<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 23, 1996
REGISTRATION NUMBER
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
K N ENERGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
KANSAS 48-0290000
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
370 VAN GORDON STREET MARTHA B. WYRSCH
P.O. BOX 281304 VICE PRESIDENT, DEPUTY GENERAL COUNSEL & SECRETARY
LAKEWOOD, COLORADO 80228-8304 370 VAN GORDON STREET, P.O. BOX 281304
(303) 989-1740 LAKEWOOD, COLORADO 80228-8304
(303) 989-1740
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING (NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE NUMBER,
OFFICES) INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
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Copy to:
C. MICHAEL HARRINGTON
VINSON & ELKINS L.L.P.
3600 FIRST CITY TOWER
HOUSTON, TEXAS 77002-6760
(713) 758-2148
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT PRICE FEE
<S> <C> <C> <C> <C>
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Primary Offering:
Debt Securities........................... (1) (1) $300,000,000(2) $103,450
Common Stock, par value $5.00 per share...
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Secondary Offering:
Common Stock, par value $5.00 per share... 500,000 shares $32.6875(3) $16,343,750 $5,636
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</TABLE>
(1) Omitted pursuant to Rule 457(o).
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(3) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the high and low prices of the Common Stock on the
New York Stock Exchange Composite Tape on May 21, 1996.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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<PAGE> 2
PROSPECTUS
K N ENERGY, INC.
DEBT SECURITIES
COMMON STOCK
------------------------------
K N Energy, Inc. ("K N" or the "Company") may offer and sell from time to
time, in one or more series, its unsecured debt securities consisting of notes,
debentures or other evidences of indebtedness (the "Debt Securities"). Both the
Company and its largest stockholder, Cabot Corporation (the "Selling
Stockholder"), may also offer and sell from time to time shares of its common
stock, par value $5.00 per share (the "Common Stock"). The aggregate initial
offering prices of the Debt Securities and the Common Stock offered by the
Company hereby (the "Securities") will not exceed $300,000,000 or, if
applicable, the equivalent thereof in any other currency or currency unit, and
the number of shares of Common Stock offered by the Selling Stockholder hereby
will not exceed 1,500,000. The Securities will be offered in amounts, at prices
and on terms to be determined in light of market conditions at the time of sale
and set forth in a supplement to this Prospectus (a "Prospectus Supplement").
If the offering and sale of Securities in respect of which this Prospectus
is being delivered includes a series of Debt Securities, then the terms of such
series of Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, ranking as
senior or subordinated Debt Securities, maturity, interest rate or rates (or
method of determining the same) and time or times of payment of any interest,
any terms for optional or mandatory redemption, which may include redemption at
the option of holders upon the occurrence of certain events, conversion into
Common Stock, or payment of additional amounts or any sinking fund provisions,
any initial public offering price, the proceeds to the Company and any other
specific terms in connection with the offering and sale of such series of Debt
Securities will be set forth in a Prospectus Supplement. As used herein, Debt
Securities shall include securities denominated in United States dollars or, at
the option of the Company if so specified in an applicable Prospectus
Supplement, in any other currency or currency unit, or in amounts determined by
reference to an index.
The Securities may be sold directly by the Company or the Selling
Stockholder to investors, through agents designated from time to time or to or
through underwriters or dealers. See "Plan of Distribution". If any agents of
the Company or the Selling Stockholder or any underwriters are involved in the
sale of any Securities in respect of which this Prospectus is being delivered,
the names of such agents or underwriters and any applicable commissions or
discounts will be set forth in a Prospectus Supplement. The net proceeds to the
Company from such sale also will be set forth in a Prospectus Supplement. The
Company will not receive any of the proceeds from the sale of any Common Stock
by the Selling Stockholder. See "Use of Proceeds."
Debt Securities may be issued in registered form or bearer form with or
without interest coupons attached, or both. In addition, all or a portion of the
Debt Securities of a series may be issuable in temporary or permanent global
form. Debt Securities in bearer form are offered only to non-United States
persons and to offices located outside the United States of certain United
States financial institutions.
------------------------------
The Common Stock is traded on the New York Stock Exchange under the symbol
"KNE." Any Common Stock sold pursuant to a Prospectus Supplement will be listed
on such exchange, subject to official notice of issuance.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------
This Prospectus may not be used to consummate sales of the Securities
unless accompanied by a Prospectus Supplement.
THE DATE OF THE PROSPECTUS IS , 1996.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and New York Regional Office, Seven World Trade Center, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, Washington, D.C. 20549 at prescribed rates.
In addition, reports, proxy statements and other information concerning the
Company can be inspected at the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, on which exchange the Common Stock is listed.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statements for further information with respect to the
Company and the securities offered hereby. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statements or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-6446) pursuant to the Exchange Act are incorporated by reference and made a
part hereof:
(a) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995; and
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the date of this Prospectus and
prior to the termination of the offering of the Securities pursuant hereto shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such document. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to any person, including any
beneficial owner of Securities, to whom this Prospectus is delivered, upon
written or oral request of such person, a copy of any and all of the documents
referred to above which have been incorporated by reference in this Prospectus
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Such requests should be directed
to the office of the Treasurer, K N Energy, Inc., P.O. Box 281304, Lakewood,
Colorado 80228-8304, telephone number (303) 989-1740.
2
<PAGE> 4
THE COMPANY
The Company and its subsidiaries constitute principally an integrated
natural gas enterprise with operations in the states of Colorado, Kansas,
Montana, Nebraska, Oklahoma, Texas and Wyoming. As an integrated organization,
the Company and its subsidiaries participate in all phases of the natural gas
business from reserve development and gas gathering to the gathering of field
supplies, transmission to markets and distribution to both industrial and retail
customers. In addition, certain of the Company's subsidiaries engage in energy
marketing.
K N was incorporated under the laws of the State of Kansas in 1927. The
address of its principal executive offices is 370 Van Gordon Street, P. O. Box
281304, Lakewood, Colorado 80228-8304 and its telephone number is (303)
989-1740.
USE OF PROCEEDS
Except as may otherwise be described in the Prospectus Supplement relating
to an offering of Securities, the net proceeds from the sale of the Securities
offered by the Company pursuant to this Prospectus and such Prospectus
Supplement (the "Offered Securities") will be used for general corporate
purposes. Any specific allocation of the net proceeds of an offering of
Securities by the Company to a specific purpose will be determined at the time
of such offering and will be described in the related Prospectus Supplement.
The Company will not receive any proceeds from the sale of any Common Stock
by the Selling Stockholder.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for the periods shown.
<TABLE>
<CAPTION>
THREE MONTHS YEARS ENDED DECEMBER 31,
ENDED MARCH 31, ------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
- --------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
3.73 3.07 1.69 2.41 2.61 2.70
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings are the sum of net income (from
continuing operations), taxes and fixed charges. Fixed charges are interest,
amortization of debt discount, premium and expense, preferred stock dividends of
a subsidiary, and the estimated interest portion of rental charges. The
allowance for borrowed funds used during construction recognized for gas utility
operations has been added to fixed charges and is included in earnings. A
statement setting forth the computation of the ratios of earnings to fixed
charges is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
3
<PAGE> 5
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either senior or subordinated debt of
the Company and will be issued, in the case of Debt Securities that will be
senior debt ("Senior Debt Securities"), under an Indenture dated as of November
20, 1993 (the "Senior Debt Indenture"), between the Company and First Trust of
Illinois, National Association, as successor trustee, and, in the case of Debt
Securities that will be subordinated debt ("Subordinated Debt Securities"),
under a Subordinated Indenture dated as of May 15, 1996 (the "Subordinated Debt
Indenture"), between the Company and First Trust of Illinois, National
Association, as trustee. The Senior Debt Indenture and the Subordinated Debt
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures." First Trust of Illinois, National
Association (and any successor thereto as trustee under the Indentures) is
hereinafter referred to as the "Trustee." The Indentures are filed as exhibits
to the Registration Statement. The following summaries of certain provisions of
the Indentures and the Debt Securities do not purport to be complete and
summaries of certain provisions of the Indentures and the Debt Securities do not
purport to be complete and such summaries are subject to the detailed provisions
of the applicable Indenture to which reference is hereby made for a full
description of such provisions, including the definition of certain terms used
herein. Section references in parentheses below are to sections in both
Indentures unless otherwise indicated. Wherever particular sections or defined
terms of the applicable Indenture are referred to, such sections or defined
terms are incorporated herein by reference as part of the statement made, and
the statement is qualified in its entirety by such reference. The Indentures are
substantially identical, except for certain covenants of the Company and
provisions relating to subordination and conversion.
The Debt Securities may be issued from time to time in one or more series.
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities of all series. The particular terms
of each series of Debt Securities offered by any Prospectus Supplement (the
"Offered Debt Securities") will be described therein.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Debt Securities will be unsecured senior or subordinated
obligations of the Company and may be issued from time to time in one or more
series. The Indentures do not limit the amount of Debt Securities, debentures,
notes or other types of indebtedness that may be issued by the Company or any of
its subsidiaries nor do they restrict transactions between the Company and its
affiliates or the payment of dividends or other distributions by the Company to
its stockholders. The rights of the Company's creditors, including holders of
Debt Securities, will be limited to the assets of the Company and will not be an
obligation of any of its Subsidiaries. In addition, other than as may be set
forth in any Prospectus Supplement, the Indentures do not and the Debt
Securities will not contain any covenants or other provisions that are intended
to afford holders of the Debt Securities special protection in the event of
either a change of control of the Company or a highly leveraged transaction by
the Company.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Offered Debt Securities (to the extent such
terms are applicable to such Offered Debt Securities): (i) the title of the
Offered Debt Securities; (ii) classification as either Senior Debt Securities or
Subordinated Debt Securities; (iii) whether the Offered Debt Securities that
constitute Subordinated Debt Securities are convertible into Common Stock and,
if so, the terms and conditions upon which such conversion will be effected
including the initial conversion price or conversion rate and any adjustments
thereto in addition to or different from those described herein, the conversion
period and other conversion provisions in addition to or in lieu of those
described herein; (iv) any limit on the aggregate principal amount of the
Offered Debt Securities; (v) whether the Offered Debt Securities are to be
issuable as Registered Securities or Bearer Securities or both, whether any of
the Offered Debt Securities are to be issuable initially in temporary global
form and whether any of the Offered Debt Securities are to be in permanent
global form; (vi) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which the Offered Debt Securities will be
issued; (vii) the date or dates on which the Offered Debt Securities will
mature; (viii) the rate or rates per annum (or the method by which such will be
determined) at which the Offered Debt Securities will bear interest, if any, and
the date from which any such interest will accrue; (ix) the Interest Payment
Dates on
4
<PAGE> 6
which any such interest on the Offered Debt Securities will be payable, the
Regular Record Date for any interest payable on any Offered Debt Securities
which are Registered Securities on any Interest Payment Date and the extent to
which, or the manner in which, any interest payable on a temporary global
Offered Debt Security on an Interest Payment Date will be paid; (x) any
mandatory or optional sinking fund or analogous provisions; (xi) each office or
agency where, subject to the terms of the Indentures as described below under
"Payment and Paying Agents", the principal of and any premium and interest on
the Offered Debt Securities will be payable and each office or agency where,
subject to the terms of the Indentures as described below under "Form, Exchange,
Registration and Transfer", the Offered Debt Securities may be presented for
registration of transfer or exchange; (xii) the right of the Company to redeem
the Offered Debt Securities at its option and the period or periods, if any,
within which and the price or prices at which the Offered Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed, in
whole or in part, and the other detailed terms and provisions of any such
optional or mandatory redemption; (xiii) the denominations in which any Offered
Debt Securities which are Registered Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof, and the denomination
or denominations in which any Offered Debt Securities which are Bearer
Securities will be issuable, if other than the denomination of $5,000; (xiv) the
currency or currencies (including composite currencies) in which payment of
principal of and any premium and interest on the Offered Debt Securities is
payable; (xv) any index used to determine the amount of payments of principal of
and any premium and interest on the Offered Debt Securities; (xvi) information
with respect to book-entry procedures, if any; and (xvii) any other terms of the
Offered Debt Securities not inconsistent with the provisions of the Indentures.
(Section 301) Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to the Offered
Debt Securities.
Debt Securities may be issued as Original Issue Discount Securities. An
Original Issue Discount Security is a Debt Security, including any Zero-Coupon
Security, which is issued at a price lower than the amount payable upon the
Stated Maturity thereof and which provides that upon redemption or acceleration
of the maturity thereof an amount less than the amount payable upon the Stated
Maturity thereof and determined in accordance with the terms of such Debt
Security shall become due and payable. Special United States federal income tax
considerations applicable to Debt Securities issued at an original issue
discount, including Original Issue Discount Securities, and special United
States tax considerations and other terms and restrictions applicable to any
Debt Securities which are issued in bearer form, offered exclusively to United
States Aliens or denominated in other than United States dollars, will be set
forth in a Prospectus Supplement relating thereto.
