrevocably requests and instructs the Company to
repay the within or attached Security (or portion thereof specified below)
pursuant to its terms at a price equal to the principal amount thereof to be
repaid, together with interest thereon to June 15, 2008, to the undersigned at
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print or Type Name, Address and Telephone Number of the undersigned)
For the within or attached Security to be repaid, the Company must receive
at its office or agency in New York, New York, during the period beginning on
April 16, 2008 and ending at 5:00 P.M. (New York City time) on May 16, 2008 (or,
if May 16, 2008 is not a Business Day, the next succeeding Business Day) this
Security with this "Option to Elect Repayment on June 15, 2008" form duly
completed. Any such notice received by the Company during the period beginning
April 16, 2008 and ending at 5:00 P.M. (New York City time) on May 16, 2008 (or,
if May 16, 2008 is not a Business Day, the next succeeding Business Day) shall
be irrevocable. No transfer or exchange of this Security (or, in the event that
this Security is to be repaid in part, such portion of this Security to be
repaid) will be permitted after such notice is received by the Company.
If less than the entire principal amount of the within or attached Security
is to be repaid, specify the portion thereof (which shall be $1,000 or an
integral multiple of $1,000) which the Holder elects to have repaid: $_________;
and specify the denomination or denominations (which shall be $1,000 or an
integral multiple of $1,000) of the Security or Securities to be issued to the
Holder for the portion of the within attached Security not being repaid (in the
absence of any such specification, one such Security shall be issued for the
portion not being repaid): $___________.
Dated:
--------------------------------------------------
Note: The signature to this Option to Elect
Repayment on June 15, 2008 must correspond with
the name as written upon the face of the Security
in every particular without alteration or
enlargement or any change whatsoever.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
consolidated balance sheet as of June 30, 1998 and the consolidated statement of
earnings for the nine months ended June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 152,265
<SECURITIES> 909
<RECEIVABLES> 131,891
<ALLOWANCES> 9,682
<INVENTORY> 354,907
<CURRENT-ASSETS> 656,728
<PP&E> 384,384
<DEPRECIATION> 178,700
<TOTAL-ASSETS> 1,108,161
<CURRENT-LIABILITIES> 295,710
<BONDS> 265,495
0
0
<COMMON> 13,674
<OTHER-SE> 487,173
<TOTAL-LIABILITY-AND-EQUITY> 1,108,161
<SALES> 1,368,075
<TOTAL-REVENUES> 1,368,075
<CGS> 670,914
<TOTAL-COSTS> 670,914
<OTHER-EXPENSES> 600,859
<LOSS-PROVISION> 4,498
<INTEREST-EXPENSE> 8,736
<INCOME-PRETAX> 96,302
<INCOME-TAX> 35,872
<INCOME-CONTINUING> 60,430
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,430
<EPS-PRIMARY> 1.07
<EPS-DILUTED> .99
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
consolidated balance sheet as of June 30, 1997 and the consolidated statement of
earnings for the nine months ended June 30, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 69,977
<SECURITIES> 8,750
<RECEIVABLES> 131,741
<ALLOWANCES> 9,127
<INVENTORY> 328,658
<CURRENT-ASSETS> 562,157
<PP&E> 339,551
<DEPRECIATION> 151,080
<TOTAL-ASSETS> 978,325
<CURRENT-LIABILITIES> 302,266
<BONDS> 155,587
0
0
<COMMON> 13,645
<OTHER-SE> 466,975
<TOTAL-LIABILITY-AND-EQUITY> 978,325
<SALES> 1,321,892
<TOTAL-REVENUES> 1,321,892
<CGS> 660,179
<TOTAL-COSTS> 660,179
<OTHER-EXPENSES> 576,027
<LOSS-PROVISION> 4,554
<INTEREST-EXPENSE> 9,027
<INCOME-PRETAX> 101,320
<INCOME-TAX> 37,741
<INCOME-CONTINUING> 63,579
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,579
<EPS-PRIMARY> 1.14
<EPS-DILUTED> 1.05
</TABLE>