Form, Exchange, Registration and Transfer. Debt Securities of a series may
be issuable in definitive form solely as Registered Securities, solely as Bearer
Securities or as both Registered Securities and Bearer Securities. Unless
otherwise indicated in an applicable Prospectus Supplement, Bearer Securities
will have interest coupons attached. (Section 201) The Indentures also provide
that Debt Securities of a series may be issuable in temporary or permanent
global form. (Section 201)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and Bearer Securities, at
the option of the Holder, and subject to the terms of the applicable Indenture,
Bearer Securities (with all unmatured coupons, except as provided below, and all
matured coupons in default) of such series will be exchangeable for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Bearer Securities surrendered in exchange
for Registered Securities between a Regular Record Date or a Special Record Date
and the relevant date for payment of interest shall be surrendered without the
coupon relating to such date for payment of interest, and interest accrued as of
such date will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the applicable Indenture.
Bearer Securities will not be issued in exchange for Registered Securities.
(Section 305)
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed), at the office
5
<PAGE> 7
of the Security Registrar or at the office of any transfer agent designated by
the Company for such purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without service charge and
upon payment of any taxes and other governmental charges as described in the
Indentures. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
will serve initially as Security Registrar. (Section 305) If a Prospectus
Supplement refers to any transfer agents (in addition to the Security Registrar)
initially designated by the Company with respect to any series of Debt
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
solely as Registered Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt Securities
of a series are also issuable as Bearer Securities, the Company will be required
to maintain (in addition to the Security Registrar) a transfer agent in a Place
of Payment for such series located outside the United States. The Company may at
any time designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002)
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
date of the first publication of the relevant notice of redemption or, if
Securities of the series are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security, or portion thereof, called
for redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that series
and like tenor which is immediately surrendered for redemption. (Section 305)
Payment and Paying Agents. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of principal of and any premium and interest on
Bearer Securities will be payable, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States as
the Company may designate from time to time, in the manner indicated in such
Prospectus Supplement. (Section 1002) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of interest on Bearer Securities on
any Interest Payment Date will be made only against surrender to the Paying
Agent of the coupon relating to such Interest Payment Date. (Section 1001) No
payment with respect to any Bearer Security will be made at any office or agency
of the Company in the United States or by check mailed to any address in the
United States or by transfer to any account maintained with a bank located in
the United States. Notwithstanding the foregoing, payments of principal of and
any premium and interest on Bearer Securities denominated and payable in U.S.
dollars will be made at the office of the Company's Paying Agent in the Borough
of Manhattan. The City of New York, if (but only if) payment of the full amount
thereof in U.S. dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities will be
made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment of
any interest may be made by check mailed on or before the due date to the
address of the Person entitled thereto as such address shall appear in the
Security Register. (Sections 307, 1002) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Company, at its principal executive offices in Lakewood, Colorado will act as
its own Paying Agent for payments with respect to Debt Securities which are
issuable solely as Registered Securities and the Company will maintain a Paying
Agent outside the United States for payments with respect to Debt Securities
(subject to limitations described above
6
<PAGE> 8
in the case of Bearer Securities) which are issuable solely as Bearer Securities
or as both Registered Securities and Bearer Securities. Any Paying Agents
outside the United States and any other Paying Agents in the United States
initially designated by Company for the Debt Securities will be named in an
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that,
if Debt Securities of a series are issuable solely as Registered Securities, the
Company will be required to maintain a Paying Agent in each Place of Payment for
such series and, if Debt Securities of a series are issuable as Bearer
Securities, the Company will be required to maintain (i) a Paying Agent in the
Borough of Manhattan, The City of New York for principal payments with respect
to any Registered Securities of the series (and for payments with respect to
Bearer Securities of the series in the circumstances described above, but not
otherwise), and (ii) a Paying Agent in a Place of Payment located outside the
United States where Debt Securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment. (Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company, and the Holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof. (Section 1003)
Global Debt Securities. Debt Securities of a series may be issued in whole
or in part in the form of one or more global Debt Securities that will be
deposited with, or on behalf of, a depository identified in the Prospectus
Supplement relating to such series. Global Debt Securities may be issued in
either registered or bearer form and in either temporary or permanent form.
(Section 203) Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a global Debt Security may not
be transferred except as a whole by the depository for such global Debt Security
to a nominee of such depository or by a nominee of such depository to such
depository or another nominee of such depository or by the depository or any
nominee to a successor depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a series
of Debt Securities and certain limitations and restrictions relating to a series
of Bearer Securities in the form of one or more global Debt Securities will be
described in the Prospectus Supplement relating to such series.
Events of Default. Any one of the following events constitutes an Event of
Default under each Indenture with respect to Debt Securities of any series: (a)
failure to pay any interest on any Debt Security of that series when due,
continued for 30 days; (b) failure to pay principal of or any premium on any
Debt Security of that series when due; (c) failure to deposit any sinking fund
payment, when due, in respect of any Debt Security of that series; (d) failure
to perform any other covenant of the Company in such Indenture (other than a
covenant included in such Indenture solely for the benefit of series of any Debt
Securities other than that series), continued for 90 days after written notice
as provided in such Indenture; (e) certain events in bankruptcy, insolvency or
reorganization involving the Company; and (f) any other Event of Default
provided with respect to Debt Securities of that series (Section 501)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of that
series by notice as provided in the applicable Indenture may declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all the Debt Securities of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series may, under certain circumstances, rescind and annul such acceleration.
(Section 502)
Each Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee is under no
obligation to exercise any of its rights or powers under such Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee
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reasonable indemnity. (Sections 601, 603) Subject to such provisions for the
indemnification of the Trustee, the Holders of a majority in aggregate principal
amount of the Outstanding Securities of any series have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series; provided, however, that the
Trustee is not obligated to take any action unduly prejudicial to Holders not
joining in such direction or involving the Trustee in personal liability.
(Section 512)
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of its obligations under each Indenture and as
to any default in such performance. (Section 1007)
Defeasance. If so specified with respect to any particular series of Debt
Securities issued under an Indenture, the Company may discharge its indebtedness
and its obligations or certain of its obligations under such Indenture with
respect to such series by depositing funds or obligations issued or guaranteed
by the United State of America with the Trustee. (Sections 1301-1303)
Defeasance and Discharge. Each Indenture provides that, if so specified
with respect to the Debt Securities of any series issued under such Indenture
(other than convertible Subordinated Debt Securities), the Company will be
discharged from any and all obligations in respect of the Debt Securities of
such series (except for certain obligations relating to temporary Debt
Securities and exchange of Debt Securities, registration of transfer or exchange
of Debt Securities of such series, replacement of stolen, lost or mutilated Debt
Securities of such series, maintenance of paying agencies to hold moneys for
payment in trust and payment of additional amounts, if any, required in
consequence of United States withholding taxes imposed on payments to non-United
States persons) upon the deposit with the Trustee, in trust, of money and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any), and each
installment of interest on, the Debt Securities of such series on the Stated
Maturity of such payments in accordance with the terms of such Indenture and the
Debt Securities of such series. (Sections 1302, 1304) Such a trust may only be
established if, among other things, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of such Indenture there has been a change in applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge, and will be subject to federal income
tax on the same amounts and in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge had not occurred.
(Section 1304) In the event of any such defeasance and discharge of Debt
Securities of such series, Holders of such series would be entitled to look only
to such trust fund for payment of principal of and any premium and any interest
on their Debt Securities until Maturity.
Covenant Defeasance. Each Indenture also provides that, if so specified
with respect to the Debt Securities of any series issued thereunder, the Company
may omit to comply with certain restrictive covenants, including (in the case of
the Senior Debt Indenture) the covenant described under "Limitation on Liens"
below, but excluding (in the case of the Subordinated Debt Indenture) any
applicable obligation of the Company respecting the conversion of Debt
Securities of such series into Common Stock, and any such omission shall not be
an Event of Default with respect to the Debt Securities of such series, upon the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any), and each installment of interest on, the
Debt Securities of such series on the Stated Maturity of such payments in
accordance with the terms of such Indenture and the Debt Securities of such
series. The obligations of the Company under such Indenture and the Debt
Securities of such series other than with respect to such covenants shall remain
in full force and effect. (Section 1303) Such a trust may be established only
if, among other things, the Company has delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amounts and in the same manner and at the same time as would have been
the case if such deposit and defeasance had not occurred. (Section 1304)
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Although the amount of money and U.S. Government Obligations on deposit
with the Trustee would be intended to be sufficient to pay amounts due on the
Debt Securities of such series at the time of their Stated Maturity, in the
event the Company exercises its option to omit compliance with the covenants
defeased with respect to the Debt Securities of any series as described above,
and the Debt Securities of such series are declared due and payable because of
the occurrence of any Event of Default, such amount may not be sufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. The Company shall in any
event remain liable for such payments as provided in the applicable Indenture.
Federal Income Tax Consequences. Under current United States federal income
tax law, defeasance and discharge would likely be treated as a taxable exchange
of Debt Securities to be defeased for an interest in the defeasance trust. As a
consequence, a holder would recognize gain or loss equal to the difference
between the holder's cost or other tax basis for such Debt Securities and the
value of the holder's interest in the defeasance trust, and thereafter would be
required to include in income the holder's share of the income, gain or loss of
the defeasance trust. Under current United States federal income tax law,
covenant defeasance would ordinarily not be treated as a taxable exchange of
such Debt Securities.
Meetings, Modification and Waiver. Modifications and amendments of either
Indenture may be made by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series affected by such modification or amendment; provided,
however, that no such modification or amendment may, without consent of the
Holder of each Outstanding Security affected thereby, (a) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Debt Security, (b) change the Redemption Date with respect to any Debt
Security, (c) reduce the principal amount of, or premium or interest on, any
Debt Security, (d) change any obligation of the Company to pay additional
amounts, (e) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof, (f) change the coin
or currency in which any Debt Security or any premium or interest thereon is
payable, (g) change the redemption right of any Holder, (h) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security or any conversion right with respect thereto, (i) reduce the percentage
in principal amount of Outstanding Securities of any series, the consent of
whose Holders is required for modification or amendment of such Indenture or for
waiver of compliance with certain provisions of such Indenture or for waiver of
certain defaults, (j) reduce the requirements contained in such Indenture for
quorum or voting, (k) change any obligation of the Company to maintain an office
or agency in the places and for the purposes required by such Indenture, (l)
adversely affect the right to convert Subordinated Debt Securities, if
applicable, or (l) modify any of the above provisions. (Section 902)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Subordinated Debt Securities without the
consent of each holder of Senior Indebtedness (as defined below under
"-- Provisions Applicable Solely to Subordinated Debt Securities") then
outstanding that would be adversely affected thereby. (Section 907 of the
Subordinated Debt Indenture)
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of all Holders of that series, waive,
insofar as that series is concerned, compliance by the Company with certain
restrictive provisions of the Indenture under which such series has been issued.
(Section 1008) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of each series may, on behalf of all Holders of that
series, waive any past default under the applicable Indenture with respect to
any Debt Securities of that series, except a default (a) in the payment of
principal of, or premium, if any, or any interest on any Debt Security of such
series or (b) in respect of a covenant or provision of such Indenture which
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected. (Section 513)
Each Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver thereunder or are
present at a meeting of the Holders for quorum purposes, (i) the principal
amount of an Original Issue Discount Security that is deemed to be Outstanding
will be the amount of the principal that
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would be due and payable as of the date of such determination upon acceleration
of the Maturity thereof, and (ii) the principal amount of a Debt Security
denominated in a foreign currency or currency units will be the U.S. dollar
equivalent, determined on the date of original issuance of such Debt Security,
of the principal amount of such Debt Security or, in the case of an Original
issue Discount Security, the U.S. dollar equivalent, determined on the date of
original issuance of such Security, of the amount determined as provided in (i)
above. (Section 101)
Each Indenture contains provisions for convening meetings of the Holders of
a series if Debt Securities of that series are issuable as Bearer Securities.
(Section 1401) A meeting may be called at any time by the Trustee, and also,
upon request, by the Company or the Holders of at least 10% in aggregate
principal amount of the Outstanding Securities of such series, in any such case
upon notice given in accordance with "Notices" below. (Section 1402) Except for
any consent which must be given by the Holder of each Outstanding Security
affected thereby, as described above, any resolution presented at a meeting (or
adjourned meeting at which a quorum is present) may be adopted by the
affirmative vote of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of that series; provided, however, that any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in aggregate
principal amount of the Outstanding Securities of a series may be adopted at a
meeting (or adjourned meeting duly reconvened at which a quorum is present) by
the affirmative vote of the Holders of such specified percentage in aggregate
principal amount of the Outstanding Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of any series duly held in
accordance with the applicable Indenture will be binding on all Holders of that
series and related coupons. The quorum at any meeting, and at any reconvened
meeting, will be Persons holding or representing a majority in aggregate
principal amount of the Outstanding Securities of a series. (Section 1404)
Consolidation, Merger and Sale of Assets. The Company, without the consent
of the Holders of any of the outstanding Securities under either Indenture, may
consolidate with or merge into, or convey, transfer or lease its assets
substantially as an entirety to, any Person which is a corporation, partnership
or trust organized and validly existing under the laws of any domestic
jurisdiction, provided that any successor Person assumes the Company's
obligations on the Securities and under such Indenture, that after giving effect
to the transaction no Event of Default, and no event which, after notice or
lapse of time, would become an Event of Default, shall have occurred and be
continuing, and that certain other conditions are met. (Section 801)
Notices. Except as otherwise provided in the Indentures, notices to Holders
of Bearer Securities will be given by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such Bearer Securities. Notices to Holders of Registered Securities
will be given by mail to the addresses of such Holders as they appear in the
Security Register. (Section 106)
Title. Title to any Bearer Securities (including Bearer Securities in
permanent global form) and any coupons appertaining thereto will pass by
delivery. The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon and the
registered owner of any Registered Security as the owner thereof (whether or not
such Debt Security or coupon shall be overdue and notwithstanding any notice to
the contrary) for the purpose of making payment and for all other purposes.
(Section 308)
Replacement of Securities and Coupons. Any mutilated Debt Security or a
Debt Security with a mutilated coupon appertaining thereto will be replaced by
the Company at the expense of the Holder upon surrender of such Debt Security to
the Trustee. Debt Securities or coupons that became destroyed, stolen or lost
will be replaced by the Company at the expense of the Holder upon delivery to
the Trustee of the Debt Security and coupons or evidence of destruction, loss or
theft thereof satisfactory to the Company and the Trustee; in the case of any
coupon which becomes destroyed, stolen or lost, such coupon will be replaced by
issuance of a new Debt Security in exchange for the Debt Security to which such
coupon appertains. In the case of a destroyed, lost or stolen Debt Security or
coupon, an indemnity satisfactory to the Trustee and the Company may be required
at the expense of the Holder of such Debt Security or coupon before a
replacement Debt Security will be issued. (Section 306)
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Governing Law. The Indentures, the Debt Securities and coupons will be
governed by, and construed in accordance with, the laws of the State of New
York. (Section 113)
Regarding the Trustee. First Trust of Illinois, National Association, the
Trustee under each Indenture, is also trustee under another indenture under
which several issues of the Company's debt securities are outstanding.
Each Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee is
permitted to engage in certain other transactions; however, if it acquires any
conflicting interest (as described in the Indentures), it must eliminate such
conflict or resign. (Section 608)
Pursuant to the Trust Indenture Act of 1939, as amended, should a default
occur with respect to either the Senior Debt Securities or the Subordinated Debt
Securities, First Trust of Illinois, National Association would be required to
resign as Trustee under one of the Indentures within 90 days of such default
unless such default were cured, duly waived or otherwise eliminated.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
General. Senior Debt Securities will be issued under the Senior Debt
Indenture, and each series will rank pari passu as to the right of payment of
principal and any premium and interest with each other series issued thereunder
and will rank senior to all series of Subordinated Debt Securities that may be
issued.
Certain Definitions. For purposes of the following discussion, the
following definitions are applicable (Section 101 of the Senior Debt Indenture).
"Net Tangible Assets" means the total amount of assets appearing on a
consolidated balance sheet of the Company and its Subsidiaries less, without
duplication: (a) total current liabilities (excluding current maturities of
long-term debt and preferred stock); (b) all reserves for depreciation and other
asset valuation reserves but excluding reserves for deferred federal and state
income taxes; (c) all intangible assets such as goodwill, trademarks, trade
names, patents and unamortized debt discount and expense carried as an asset and
(d) all appropriate adjustments on account of minority interests of other
Persons holding common stock in any Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Principal Property" means any natural gas pipeline, natural gas
distribution system, natural gas gathering system or natural gas storage
facility located in the United States, except any such property that in the
opinion of the Board of Directors is not of material importance to the business
conducted by the Company and its consolidated Subsidiaries taken as a whole.
"Principal Subsidiary" means any Subsidiary which owns a Principal
Property.
"Subsidiary" means a corporation more than 50% of the outstanding stock of
which is owned, directly or indirectly, by the Company or by one or more
Subsidiaries, or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
Limitation on Liens. The Company covenants in the Senior Debt Indenture
that it will not, nor will it permit any Subsidiary to, issue, assume or
guarantee any debt for money borrowed ("Debt") if such Debt is secured by a
mortgage, pledge, security interest or lien (a "mortgage" or "mortgages") upon
any Principal Property of the Company or any Principal Subsidiary or upon any
shares of stock or indebtedness of any Principal Subsidiary (whether such
Principal Property, shares or indebtedness was owned on the date of the Senior
Debt Indenture or thereafter acquired) without in any such case effectively
providing that the Senior Debt Securities shall be secured equally and ratably
with (or prior to) such Debt, except that the foregoing
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restrictions shall not apply to: (a) mortgages on any property acquired,
constructed or improved by the Company or any Principal Subsidiary after the
date of the Senior Debt Indenture which are created within 180 days after such
acquisition (or in the case of property constructed or improved, after the
completion and commencement of commercial operation of such property, whichever
is later) to secure or provide for the payment of the purchase price or cost
thereof, provided that in the case of such construction or improvement the
mortgages shall not apply to any property theretofore owned by the Company or
any Subsidiary other than theretofore unimproved real property; (b) existing
mortgages on property acquired (including mortgages on any property acquired
from a Person which is consolidated with or merged with or into the Company or a
Subsidiary) or mortgages outstanding at the time any corporation becomes a
Subsidiary; (c) mortgages in favor of domestic or foreign governmental bodies to
secure advances or other payments pursuant to any contract or statute or to
secure indebtedness incurred to finance the purchase price or cost of
constructing or improving the property subject to such mortgages, including
mortgages to secure Debt of the pollution control or industrial revenue bond
type; (d) mortgages in favor of the Company or any Principal Subsidiary; or (e)
any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any mortgage referred to in any of the
foregoing clauses (a)-(d). (Section 1006 of the Senior Debt Indenture)
Notwithstanding the foregoing, the Company and any Subsidiary may, without
securing the Senior Debt Securities, issue, assume or guarantee secured Debt
(which would otherwise be subject to the foregoing restrictions) in an aggregate
amount which, together with all other such Debt, does not exceed 10% of the Net
Tangible Assets, as shown on a consolidated balance sheet as of a date not more
than 90 days prior to the proposed transaction prepared by the Company in
accordance with generally accepted accounting principles. (Section 1006 of the
Senior Debt Indenture)
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
Subordination. The Subordinated Debt Securities will be subordinate and
junior in right of payment, to the extent set forth in the Subordinated Debt
Indenture, to all Senior Indebtedness (as defined below) of the Company. If the
Company should default in the payment of any principal of or premium or interest
on any Senior Indebtedness when the same becomes due and payable, whether at
maturity or a date fixed for prepayment or by declaration of acceleration or
otherwise, then, upon written notice of such default to the Company by the
holders of such Senior Indebtedness or any trustee therefor and subject to
certain rights of the Company to dispute such default and subject to proper
notification of the Trustee, unless and until such default has been cured or
waived or ceases to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) will be made or agreed to be made for
principal of, premium, if any, or interest, if any, on the Subordinated Debt
Securities, or in respect of any redemption, retirement, purchase or other
acquisition of the Subordinated Debt Securities other than those made in capital
stock of the Company (or cash in lieu of fractional shares thereof) pursuant to
any conversion right of the Subordinated Debt Securities or otherwise made in
capital stock of the Company. (Sections 1601, 1604 and 1605 of the Subordinated
Debt Indenture)
"Senior Indebtedness" is defined in Section 101 of the Subordinated Debt
Indenture as Indebtedness (as defined below) of the Company outstanding at any
time except (a) any Indebtedness as to which, by the terms of the instrument
creating or evidencing the same, it is provided that such Indebtedness is not
senior in right of payment to the Subordinated Debt Securities, (b) the
Subordinated Debt Securities, (c) any Indebtedness of the Company to a
wholly-owned Subsidiary of the Company, (d) interest accruing after the filing
of a petition initiating certain bankruptcy or insolvency proceedings unless
such interest is an allowed claim enforceable against the Company in a
proceeding under federal or state bankruptcy laws and (e) trade accounts
payable. "Indebtedness" is defined in Section 101 of the Subordinated Debt
Indenture as, with respect to any Person, (a) (i) the principal of and premium
and interest, if any, on indebtedness for money borrowed of such Person
evidenced by bonds, notes, debentures or similar obligations, including any
guaranty by such Person of any indebtedness for money borrowed of any other
Person, whether any such indebtedness or guaranty is outstanding on the date of
the Subordinated Debt Indenture or is thereafter created, assumed or incurred,
(ii) the principal of and premium and interest, if any, on indebtedness for
money borrowed, incurred,
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assumed or guaranteed by such Person in connection with the acquisition by it or
any of its subsidiaries of any other business, properties or other assets and
(iii) lease obligations which such Person capitalizes in accordance with
Statement of Financial Accounting Standards No. 13 promulgated by the Financial
Accounting Standards Board or such other generally accepted accounting
principles as may be from time to time in effect, (b) any other indebtedness of
such Person, including any indebtedness representing the balance deferred and
unpaid of the purchase price of any property or interest therein, including any
such balance that constitutes a trade account payable, and any guaranty,
endorsement or other contingent obligation of such Person in respect of any
indebtedness of another, which is outstanding on the date of the Subordinated
Debt Indenture or is thereafter created, assumed or incurred by such Person and
(c) any amendments, modifications, refundings, renewals or extensions of any
indebtedness or obligation described as Indebtedness in clause (a) or (b) above.
If (i) without the consent of the Company a court shall enter (A) an order
for relief with respect to the Company under the United States federal
bankruptcy laws, (B) a judgment, order or decree adjudging the Company a
bankrupt or insolvent, or (C) an order for relief for reorganization,
arrangement, adjustment or composition of or in respect of the Company under the
United States federal bankruptcy laws or state insolvency laws or (ii) the
Company shall institute proceedings for the entry of an order for relief with
respect to the Company under the United States federal bankruptcy laws or for an
adjudication of insolvency, or shall consent to the institution of bankruptcy or
insolvency proceedings against it, or shall file a petition seeking, or seek or
consent to reorganization, arrangement, composition or similar relief under any
applicable law, or shall consent to the filing of such petition or to the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official in respect of the Company or of substantially
all of its property, or the Company shall make a general assignment for the
benefit of creditors, then all Senior Indebtedness (including any interest
thereon accruing after the commencement of any such proceedings) will first be
paid in full before any payment or distribution, whether in cash, securities or
other property, is made on account of the principal of, premium, if any, or
interest, if any, on the Subordinated Debt Securities. In such event, any
payment or distribution on account of the principal of, premium, if any, or
interest, if any, on the Subordinated Debt Securities, whether in cash,
securities or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in the subordination
provisions with respect to the Subordinated Debt Securities, to the payment of
all Senior Indebtedness then outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), which would
otherwise (but for the subordination provisions) be payable or deliverable in
respect of the Subordinated Debt Securities will be paid or delivered directly
to the holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings) has
been paid in full. If any payment or distribution on account of the principal
of, premium, if any, or interest, if any, on the Subordinated Debt Securities of
any character, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Debt Securities, to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the Trustee or any
holder of any Subordinated Debt Securities in contravention of any of the terms
of the Subordinated Debt Indenture, such payment or distribution will be
received in trust for the benefit of, and will be paid over or delivered and
transferred to, the holders of the Senior Indebtedness then outstanding in
accordance with the priorities then existing among such holders for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all such Senior Indebtedness in full. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness, the holders of Subordinated Debt Securities, together with the
holders of any obligations of the Company ranking on a parity with the
Subordinated Debt Securities, will be entitled to be repaid from the remaining
assets of the Company the amounts at that time due and owing on account of
unpaid principal of or any premium or interest on the Subordinated Debt
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall
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be made on account of any capital stock or obligations of the Company ranking
junior to the Subordinated Debt Securities and such other obligations. (Section
1601 of the Subordinated Debt Indenture)
The Prospectus Supplement respecting any series of Subordinated Debt
Securities will set forth any subordination provisions applicable to such series
in addition to or different from those described above.
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Indebtedness and holders of other obligations of the
Company that are not subordinated to Senior Indebtedness may receive more,
ratably, than holders of the Subordinated Debt Securities. Such subordination
will not prevent the occurrence of an Event of Default or limit the right of
acceleration in respect of the Subordinated Debt Securities.
Conversion. The Subordinated Debt Indenture may provide for a right of
conversion of Subordinated Debt Securities into Common Stock (or cash in lieu
thereof). (Sections 301 and 1501 of the Subordinated Debt Indenture) The
following provisions will apply to Debt Securities that are convertible
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Debt Securities.
The holder of any convertible Subordinated Debt Securities will have the
right exercisable at any time prior to maturity, unless previously redeemed or
otherwise purchased by the Company, to convert such Subordinated Debt Securities
into shares of Common Stock at the conversion price or conversion rate set forth
in the Prospectus Supplement, subject to adjustment. (Section 1502 of the
Subordinated Debt Indenture) The holder of convertible Subordinated Debt
Securities may convert any portion thereof which is $1,000 in principal amount
or any integral multiple thereof. (Section 1502 of the Subordinated Debt
Indenture)
In certain events, the conversion price or conversion rate will be subject
to adjustment as set forth in the Subordinated Debt Indenture. Such events
include the issuance of shares of Common Stock of the Company as a dividend or
distribution on the Common Stock; subdivisions, combinations and
reclassifications of the Common Stock; the issuance to all holders of Common
Stock of rights or warrants entitling the holders thereof (for a period not
exceeding 45 days) to subscribe for or purchase shares of Common Stock at a
price per share less than the then current market price per share of Common
Stock (as determined pursuant to the Subordinated Debt Indenture); and the
distribution to substantially all holders of Common Stock of evidences of
indebtedness, equity securities (including equity interests in the Company's
Subsidiaries) other than Common Stock, or other assets (excluding cash dividends
paid from surplus) or subscription rights or warrants (other than those referred
to above). No adjustment of the conversion price or conversion rate will be
required unless an adjustment would require a cumulative increase or decrease of
at least 1% in such price or rate. (Section 1504 of the Subordinated Debt
Indenture) The Company has been advised by its counsel, Vinson & Elkins L.L.P.,
that certain adjustments in the conversion price or conversion rate in
accordance with the foregoing provisions may result in constructive
distributions to either holders of the Subordinated Debt Securities or holders
of Common Stock which would be taxable pursuant to Treasury Regulations issued
under section 305 of the Internal Revenue Code of 1986, as amended. The amount
of any such taxable constructive distribution would be the fair market value of
the Common Stock which is treated as having been constructively received, such
value being determined as of the time the adjustment resulting in the
constructive distribution is made.
Fractional shares of Common Stock will not be issued upon conversion, but,
in lieu thereof, the Company will pay a cash adjustment based on the then
current market price for the Common Stock. (Section 1503 of the Subordinated
Debt Indenture) Upon conversion, no adjustments will be made for accrued
interest or dividends, and therefore convertible Subordinated Debt Securities
surrendered for conversion between the record date for an interest payment and
the interest payment date (except convertible Subordinated Debt Securities
called for redemption on a redemption date during such period) must be
accompanied by payment of an amount equal to the interest thereon which the
registered holder is to receive. (Sections 1504 and 1502 of the Subordinated
Debt Indenture)
In the case of any consolidation or merger of the Company (with certain
exceptions) or any conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety to any Person, each
14
<PAGE> 16
holder of convertible Subordinated Debt Securities, after the consolidation,
merger, conveyance, transfer or lease, will have the right to convert such
convertible Subordinated Debt Securities only into the kind and amount of
securities, cash and other property which the holder would have been entitled to
receive upon or in connection with such consolidation, merger, conveyance,
transfer or lease, if the holder had held the Common Stock issuable upon
conversion of such convertible Subordinated Debt Securities immediately prior to
such consolidation, merger, conveyance, transfer or lease. (Section 1505 of the
Subordinated Debt Indenture)
DESCRIPTION OF CAPITAL STOCK
GENERAL
K N is currently authorized by its Restated Articles of Incorporation, as
amended (the "K N Charter") to issue 50,000,000 shares of Common Stock, of which
28,398,165 were outstanding on April 30, 1996; 200,000 shares of Class A
Preferred Stock, no par value ("Class A Preferred Stock"), of which 70,000
shares were outstanding as Class A $5.00 Cumulative Preferred Stock on such
date; and 2,000,000 shares of Class B Preferred Stock, no par value ("Class B
Preferred Stock"), of which 5,720 shares were outstanding as Class B $8.30
Series Cumulative Preferred Stock on such date.
The Board of Directors of K N is authorized by the K N Charter to provide,
without further stockholder action, for the issuance of one or more series of
Class A Preferred Stock and Class B Preferred Stock. The Board of Directors has
the power to fix various terms with respect to each such series, including
voting power, designations, preferences, dividend rates, conversion and exchange
provisions, redemption provisions and, in the case of the Class B Preferred
Stock, the amounts which holders are entitled to receive upon any liquidation,
dissolution or winding up of K N. Class A Preferred Stock and Class B Preferred
Stock will rank prior to the Common Stock with respect to both dividends and
distribution of assets on liquidation, dissolution or winding up of K N.
In the event of any liquidation, dissolution or winding up of K N, whether
voluntary or involuntary, the holders of shares of Class A Preferred Stock of
each series shall be entitled to receive in full out of the assets of K N the
sum of $100 per share of Class A Preferred Stock, plus any arrearages in
dividends thereon to the date fixed for the payment in liquidation, before any
distribution shall be made to the holders of shares of any stock junior to the
Class A Preferred Stock. K N may, at the option of the Board of Directors,
redeem the whole or any part of the Class A Preferred Stock, or of any series
thereof at any time or from time to time within the period during which such
stock is, according to the K N Charter, or the resolutions of the Board of
Directors providing for the issue thereof, redeemable, by paying the redemption
price thereof, including any arrearages in dividends thereon to the date fixed
for redemption. The Class A $5.00 Cumulative Preferred Stock is redeemable at
the price of $105 per share plus accrued and unpaid dividends. Holders of shares
of Class A $5.00 Cumulative Preferred Stock are entitled to receive, when and as
declared by the Board of Directors of K N, cumulative preferential cash
dividends at the annual rate of $5.00 per share prior to the payment of any
dividends or other distributions on (or purchase or redemption of) the Class B
Preferred Stock or the Common Stock.
In the event of any liquidation, dissolution or winding up of K N, whether
voluntary or involuntary, the holders of shares of Class B Preferred Stock of
each series shall be entitled to receive, subject to the prior rights of the
holders of shares of Class A Preferred Stock, the full preferential amount fixed
by the K N Charter, or the resolutions of the Board of Directors providing for
the issue thereof, including any arrearages in dividends thereon to the date
fixed for the payment in liquidation, before any distribution shall be made to
the holders of shares of any stock junior to the Class B Preferred Stock.
K N is required to redeem (at $100 per share, plus accrued and unpaid
dividends) 5,714 shares of the Class B $8.30 Series Cumulative Preferred Stock
on January 1, 1997 and the remaining 6 shares on January 1, 1998. At the option
of K N, this series of Preferred Stock is redeemable, in whole or in part, at
$100.87 per share, plus accrued and unpaid dividends, prior to January 2, 1997
and 5,714 shares of the series may be redeemed on January 1, 1997 at $100 per
share, plus accrued and unpaid dividends. Upon liquidation, dissolution or
winding up of K N, the holders of such series are entitled to receive (subject
to the prior rights
15
<PAGE> 17
of the holders of shares of Class A Preferred Stock) $100 plus accrued and
unpaid dividends for each such share then outstanding, before any distribution
is made on the Common Stock. Holders of shares of Class B $8.30 Series
Cumulative Preferred Stock are entitled to receive, when and as declared by the
Board of Directors of K N, cumulative preferential cash dividends at the annual
rate of $8.30 per share prior to the payment of any dividends or other
distributions on (or purchase or redemption of) the Common Stock. Dividends may
not be declared or paid or set apart for payment on any series of Class B
Preferred Stock, unless there shall be no arrearages in dividends on any series
of Class A Preferred Stock entitled to cumulative dividends for any past
dividend period and dividends in full for the current dividend period have been
paid or declared or set aside for payment on all Class A Preferred Stock.
In addition, the holders of the Class A Preferred Stock then outstanding
have the right to vote separately as a class with respect to (i) certain
amendments to the K N Charter or the By-laws of K N which adversely affect the
voting powers, rights or preferences of the holders of shares of Class A
Preferred Stock, (ii) the creation of any class of stock or any security
convertible into or exchangeable for or evidencing the right to purchase any
stock ranking prior to or on a parity with, either as to dividends or upon
liquidation, the Class A Preferred Stock, or (iii) certain mergers or
consolidations of K N with or into any other corporation. For such actions to be
taken by K N, including increasing the authorized amount of any class of stock
ranking prior to the Class A Preferred Stock, the affirmative vote of the
holders of at least 50% of the shares of the Class A Preferred Stock then
outstanding would be required. The affirmative vote of at least 50% of the
shares of any series of Class A Preferred Stock then outstanding is required for
K N to amend the K N Charter or resolutions of the Board of Directors of K N
providing for the issue of such series of Class A Preferred Stock so as to
affect adversely the powers, preferences or rights of holders of Class A
Preferred Stock of such series. The holders of Class B Preferred Stock then
outstanding also have the right to a separate vote regarding (a) the events
described in the first sentence of this paragraph with regard to such Class B
Preferred Stock, requiring the affirmative vote of at least 50% of the shares of
Class B Preferred Stock then outstanding, and (b) amendments to the K N Charter,
or to resolutions of K N's Board of Directors providing for the issue of any
series of Class B Preferred Stock so as to affect adversely the powers,
preferences or rights of the holders of such series, requiring the affirmative
vote of at least 50% of the shares of such series then outstanding.
Without the affirmative vote or consent of the holders of all Class B $8.30
Series Cumulative Preferred Stock at the time outstanding, voting or consenting
separately as a series, K N is not permitted to (i) issue or reissue any shares
of Class A Preferred Stock (other than for purposes of exchanges or transfers)
in excess of the first 195,000 shares of Class A Preferred Stock authorized and
issued, or (ii) increase above 120,000 the aggregate number of shares
constituting the Class B $8.30 Series Cumulative Preferred Stock authorized for
issuance, or issue or reissue any shares of such series (other than for purposes
of exchanges or transfers) in excess of the first 120,000 shares authorized and
issued.
If dividends are in arrears on the shares of any series of Class A
Preferred Stock to which the following provisions are made applicable pursuant
to the K N Charter or resolutions of K N's Board of Directors providing for the
issue of any such series (i) in an aggregate amount equal to three but less than
six full quarterly dividends, then the holders of the shares of all such series
of Class A Preferred Stock have the exclusive right, voting separately as a
class and without regard to series, to elect directors constituting one-third of
K N's Board of Directors or (ii) in an aggregate amount equal to six full
quarterly dividends, then such holders have the exclusive right, voting
separately as a class and without regard to series, to elect directors
constituting one-half of K N's Board of Directors plus one additional director,
in each case until all arrearages in dividends and dividends in full for the
current quarterly period have been paid on or declared and set aside for payment
on the shares of such series. These provisions are applicable to the Class A
$5.00 Cumulative Preferred Stock. The holders of the outstanding Class B $8.30
Series Cumulative Preferred Stock have the right to elect directors of K N
similar to the Class A $5.00 Cumulative Preferred Stock in the event of
non-declaration of dividends, for the periods described above, on the Class B
$8.30 Series Cumulative Preferred Stock if the holders of the Class A $5.00
Cumulative Preferred Stock are not then entitled to elect directors as described
above.
All outstanding shares of Common Stock are, and any shares of Common Stock
newly issued under any Prospectus Supplement will be, validly issued, fully paid
and nonassessable. Holders of K N Common Stock,
16
<PAGE> 18
Class A $5.00 Cumulative Preferred Stock and Class B $8.30 Series Cumulative
Preferred Stock are entitled to one vote for each share on all matters voted on
by stockholders. Holders of Common Stock, Class A Preferred Stock and Class B
Preferred Stock have no preemptive rights to subscribe for or purchase any
additional securities issued by K N. Subject to the preferential rights of the
holders of the Class A Preferred Stock and Class B Preferred Stock, the holders
of Common Stock are entitled to receive any dividends which may be declared by
the Board of Directors out of funds legally available therefor and to share pro
rata in the net assets of K N upon liquidation, dissolution or winding up.
Shares of Common Stock have no cumulative voting rights or redemption, sinking
fund or conversion privileges.
ANTI-TAKEOVER MATTERS
Charter and Bylaws Certain provisions of the K N Charter and the By-laws of
K N could have the effect of preventing a change in control of K N in certain
situations. These provisions generally provide for (a) the classification of the
Board of Directors of K N into three classes of as nearly an equal number as
possible, having staggered terms of three years each; (b) the removal of
directors only for cause or by unanimous vote of the remaining members of the
Board of Directors; (c) the filling of any vacancy on the Board of Directors by
the remaining directors then in office; (d) the limitation of the number of
directors to a minimum of nine and a maximum of 15, with the exact number to be
determined by the Board of Directors; (e) increasing the stockholder vote
required to amend, repeal or adopt any provision inconsistent with the foregoing
provisions under (a), (b) and (d) above to two-thirds of the outstanding voting
securities of K N; (f) the requirement that certain business combinations or
transactions involving K N and any beneficial owner of more than 5% of the
outstanding voting securities of K N be approved by holders of at least
two-thirds of the outstanding voting securities of K N, including those held by
such beneficial owner, unless the business combination or transaction is (I)
approved by the Board of Directors before such beneficial owner became a holder
of more than 5% of K N's outstanding voting securities or (II) approved by
sufficient members of the Board of Directors to constitute a majority of the
members of the full Board of Directors in office prior to the time such
beneficial owner became a holder of more than 5% of K N's voting securities, or
(III) with an entity of which a majority of the outstanding shares of voting
securities is owned by K N and its subsidiaries; (g) increasing the stockholder
vote required to amend, repeal or adopt any provision inconsistent with the
foregoing provision under (f) above to two-thirds or more of the then
outstanding shares of voting securities of K N; (h) the requirement that certain
business combinations or transactions involving K N and any beneficial owner of
10% or more of the outstanding voting securities of K N be approved by holders
of at least 80% of the outstanding voting securities of K N, including those
held by such beneficial owner, unless (I) the business combination or
transaction is approved by three-fourths of the Board of Directors then in
office who are not associated with or related to anyone who beneficially owns,
and do not themselves own, 10 percent or more of K N's voting securities or (II)
certain conditions relating generally to the fairness of the price to be
received by stockholders of K N in such business combination or transaction are
satisfied; (i) increasing the stockholder vote required to amend, repeal or
adopt any provision inconsistent with the foregoing provision under (h) above to
80% or more of the outstanding voting securities of K N unless approved by an
affirmative vote of three-fourths of the Board of Directors then in office who
are not associated with or related to anyone who beneficially owns, and do not
themselves own, 10% or more of K N's voting securities; (j) certain procedural
requirements for stockholder nominations to the Board of Directors; and (k) the
requirement that special meetings of stockholders may only be called by
stockholders owning 51% or more of the outstanding voting securities of K N, by
a majority of the Board of Directors, the Chairman of the Board of Directors or
the President of K N.
Shareholder Rights Plan. On August 17, 1995, the Board of Directors of K N
declared a dividend of one preferred share purchase right (a "Right") with
respect to each outstanding share of Common Stock held of record on September
15, 1995 or issued thereafter and prior to the date the Rights become
exercisable. Until the Rights become exercisable, they will be evidenced by
certificates for shares of Common Stock and will automatically trade with the
Common Stock. If and when the Rights become exercisable, Rights certificates
will be distributed and the Rights will become separately tradable. The full
terms of the Rights are set forth in the Rights Agreement dated as of August 21,
1995, between the Company and The Bank of New York, as Rights Agent, a copy of
which is filed as an exhibit to the Registration Statement.
17
<PAGE> 19
Each Right entitles the holder thereof to purchase from the Company one
one-thousandth of a share of Class B Junior Participating Series Preferred
Stock, without par value (the "Preferred Shares"), for a price of $80 per one
one-thousandth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The Rights become exercisable upon the earlier of (i) ten business
days following a public announcement that a person or group of affiliated or
associated persons has acquired beneficial ownership of 20% or more of the
outstanding voting shares of the Company of (ii) ten business days following the
commencement or announcement of an intention to commence a tender or exchange
offer the consummation of which would result in the beneficial ownership by a
person or group of 20% or more of the outstanding voting shares of the Company.
The Rights will expire on the later of September 15, 2005 or the third
anniversary of the date on which the Rights became exercisable (the "Final
Expiration Date"), unless the Final Expiration Date is extended or the Rights
are earlier redeemed or exchanged by the Company as described below.
If a person or group were to acquire 20% or more of the voting shares of
the Company, each Right then outstanding (other than Rights beneficially owned
by the acquiring person, which would become null and void) would become a right
to buy that number of shares of Common Stock (or, under certain circumstances,
the equivalent number of one one-thousandths of a Preferred Share) that at the
time of such acquisition would have a market value of two times the Purchase
Price of the Right. If the Company were acquired in a merger or other business
combination transaction or more than 50% of its consolidated assets or earning
power were sold, proper provision will be made so that holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the Purchase Price of the Right.
At any time after the acquisition by a person or group of beneficial
ownership of 20% or more of the outstanding voting shares of the Company and
before the acquisition by a person or group of 50% or more of the outstanding
voting shares of the Company, the Board of Directors may, at its option, issue
shares of Common Stock (or Preferred Shares) in mandatory redemption of, and in
exchange for, all or part of the then outstanding and exercisable Rights (other
than Rights owned by such person or group, which would become null and void) at
an exchange ratio of one share of Common Stock (or one one-thousandth of a
Preferred Share) for each Right, subject to adjustment. In addition, the Company
is entitled to redeem all of the outstanding Rights at a price of $0.01 per
Right at any time prior to the first public announcement that a person or group
has become the beneficial owner of 20% or more of the outstanding voting shares
of the Company.
Until a Right is exercised, the holder thereof, as such, has no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
KANSAS BUSINESS COMBINATION ACT
K N is subject to Sections 17-12,100 et seq. of the Kansas Statutes
Annotated (the "K.S.A."), which imposes a three-year moratorium on business
combinations between a Kansas corporation and an "interested stockholder" (in
general, a stockholder owning 15% or more of a corporation's outstanding voting
stock) or an affiliate or associate thereof unless (a) prior to an interested
stockholder becoming such, the board of directors of the corporation has
approved either the business combination or the transaction by which the
interested stockholder became such; (b) upon consummation of the transaction
resulting in an interested stockholder becoming such, the interested stockholder
owns 85% of the voting stock that was outstanding at the time the transaction
commenced (excluding, from the calculation of outstanding shares, shares
beneficially owned by management, directors and certain employees stock plans);
or (c) on or after the date an interested stockholder becomes such, the business
combination is approved by (i) the Board of Directors and (ii) the affirmative
vote of the holders of at least 66 2/3% of the outstanding shares (other than
those shares beneficially owned by the interested stockholder) at a meeting of
stockholders.
18
<PAGE> 20
KANSAS CONTROL SHARE ACQUISITIONS ACT
K N is also subject to Sections 17-1286 et seq. of the K.S.A. (the "Kansas
Control Share Acquisitions Act"), which applies to public corporations
incorporated in Kansas that have certain other connections with the state. The
Kansas Control Share Acquisitions Act relates principally to the acquisition of
"control shares" in such a corporation. Under the Kansas Control Share
Acquisitions Act, a control share acquisition is one that, except for the
operation of the Act, would raise the acquiring person's voting power in the
election of directors of the subject corporation to or above any of three
thresholds: one-fifth or more but less than one-third of all voting power;
one-third or more but less than a majority of all voting power; and at least a
majority of all voting power. Whenever a control share acquisition occurs, the
acquiring person has no voting rights with respect to those shares unless both a
majority of all outstanding shares and a majority of all such shares excluding
all "interested shares" (in general, shares beneficially controlled by the
acquiring person or any officer or inside director of the subject corporation)
approve the acquisition. If the control shares are accorded voting rights, then
dissenters' rights are available under the Kansas Control Share Acquisitions Act
to stockholders who did not vote in favor of the control share acquisition and
who comply with certain prescribed procedures. If the stockholders vote not to
accord voting rights to the control shares, however, then the issuing
corporation has a 60-day option to redeem all such shares at market value.
OTHER MATTERS
The Bank of New York serves as registrar and transfer agent for the Common
Stock and for the Class A $5.00 Cumulative Preferred Stock. K N serves as
registrar and transfer agent for its Class B $8.30 Series Cumulative Preferred
Stock.
SELLING STOCKHOLDER
The Selling Stockholder is a Delaware corporation having its principal
office in Boston, Massachusetts. On July 13, 1994, K N acquired American Oil and
Gas Corporation ("AOG") in a stock-for-stock merger (the "Merger") accounted for
as a pooling of interests. The Selling Stockholder was the largest stockholder
of AOG prior to the Merger, owning approximately 34.4% of the outstanding shares
of common stock of AOG at the time of the Merger plus warrants to purchase
approximately an additional 5.3% of such shares.
Before its acquisition of AOG, K N had no material relationship with the
Selling Stockholder. Pursuant to its merger agreement with AOG, at the time of
the Merger K N elected a designee of the Selling Stockholder as a non-voting
advisory director of K N, and for so long as the Selling Stockholder continues
to own beneficially at least 10% of K N's voting securities, the Selling
Stockholder will have the right to designate one such advisory director.
Currently, such advisory director is R. Gordon Shearer, President of Cabot LNG
Corporation. If the Selling Stockholder's beneficial ownership in K N is reduced
below 10% but continues over 5%, then the Board of Directors of K N will appoint
the Selling Stockholder's advisory director as a full director with voting
rights, and the Selling Stockholder will be entitled to have one designee for
election to the Board of Directors of K N.
The following table sets forth the number of shares of Common Stock owned
by the Selling Stockholder, the number of such shares being offered for sale by
it, the number of such shares to be owned by the Selling Stockholder after such
sale and the percentage of ownership of the outstanding shares of Common Stock
as of April 30, 1996 represented by the holdings of the Selling Stockholder
after such sale:
<TABLE>
<CAPTION>
SHARES TO PERCENT OF
SHARES BE CLASS TO
SHARES BEING OWNED AFTER BE OWNED
OWNED* SOLD SALE* AFTER SALE*
----------- ----------- ----------- -----------
<S> <C> <C> <C>
4,840,186 500,000 4,340,186 14.9%
</TABLE>
- ---------------
* Includes 642,232 shares of Common Stock underlying currently exercisable
warrants assumed by K N in the Merger.
19
<PAGE> 21
The Prospectus Supplement relating to any Offered Securities being offered
by the Selling Stockholder sets forth the number of shares of Common Stock being
offered for its account as well as the number of such shares and the percentage
of the outstanding Common Stock to be owned by the Selling Stockholder after
completion of the offering.
The Company will bear all of the expenses allocable to any Offered
Securities sold for the Selling Stockholder's account, excluding underwriting
discounts or commission allocable to such Offered Securities, fees and
disbursements of counsel for the Selling Stockholder and any stock transfer
taxes payable by reason of any such sale.
This Prospectus is not the exclusive means for resale of any Common Stock
of the Selling Stockholder registered hereunder. For example, the Selling
Stockholder may also sell Common Stock owned by it pursuant to Rule 144 under
the Securities Act. In addition, the Company has previously registered 1,500,000
shares of Common Stock of the Selling Stockholder for sale by the Selling
Stockholder.
PLAN OF DISTRIBUTION
GENERAL
Both the Company and the Selling Stockholder may sell Securities to or
through underwriters or dealers, and also may sell Securities directly to other
purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company, the Selling Stockholder or purchasers of
Securities for whom they may act as agents in the form of discounts, concessions
or commissions. Underwriters, dealers and agents that participate in the
distribution of Securities may be deemed to be underwriters, and any discounts
or commissions received by them from the Company or the Selling Stockholder, as
the case may be, and any profit on the resale of Securities by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
Any such person who may be deemed to be an underwriter will be identified, and
any such compensation received from the Company or the Selling Stockholder, as
the case may be, will be described, in the Prospectus Supplement.
Debt Securities, when first issued, will have no established trading
market. Any underwriters or agents to or through whom Debt Securities are sold
by the Company for public offering and sale may make a market in such Debt
Securities, but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any Debt Securities.
Under agreements which may be entered into by the Company or the Selling
Stockholder, underwriters, dealers and agents who participate in the
distribution of Securities may be entitled to indemnification by the Company or
the Selling Stockholder, as the case may be, against or contribution toward
certain liabilities, including liabilities under the Securities Act.
DELAYED DELIVERY ARRANGEMENT
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases will be subject to the approval of the
Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Debt Securities shall not at
the time of delivery be prohibited under the laws of any jurisdiction to which
such purchaser is subject. The underwriters and such agents will not have any
responsibility in respect of the validity or performance of such contracts.
20
<PAGE> 22
VALIDITY OF SECURITIES
The validity of the Offered Securities, as well as certain tax matters in
connection therewith, will be passed upon for the Company by Vinson & Elkins
L.L.P., Houston, Texas, who may rely on the opinion of Polsinelli, White,
Vardeman & Shalton, Kansas City, Missouri, as to matters of Kansas law, and will
be passed upon for any agents, dealers or underwriters by counsel named in the
applicable Prospectus Supplement. If the Offered Securities include any Common
Stock of the Selling Stockholder, certain legal matters in connection therewith
will be passed upon for the Selling Stockholder by counsel named in the
applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements of K N Energy, Inc. included in its
Annual Report on Form 10-K for the year ended December 31, 1995, which is
incorporated by reference herein, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said report. Reference is made
to such report, which calls attention to a change in accounting principles for
postemployment benefits effective January 1, 1994.
21
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Company or the
Selling Stockholder in connection with the issuance and distribution of the
Securities, other than underwriting discounts and commissions. The Company will
bear all of such expenses, except for the Selling Stockholder's legal fees and
expenses. All the amounts shown are estimates, except the registration fee.
<TABLE>
<S> <C>
Registration Fee................................................ $ 120,067
Fees and expenses of accountants................................ 50,000
Fees and expenses of counsel to the Company..................... 75,000
Fees and expenses of the Selling Stockholder's counsel.......... 5,000
Fees and expenses of Trustee and counsel........................ 10,000
Printing and engraving.......................................... 100,000
Blue Sky fees and expenses (including counsel).................. 15,000
Rating agency fees.............................................. 150,000
Miscellaneous................................................... 49,933
----------
Total................................................. $ 575,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 17-6305 of the Kansas General Corporation Law provides that a
Kansas corporation shall have power to indemnify any person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action or suit (including an action by or in the right of the
corporation to procure a judgment in its favor) or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit by or
in the right of the corporation, including attorney fees, and against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, including
attorney fees, if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation; and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. Article Ninth of
the articles of incorporation of the Company requires the Company to provide
substantially the same indemnification of its directors and officers as that
authorized by the Kansas General Corporation Law.
The Company has insurance policies which, among other things, include
liability insurance coverage for directors and officers, with a $200,000
corporate reimbursement deductible clause, under which directors and officers
are covered against "loss" arising from any claim or claims which may be made
against a director or officer by reason of any "wrongful act" in their
respective capacities as directors and officers. "Loss" is defined so as to
exclude, among other things, fines or penalties, as well as matters deemed
uninsurable under the law pursuant to which the policy is to be construed.
"Wrongful act" is defined to include any actual or alleged breach of duty,
neglect, error, misstatement, misleading statement or omission done or
wrongfully attempted. The policy also contains other specific definitions and
exclusions and provides an aggregate of $20,000,000 of insurance coverage.
II-1
<PAGE> 24
ITEM 16. EXHIBITS.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
in parentheses:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- --------------------- ---------------------------------------------------------------------
<S> <C>
(1.1) -- Form of Purchase Agreement (including form of Delayed Delivery
Contract) relating to Debt Securities (incorporated herein by
reference to Exhibit 1 to the Company's S-3 Registration Statement
No. 33-45091 filed with the Commission on January 17, 1992).
*(1.2) -- Form of Underwriting Agreement relating to Common Stock
(4.1) -- Form of Indenture, dated as of November 20, 1993, between K N Energy,
Inc. and Continental Bank, National Association (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement No.
33-51115).
(4.2) -- Form of Subordinated Indenture dated as of May 15, 1996 between the
Company and First Trust of Illinois, National Association as Trustee.
**(4.3) -- Forms of Debt Securities.
(4.4) -- Restated Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994).
(4.5) -- Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994).
(4.6) -- Rights Agreement dated as of August 21, 1995 between the Company and
The Bank of New York, as Rights Agent (incorporated by reference to
Exhibit 1 to the Company's Form 8-A Registration Statement dated
August 21, 1995).
(5) -- Opinion of Vinson & Elkins L.L.P. as to the legality of the
Securities being registered.
(12) -- Computation of ratios of earnings to fixed charges.
(23.1) -- Consent of Independent Public Accountants.
(23.2) -- Consent of Vinson & Elkins L.L.P. (included in Exhibit (5)).
(24) -- Powers of Attorney.
(25) -- Statements of Eligibility and Qualification under the Trust Indenture
Act of 1939 on Form T-1 of First Trust of Illinois, National
Association.
</TABLE>
- ---------------
* The Company will file any underwriting agreement relating to Common Stock
that it may enter into as an exhibit to a Current Report on Form 8-K which is
incorporated by reference into this Registration Statement.
** The Company will file any form of Debt Securities not previously so filed as
an exhibit to a Current Report on Form 8-K which is incorporated by reference
into this Registration Statement.
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or
II-2
<PAGE> 25
in the aggregate, represent a fundamental change in the information set
forth in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to any charter provision, by-law, contract, arrangement,
statute, or otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
against the Company by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lakewood, State of Colorado on the 23rd day of May,
1996.
K N ENERGY, INC.
BY: /s/ LARRY D. HALL
-----------------------------------
Chairman of the Board,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 23, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
<C> <S>
(i) Principal executive officer:
/s/ Larry D. Hall Chairman of the Board, President and Chief
- ------------------------------------------ Executive Officer
(Larry D. Hall)
(ii) Principal financial and accounting
officer:
* Vice President and Chief Financial Officer
- ------------------------------------------
(Clyde E. McKenzie)
(iii) Directors:
*
- ------------------------------------------
(Edward H. Austin, Jr.)
*
- ------------------------------------------
(Charles W. Battey)
*
- ------------------------------------------
(Stewart A. Bliss)
*
- ------------------------------------------
(David W. Burkholder)
*
- ------------------------------------------
(David M. Carmichael)
*
- ------------------------------------------
(Robert H. Chitwood)
*
- ------------------------------------------
(Howard P. Coghlan)
</TABLE>
II-4
<PAGE> 27
<TABLE>
<CAPTION>
SIGNATURE
- ---------------------------------------------
<C> <S>
*
- ---------------------------------------------
(Jordan L. Haines)
/s/ LARRY D. HALL
- ---------------------------------------------
(Larry D. Hall)
*
- ---------------------------------------------
(William J. Hybl)
*
- ---------------------------------------------
(Edward Randall, III)
*
- ---------------------------------------------
(James C. Taylor)
*
- ---------------------------------------------
(H. A. True, III)
*By: /s/ Larry D. Hall
- ---------------------------------------------
(Larry D. Hall, Attorney-in-Fact)
</TABLE>
II-5
<PAGE> 28
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- --------------------- ---------------------------------------------------------------------
<S> <C> <C>
(1.1) -- Form of Purchase Agreement (including form of Delayed Delivery
Contract) relating to Debt Securities (incorporated herein by
reference to Exhibit 1 to the Company's S-3 Registration Statement
No. 33-45091 filed with the Commission on January 17, 1992).
*(1.2) -- Form of Underwriting Agreement relating to Common Stock
(4.1) -- Form of Indenture, dated as of November 20, 1993, between K N Energy,
Inc. and Continental Bank, National Association (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement No.
33-51115).
(4.2) -- Form of Subordinated Indenture dated as of May 15, 1996 between the
Company and First Trust of Illinois, National Association as Trustee.
**(4.3) -- Forms of Debt Securities.
(4.4) -- Restated Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994).
(4.5) -- Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994).
(4.6) -- Rights Agreement dated as of August 21, 1995 between the Company and
The Bank of New York, as Rights Agent (incorporated by reference to
Exhibit 1 to the Company's Form 8-A Registration Statement dated
August 21, 1995).
(5) -- Opinion of Vinson & Elkins L.L.P. as to the legality of the
Securities being registered.
(12) -- Computation of ratios of earnings to fixed charges.
(23.1) -- Consent of Independent Public Accountants.
(23.2) -- Consent of Vinson & Elkins L.L.P. (included in Exhibit (5)).
(24) -- Powers of Attorney.
(25) -- Statements of Eligibility and Qualification under the Trust Indenture
Act of 1939 on Form T-1 of First Trust of Illinois, National
Association.
</TABLE>
- ---------------
* The Company will file any underwriting agreement relating to Common Stock
that it may enter into as an exhibit to a Current Report on Form 8-K which is
incorporated by reference into this Registration Statement.
** The Company will file any form of Debt Securities not previously so filed as
an exhibit to a Current Report on Form 8-K which is incorporated by reference
into this Registration Statement.
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
K N ENERGY, INC.
TO
FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION
TRUSTEE
------------------------
SUBORDINATED INDENTURE
Dated as of May 15, 1996
------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
K N ENERGY, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE DATED AS OF MAY 15, 1996
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- --------------- -----------------
<S> <C> <C>
sec. 310(a)(1) ............................................................. 609
(a)(2) ............................................................. 609
(a)(3) ............................................................. Not applicable
(a)(4) ............................................................. Not applicable
(b) ............................................................. 608, 610
sec. 311(a) ............................................................. 613
(b) ............................................................. 613
sec. 312(a) ............................................................. 701, 702
(b) ............................................................. 702
(c) ............................................................. 702
sec. 313(a) ............................................................. 703
(b) ............................................................. 703
(c) ............................................................. 703
(d) ............................................................. 703
sec. 314(a)(1)-(3) ............................................................. 704
(a)(4) ............................................................. 101, 1004
(b) ............................................................. Not applicable
(c)(1) ............................................................. 102
(c)(2) ............................................................. 102
(c)(3) ............................................................. Not applicable
(d) ............................................................. Not applicable
(e) ............................................................. 102
sec. 315(a) ............................................................. 601
(b) ............................................................. 602
(c) ............................................................. 601
(d) ............................................................. 601
(e) ............................................................. 514
sec. 316(a) ............................................................. 101
(a)(1)(A) ............................................................. 502, 512
(a)(1)(B) ............................................................. 513
(a)(2) ............................................................. Not applicable
(b) ............................................................. 508
(c) ............................................................. 104
sec. 317(a)(1) ............................................................. 503
(a)(2) ............................................................. 504
(b) ............................................................. 1003
sec. 318(a) ............................................................. 108
</TABLE>
- ---------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
RECITALS OF THE COMPANY............................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
SECTION 101. Definitions............................................................ 1
SECTION 102. Compliance Certificates and Opinions................................... 6
SECTION 103. Form of Documents Delivered to Trustee................................. 6
SECTION 104. Acts of Holders........................................................ 7
SECTION 105. Notices, Etc., to Trustee and Company.................................. 8
SECTION 106. Notice to Holders of Securities; Waiver................................ 8
SECTION 107. Language of Notices, Etc. ............................................. 9
SECTION 108. Conflict with Trust Indenture Act...................................... 9
SECTION 109. Effect of Headings and Table of Contents............................... 9
SECTION 110. Successors and Assigns................................................. 9
SECTION 111. Separability Clause.................................................... 9
SECTION 112. Benefits of Indenture.................................................. 9
SECTION 113. Governing Law.......................................................... 9
SECTION 114. Legal Holidays......................................................... 9
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally........................................................ 10
SECTION 202. Form of Trustee's Certificate of Authentication........................ 10
SECTION 203. Securities in Global Form.............................................. 10
SECTION 204. Form of Legend for Book-Entry Securities............................... 11
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series................................... 11
SECTION 302. Denominations.......................................................... 13
SECTION 303. Execution, Authentication, Delivery and Dating......................... 13
SECTION 304. Temporary Securities................................................... 15
SECTION 305. Registration, Registration of Transfer and Exchange.................... 16
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons........... 19
SECTION 307. Payment of Interest; Interest Rights Preserved......................... 19
SECTION 308. Persons Deemed Owners.................................................. 20
SECTION 309. Cancellation........................................................... 21
SECTION 310. Computation of Interest................................................ 21
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture................................ 21
SECTION 402. Application of Trust Money............................................. 22
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default...................................................... 22
SECTION 502. Acceleration of Maturity; Rescission and Annulment..................... 23
</TABLE>
(i)
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee........ 24
SECTION 504. Trustee May File Proofs of Claim....................................... 24
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons................................................................ 25
SECTION 506. Application of Money Collected......................................... 25
SECTION 507. Limitation on Suits.................................................... 26
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest............................................................... 26
SECTION 509. Restoration of Rights and Remedies..................................... 26
SECTION 510. Rights and Remedies Cumulative......................................... 26
SECTION 511. Delay or Omission Not Waiver........................................... 27
SECTION 512. Control by Holders of Securities....................................... 27
SECTION 513. Waiver of Past Defaults................................................ 27
SECTION 514. Undertaking for Costs.................................................. 27
SECTION 515. Waiver of Stay or Extension Laws....................................... 27
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.................................... 28
SECTION 602. Notice of Defaults..................................................... 28
SECTION 603. Certain Rights of Trustee.............................................. 28
SECTION 604. Not Responsible for Recitals or Issuance of Securities................. 29
SECTION 605. May Hold Securities.................................................... 29
SECTION 606. Money Held in Trust.................................................... 29
SECTION 607. Compensation and Reimbursement......................................... 29
SECTION 608. Disqualification; Conflicting Interests................................ 30
SECTION 609. Corporate Trustee Required; Eligibility................................ 30
SECTION 610. Resignation and Removal; Appointment of Successor...................... 30
SECTION 611. Acceptance of Appointment by Successor................................. 31
SECTION 612. Merger, Conversion, Consolidation or Succession to Business............ 32
SECTION 613. Preferential Collection of Claims Against Company...................... 32
SECTION 614. Appointment of Authenticating Agent.................................... 32
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.............. 34
SECTION 702. Preservation of Information: Communications to Holders................. 34
SECTION 703. Reports by Trustee..................................................... 34
SECTION 704. Reports by Company..................................................... 34
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms................... 35
SECTION 802. Successor Substituted.................................................. 35
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders..................... 35
SECTION 902. Supplemental Indentures with Consent of Holders........................ 36
SECTION 903. Execution of Supplemental Indentures................................... 37
SECTION 904. Effect of Supplemental Indentures...................................... 37
</TABLE>
(ii)
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 905. Conformity with Trust Indenture Act.................................... 37
SECTION 906. Reference in Securities to Supplemental Indentures..................... 37
SECTION 907. Subordination Unimpaired............................................... 38
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest............................. 38
SECTION 1002. Maintenance of Office or Agency........................................ 38
SECTION 1003. Money for Securities Payments to Be Held in Trust...................... 39
SECTION 1004. Additional Amounts..................................................... 40
SECTION 1005. Purchase of Securities by Company or Subsidiary........................ 40
SECTION 1006. Appointments to Fill Vacancies in Trustee's Office..................... 40
SECTION 1007. Statement by Officer as to Default..................................... 41
SECTION 1008. Waiver of Certain Covenants............................................ 41
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article............................................... 41
SECTION 1102. Election to Redeem; Notice to Trustee.................................. 41
SECTION 1103. Selection of Securities to Be Redeemed................................. 41
SECTION 1104. Notice of Redemption................................................... 42
SECTION 1105. Deposit of Redemption Price............................................ 42
SECTION 1106. Securities Payable on Redemption Date.................................. 43
SECTION 1107. Securities Redeemed in Part............................................ 43
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article............................................... 43
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.................. 44
SECTION 1203. Redemption of Securities for Sinking Fund.............................. 44
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance........... 44
SECTION 1302. Defeasance and Discharge............................................... 44
SECTION 1303. Covenant Defeasance.................................................... 45
SECTION 1304. Conditions to Defeasance or Covenant Defeasance........................ 45
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions......................................... 46
SECTION 1306. Reinstatement.......................................................... 47
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called.............................. 47
SECTION 1402. Call, Notice and Place of Meetings..................................... 47
SECTION 1403. Persons Entitled to Vote at Meetings................................... 47
SECTION 1404. Quorum; Action......................................................... 48
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings.... 48
SECTION 1406. Counting Votes and Recording Action of Meetings........................ 49
</TABLE>
(iii)
<PAGE> 6
<TABLE>
<S> <C> <C>
ARTICLE FIFTEEN
CONVERSION OF SECURITIES
SECTION 1501. Applicability of Article............................................... 49
SECTION 1502. Exercise of Conversion Privilege....................................... 49
SECTION 1503. Fractional Interests................................................... 50
SECTION 1504. Adjustment of Conversion Price......................................... 50
SECTION 1505. Continuation of Conversion Privilege in Case of Merger, Consolidation
or Sale of Assets...................................................... 52
SECTION 1506. Notice of Certain Events............................................... 53
SECTION 1507. Taxes on Conversion.................................................... 54
SECTION 1508. Company to Provide Stock............................................... 54
SECTION 1509. Disclaimer of Responsibility for Certain Matters....................... 54
SECTION 1510. Return of Funds Deposited for Redemption of Converted Securities....... 54
ARTICLE SIXTEEN
SUBORDINATION
SECTION 1601. Securities Subordinated to Senior Indebtedness......................... 55
SECTION 1602. Reliance on Certificate of Liquidating Agent; Further Evidence as to
Ownership of Senior Indebtedness....................................... 56
SECTION 1603. Payment Permitted If No Default........................................ 57
SECTION 1604. Disputes with Holders of Certain Senior Indebtedness................... 57
SECTION 1605. Trustee Not Charged with Knowledge of Prohibition...................... 57
SECTION 1606. Trustee to Effectuate Subordination.................................... 58
SECTION 1607. Rights of Trustee as Holder of Senior Indebtedness..................... 58
SECTION 1608. Article Applicable to Paying Agents.................................... 58
SECTION 1609. Subordination Rights Not Impaired by Acts or Omissions of the Company
or Holders of Senior Indebtedness...................................... 58
SECTION 1610. Trustee Not Fiduciary for Holders of Senior Indebtedness............... 58
</TABLE>
(iv)
<PAGE> 7
SUBORDINATED INDENTURE, dated as of May 15, 1996, between K N ENERGY, INC.,
a corporation duly organized and existing under the laws of the State of Kansas
(herein called the "Company"), having its principal office at 370 Van Gordon
Street, Lakewood, Colorado 80228, and FIRST TRUST OF ILLINOIS, NATIONAL
ASSOCIATION, a national banking association, 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 subordinated
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
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 a series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. 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 in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United States
of America at the date of this Indenture; 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, and the words "date of this
Indenture" and "date hereof" and other words of similar import refer to the
effective date of the original execution and delivery of this Indenture,
viz. November 20, 1993.
"Act", when used with respect to any Holder of a Security, has the meaning
specified in Section 104.
"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.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
1
<PAGE> 8
"Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United States
Code sec.sec. 101 et seq., or any successor statute thereto.
"Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer, including, without limitation, a
Security in temporary or permanent global form.
"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 bearing the legend specified in
Section 204, 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. Book-Entry Securities shall not be deemed to be
Securities in global form for purposes of Sections 201 and 203 and Article Three
of this Indenture.
"Business Day", when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment or other location are authorized
or obligated by law or executive order to close.
"Certification Date" means with respect to Securities of any series (i), if
Bearer Securities of such series are not to be initially represented by a
temporary global Security, the date of delivery of the definitive Bearer
Security and (ii), if Bearer Securities of such series are initially represented
by a temporary global Security, the earlier of (A) the Exchange Date with
respect to Securities of such series and (B), if the first Interest Payment Date
with respect to Securities of such series is prior to such Exchange Date, such
Interest Payment Date.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, 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.
"Common Depositary" has the meaning specified in Section 304.
"Common Stock" means the Common Stock, par value $5.00 per share, of the
Company as the same exists at the date of execution and delivery of this
Indenture or other capital stock of the Company into which such Common Stock is
converted, reclassified or changed from time to time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman
of the Board, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Conversion Agent" means any Person authorized by the Company to convert
any Securities on behalf of the Company.
"Conversion Price" has the meaning specified in Section 1504.
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<PAGE> 9
"Corporate Trust Office" means the principal office of the Trustee in
Chicago, Illinois, at which at any particular time its corporate trust business
shall be administered.
The term "corporation" means a corporation, association, limited liability,
company, joint-stock company or business trust.
The term "coupon" means any interest coupon appertaining to a Bearer
Security.
"Date of Conversion" has the meaning set forth in Section 1502.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Book-Entry Securities,
the clearing agency registered under the Securities Exchange Act of 1934,
specified for that purpose as contemplated by Section 301.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"Euro-clear" means the operator of the Euro-clear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Holder", when used with respect to any Security, means in the case of a
Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"Indebtedness" means, with respect to any Person,
(a)(i) the principal of and interest and premium, if any, on
indebtedness for money borrowed of such Person evidenced by bonds, notes,
debentures or similar obligations, including any guaranty by such Person of
any indebtedness for money borrowed of any other Person, whether any such
indebtedness or guaranty is outstanding on the date of this Indenture or is
thereafter created, assumed or incurred, (ii) the principal of and interest
and premium, if any, on indebtedness for money borrowed, incurred, assumed
or guaranteed by such Person in connection with the acquisition by it or
any of its subsidiaries of any other businesses, properties or other assets
and (iii) lease obligations which such Person capitalizes in accordance
with Statement of Financial Accounting Standards No. 13 promulgated by the
Financial Accounting Standards Board or such other generally accepted
accounting principles as may be from time to time in effect;
(b) any other indebtedness of such Person, including any indebtedness
representing the balance deferred and unpaid of the purchase price of any
property or interest therein, including any such balance that constitutes a
trade account payable, and any guaranty, endorsement or other contingent
obligation of such Person in respect of any indebtedness of another, which
is outstanding on the date of this Indenture or is thereafter created,
assumed or incurred by such Person; and
(c) any amendments, modifications, refundings, renewals or extensions
of any indebtedness or obligation described as Indebtedness in clause (a)
or (b) above.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of particular series of Securities established as contemplated
by Section 301.
The term "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.
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<PAGE> 10
"Last Sale Price" has the meaning specified in Section 1503.
"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 herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate complying with the provisions
of Section 102 signed by the Chairman of the Board, Vice Chairman of the Board,
the President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company.
"Original Issue Discount Security" means any Security which is issued at a
price lower than the principal amount payable upon the Stated Maturity thereof
and which provides for an amount less than the principal amount thereof to be
due and payable upon redemption thereof or upon a declaration of acceleration of
the Maturity thereof pursuant to Section 502.
"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 and any coupons appertaining thereto, 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 306 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 converted into Common Stock pursuant hereto and, for
purposes of selection for redemption, Securities not deemed Outstanding
pursuant to Section 1103.
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, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities (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 502, (ii) the principal amount of a Security denominated in
a foreign currency or currencies, including composite currencies, shall be the
Dollar equivalent, determined on the date of original issuance of such Security
in the manner provided as contemplated by Section 301, of the principal amount
(or, in the case of an Original Issue Discount Security, the 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, or upon any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
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<PAGE> 11
"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, partnership, 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 as specified in accordance with Section 301 where,
subject to the provisions of Section 1002, the principal of and any premium and
interest on the Securities of that series are payable.
"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 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
"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.
"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.
"Registered Security" means any Security in the form established pursuant
to Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, shall mean
any officer in the corporate trust department (or any successor group) of the
Trustee, including any Vice President, any Trust Officer, or any other officer
of the Trustee customarily performing functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred at the Corporate Trust Office because of his
or her knowledge of and familiarity with the particular subject.
"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 305.
"Senior Indebtedness" means Indebtedness of the Company outstanding at any
time except (a) any Indebtedness as to which, by the terms of the instrument
creating or evidencing the same, it is provided that such Indebtedness is not
senior in right of payment to the Securities, (b) the Securities, (c) any
Indebtedness of the Company to a wholly-owned Subsidiary of the Company, (d)
interest accruing after the filing of a petition initiating any proceeding
referred to in Sections 501(5) and 501(6) unless such interest is an allowed
claim enforceable against the Company in a proceeding under Federal or State
bankruptcy laws and (e) trade accounts payable.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"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 or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has
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<PAGE> 12
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Trading Day" has the meaning specified in Section 1503.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture 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.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this Indenture was executed; provided, however, that in the
event the Trust Indenture Act of l 939 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.
"United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" has the meaning specified in Section 1304.
"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".
SECTION 102. 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.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 104. Acts of Holders.
(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 an agent duly appointed in writing.
If Securities of a series are issuable as Bearer Securities, any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
Fourteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy or of the holding by any Person of a Security, shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1406.
(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 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 Registered 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 701) 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 principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.
(e) The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The principal amount and
serial numbers of Bearer Securities held by any
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<PAGE> 14
Person, and the date of holding the same, may also be proved in any other manner
which the Trustee deems sufficient.
(f) 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.
(g) Without limiting the foregoing, a Holder entitled hereunder to give or
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
SECTION 105. 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: Corporate
Trust Department, 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 Indenture, to the attention of its Treasurer, or at
any other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as other vise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security affected by such event, at the address of
such Holder as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the
giving of such notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities if published in an Authorized Newspaper in The City of New York
and in such other city or cities as may be specified in such Securities on
a Business Day at least twice, the first such publication to be not earlier
than the earliest date, and not later than the latest date, prescribed for
the giving of such notice.
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 to Holders of
Registered Securities by mail, then such notification as shall be made with the
approval of the Trustee shall constitute sufficient notice to such Holders for
every purpose hereunder. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder of a Registered
Security shall affect the sufficiency of such notice with respect to other
Holders of Registered Securities or the sufficiency of any notice to Holders of
Bearer Securities given as provided herein.
In case by the reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any
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<PAGE> 15
defect in any notice so published, shall affect the sufficiency of any notice to
Holders of Registered Securities given as provided herein.
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 of Securities 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.
SECTION 107. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
SECTION 108. 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 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 110. 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 111. Separability Clause.
In case any provision in this Indenture or the Securities or coupons shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or the Securities or coupons, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder, the holders of Senior Indebtedness and the Holders of Securities and
coupons, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 113. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date for conversion 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 or coupons other than a
provision in 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 and
such conversion need not be made at such Place of Payment on such date, but may
be made on the
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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, or on the last date for conversion, as the case may be,
provided that no interest shall accrue on the amount so payable for the period
from and after such date.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in substantially
the form (including temporary or permanent global 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 law, or with the
rules of any securities exchange or to conform to general, usage, all as may,
consistently herewith, be determined by the officers executing such Securities
or coupons, as evidenced by their execution of the Securities or coupons. If
temporary Securities of any series are issued in global form as permitted by
Section 304, the form thereof shall be established as provided in the preceding
sentence. A copy of the Board Resolution establishing the forms of Securities or
coupons of any series (or any such temporary global Security) 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
303 for the authentication and delivery of such Securities (or any such
temporary global Security) or coupons.
Unless otherwise specified as contemplated by Section 301, Securities in
bearer form shall have interest coupons attached.
The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate 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.
FIRST TRUST OF ILLINOIS, NATIONAL
ASSOCIATION,
as Trustee
By
--------------------------------------
Authorized Officer."
SECTION 203. Securities in Global Form.
If Securities of a series are issuable in global form, as specified as
contemplated by Section 301, then, notwithstanding clause (10) of Section 301
and the provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may be reduced to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount, or any increase
or decrease in the amount, of
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<PAGE> 17
Outstanding Securities represented thereby shall be made by the Trustee in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304. Subject to the provisions of Section 303
and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
SECTION 204. Form of Legend for Book-Entry Securities.
Any Book-Entry Security authenticated and delivered hereunder shall 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 no transfer of this
Security (other than a transfer of this Security 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) may be registered except in such limited
circumstances."
ARTICLE THREE
THE SECURITIES
SECTION 301. 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, and each such series
shall rank equally and pari passu with each other series, but all Securities
issued hereunder shall be subordinate and junior in right of payment, to the
extent and in the manner set forth in Article Sixteen, to all Senior
Indebtedness. There shall be established in or pursuant to a Board Resolution
and, subject to Section 303, set forth, or determined in the 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 all other Securities);
(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 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
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(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities or both, whether any Securities of the series
are to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form with
or without coupons and, if so, whether beneficial owners of interests in
any such permanent global Security may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305;
(4) the Person to whom any interest on any Registered 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, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature and the extent
to which, or the manner in which, any interest payable on a temporary
global Security on an Interest Payment Date will be paid if other than in
the manner provided in Section 304;
(5) the date or dates on which the principal of the Securities of the
series is payable;
(6) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate shall be determined, the
date or dates from which any such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable, and the Regular
Record Date for any interest payable on any Registered Securities on any
Interest Payment Date and whether, and under what circumstances, additional
amounts with respect to such Securities shall be payable as set forth in
Section 1001;
(7) the place or places where, subject to the provisions of Section
1002, the principal of and any premium and interest on Securities of the
series shall be payable, any Registered Securities of the series may be
surrendered for registration of transfer, Securities of the series may be
surrendered for exchange or conversion and notices and demands to or upon
the Company in respect of the Securities of the series and this Indenture
may be served;
(8) the right, if any, of the Company to redeem Securities of the
series, in whole or in part, at its option and 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 so redeemed;
(9) the obligation, if any, of the Company to redeem, purchase, or
repay Securities of the series pursuant to any mandatory redemption,
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;
(10) the denominations in which any Registered Securities of the
series shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in which
any Bearer Securities of the series shall be issuable, if other than the
denomination of $5,000;
(11) the currency or currencies, including composite currencies, 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 101;
(12) if the amount of payments of principal of and any premium or
interest on any Securities of the series may be determined with reference
to an index, the manner in which such amounts shall be determined;
(13) if other than the principal amount thereof, the portion of the
principal amount of any Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
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(14) if the principal of and any premium or interest on the Securities
of the series are to be payable, at the election of the Company or a Holder
thereof, in a currency or currencies, including composite currencies, other
than that or those in which the Securities are stated to be payable, the
currency or currencies 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;
(15) whether the Securities of the series shall be issued upon
original issuance in whole or in part in the form of one or more Book-Entry
Securities and, in such case, (a) the Depository with respect to such
Book-Entry Security or Securities; and (b) the circumstances under which
any such Book-Entry Security may be exchanged for Securities registered in
the name of, and any transfer of such Book-Entry Security may be registered
to, a Person other than such Depository or its nominee, if other than as
set forth in Section 305;
(16) if either or both of the provisions of Section 1302 or 1303 are
applicable to the Securities of such series and any additional means of
discharge pursuant to Section 1302 or 1303 and any additional conditions to
the provisions of Section 1302 or 1303;
(17) any other Events of Default or covenants with respect to the
Securities of such series;
(18) whether the Securities of the series will be convertible into
Common Stock (or cash in lieu thereof) and, if so, the terms and conditions
upon which such conversion will be effected including the initial
Conversion Price and any adjustments thereto in addition to or different
from those set forth in Section 1504, the conversion period and other
provisions in addition to or in lieu of those set forth herein;
(19) any subordination provisions with respect to the Securities of
such series in addition to or in lieu of those set forth in Article Sixteen
hereof; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture except as permitted by
Section 901(5)).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and (subject
to Section 303) 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 302. Denominations.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, any Registered Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof and any
Bearer Securities of a series shall be issuable in the denomination of $5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, a Vice Chairman of the Board, its President, its Treasurer or its
Chief Financial Officer, 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. Coupons shall bear the
facsimile signature of the Treasurer or any Assistant Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of
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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, together with any
coupons appertaining thereto, 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; provided, however, that,
unless otherwise provided with respect to such series, in connection with its
original issuance, no Bearer Security shall be mailed or otherwise delivered to
any location in the United States; and provided, further, that, unless otherwise
provided with respect to such series, a Bearer Security may be delivered in
connection with its original issuance only if the Person entitled to receive
such Bearer Security shall have furnished a certificate in the form set forth in
Exhibit A to this Indenture, dated no earlier than the Certification Date. If
any Security shall be represented by a permanent global Bearer Security, then,
for purposes of this Section and Section 304, the notation of a beneficial
owner's interest therein upon original issuance of such Security or upon
exchange of a portion of a temporary global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent global Security. Except as permitted by Section 306,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and canceled.
In authenticating Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating:
(a) that the forms of such Securities and coupons established by or
pursuant to a Board Resolution as contemplated by Section 201 have been
established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities and any coupons have been
established by or pursuant to a Board Resolution as permitted by Section
301, that such terms have been established in conformity with the
provisions of this Indenture; and
(c) that such Securities, together with any coupons appertaining
thereto, 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 and other laws
of general applicability relating to or affecting creditors' rights and to
general equity principles.
Such Opinion of Counsel shall also cover such other matters as the Trustee may
reasonably request.
The Trustee shall not be required to authenticate such Securities the forms
or terms of which have been established by or pursuant to a Board Resolution 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 301 and of the two preceding
paragraphs, 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 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraphs 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 issuance of the first Security
of such series to be issued.
After the original issuance of the first Security of such series to be
issued, any separate request by the Company that the Trustee authenticate
Securities of such series for original issuance will be deemed to be a
certification by the Company (which, subject to Section 601, the Trustee shall
be fully protected in relying on) that it is in compliance with all conditions
precedent provided for in this Indenture relating to the authentication and
delivery of such Securities.
Each Registered Security shall be dated the date of its authentication; and
each Bearer Security shall be dated as of the date of original issuance of the
first Security of such series to be issued.
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No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security,
or the Security to which such coupon appertains, 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 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. 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 or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, in registered form or,
if authorized, in bearer form with one or more coupons or without coupons, 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. In the case of any series issuable as Bearer
Securities, such temporary Securities may be in global form. A temporary Bearer
Security shall be delivered only in compliance with the conditions set forth in
Section 303.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of the following paragraphs), 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 maintained pursuant to Section 1002 in a Place of Payment for such
series for the purpose of exchanges of Securities of such series without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series (accompanied by any unmatured coupons appertaining
thereto) the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like aggregate principal amount of definitive
Securities of the same series and of like tenor of authorized denominations;
provided, however, that no definitive Bearer Security shall be issued in
exchange for a temporary Registered Security.
If temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euro-clear and CEDEL S.A., for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security of a series (the "Exchange Date"), the Company shall deliver to the
Trustee definitive Securities of that series in aggregate principal amount equal
to the principal amount of such temporary global Security, executed by the
Company. On or after the Exchange Date such temporary global Security shall be
surrendered by the Common Depositary to the Trustee, as the Company's agent for
such purpose, to be exchanged, in whole or from time to time in part, for
definitive Securities of that series without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such temporary global
Security, a like aggregate principal amount of definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
temporary global Security to be exchanged; provided, however, that, unless
otherwise specified in such temporary global Security, upon such presentation by
the Common Depositary, such temporary global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by
Euro-clear as to the portion of such temporary global Security held for its
account then to be exchanged and a certificate dated the Exchange Date or a
subsequent
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date and signed by CEDEL S.A. as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit B to this Indenture. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 301,
and if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that no definitive Bearer Security or
permanent global Security shall be delivered in exchange for a temporary Bearer
Security except in compliance with the conditions set forth in Section 303.
Unless otherwise specified in the temporary global Security, the interest
of a beneficial owner of Securities of a series in a temporary global Security
shall be exchanged on the Exchange Date for definitive Securities (and where the
form of the definitive Securities is not specified by the Holder for an interest
in a permanent global Security) of the same series and of like tenor unless, on
or prior to the Exchange Date, such beneficial owner has not delivered to
Euro-clear or CEDEL S.A., as the case may be, a certificate in the form set
forth in Exhibit A to this Indenture dated no earlier than the Certification
Date, copies of which certificate shall be available from the offices of
Euro-clear and CEDEL S.A., the Trustee, any Authenticating Agent appointed for
such series of Securities and each Paying Agent and after the Exchange Date, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities (and where the form of the
definitive Securities is not specified by the Holder for an interest in a
permanent global Security) of the same series and of like tenor following such
beneficial owner's delivery to Euro-clear or CEDEL S.A., as the case may be, of
a certificate in the form set forth in Exhibit A to this Indenture dated no
earlier than the Certification Date. Unless otherwise specified in such
temporary global Security, any exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Securities in person at the offices of Euro-clear or CEDEL
S.A. Definitive Securities in bearer form to be delivered in exchange for any
portion of a temporary global Security shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary global Security
on an Interest Payment Date for Securities of such series shall be payable to
Euro-clear and CEDEL S.A. on such Interest Payment Date upon delivery by
Euro-clear and CEDEL S.A. to the Trustee of a certificate or certificates in the
form set forth in Exhibit B to this Indenture, for credit without further
interest on or after such Interest Payment Date to the respective accounts of
the Persons who are the beneficial owners of such temporary global Security on
such Interest Payment Date and who have each delivered to Euro-clear or CEDEL
S.A., as the case may be, a certificate in the form set forth in Exhibit A to
this Indenture. Any interest so received by Euro-clear and CEDEL S.A. and not
paid as herein provided shall be returned to the Trustee immediately prior to
the expiration of two years after such Interest Payment Date in order to be
repaid to the Company in accordance with Section 1003.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be maintained
by the Company in accordance with Section 1002 a register (being the combined
register of the Security Registrar and all transfer agents designated pursuant
to Section 1002 for the purpose of registration of transfer of Securities and
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 each series of Registered Securities and the
registration of transfers of such Registered Securities. The Company shall serve
initially as "Security Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained pursuant to Section
1002 for such purpose in a Place of Payment for such series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated
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transferee or transferees, one or more new Registered Securities of the same
series of any authorized denominations and of a like aggregate principal amount
and tenor.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at any 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. Unless otherwise provided with respect to
any series of Securities, Bearer Securities may not be issued in exchange for
Registered Securities.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in exchange for a Registered Security
of the same series and like tenor after the close of business at such office or
agency on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, such Bearer Security
shall be surrendered without the coupon relating to such Interest Payment Date
or proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security but will be payable only to
the Holder of such coupon when due in accordance with the provisions of this
Indenture.
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.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 301, then without
unnecessary delay but in any event not later than the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in an aggregate principal amount equal to
the principal amount of such permanent global Security, executed by the Company.
On or after the earliest date on which such interests may be so exchanged, such
permanent global Security shall be surrendered from time to time in accordance
with instructions given to the Trustee and the Common Depositary (which
instructions shall be in writing but need not comply with Section 102 or be
accompanied by an Opinion of Counsel) by the Common Depositary or such other
depositary or Common Depositary as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or in part, for definitive Securities of the same series
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such permanent global Security, a like aggregate principal
amount definitive Securities of the same series of authorized denominations and
of like tenor as the portion of such permanent global Security to be exchanged
which, unless the Securities of the series are not issuable both as Bearer
Securities and as Registered Securities, as specified as contemplated by Section
301, shall be in the form of Bearer Securities or
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Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before any
selection of Securities of that series is to be redeemed and ending on the
relevant Redemption Date; and provided, further, that no Bearer Security
delivered in exchange for a portion of a permanent global Security shall be
mailed or otherwise delivered to any location in the United States. Promptly
following any such exchange in part, such permanent global Security shall be
returned by the Trustee to the Common Depositary or such other depositary or
Common Depositary referred to above in accordance with the instructions of the
Company referred to above. If a Registered Security is issued in exchange for
any portion of such permanent global Security after the close of business at the
office or agency where such exchange occurs on (i) any Regular Record Date and
before the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any Special Record Date and before the opening of business
at such office or agency on the related proposed date for payment of Defaulted
Interest, interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with provisions of this Indenture.
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 Registered Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee or any
transfer agent) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar or any
transfer agent 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 304, 906 or 1107 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 any selection of Securities of that series to be
redeemed and ending at the close of business on (A) if Securities of the series
are issuable only as Registered Securities, the day of the mailing of the
relevant notice of redemption and (B) if Securities of the series are issuable
as Bearer Securities, the day of the first publication of the relevant notice of
redemption, or if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any Registered Security being redeemed in part, or (iii) to exchange
any Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 301, any Book-Entry Security shall be exchangeable
pursuant to this Section 305 or Sections 304, 906 and 1107 for Securities
registered in the name of, and a transfer of a Book-Entry Security of any series
may be registered to, any Person 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, (ii) the Company executes and delivers to the
Trustee a Company Order that such Book-Entry Security shall be so exchangeable
and the transfer thereof so registrable or (iii) there shall have occurred and
be continuing an Event of Default, with respect to the Securities of such
series. Upon the occurrence in respect of any Book-Entry Security of any series
of any one or more of the conditions specified in clause (i), (ii) or (iii) of
the preceding sentence or such other conditions as may be specified, such
Book-Entry Security may be exchanged for Securities registered in the names of,
and the transfer of such Book-Entry Security may be registered to,
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such Persons (including Persons other than the Depository with respect to such
series and its nominees) as such Depository shall direct. Notwithstanding any
other provision of this Indenture, any Security authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, any Book-Entry
Security shall also be a Book-Entry Security and shall bear the legend specified
in Section 204 except for any Security authenticated and delivered in exchange
for, or upon registration of transfer of, a Book-Entry Security pursuant to the
preceding sentence.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.
If any mutilated Security or a Security with a mutilated coupon
appertaining thereto 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, with coupons corresponding to the
coupons, if any, appertaining to the surrendered Security.
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 or coupon
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 or coupon 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
or in exchange for the Security to which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or stolen), a new
Security of the same series and of like tenor and principal amount and bearing a
number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable or is being surrendered for
conversion in full, the Company in its discretion may, instead of issuing a new
Security, pay such Security or coupon or authorize the conversion thereof
(without surrender thereof except in the case of a mutilated Security or
coupon); provided, however, that the principal of and any premium and interest
on Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States.
Upon the issuance of any new Security under this Section, the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees, and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security or in exchange
for a Security to which a destroyed, lost or stolen coupon appertains, shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Security and its coupons, if any, or the
destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and
any such new Security and coupons, if any, shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series and their coupons, if any, 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,
payment or conversion of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Registered Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. Unless otherwise so provided, at the option of the Company,
payment of interest on any Registered Security may be
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made by check mailed on or before the due date to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Any interest on any Registered 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 Registered 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 Registered 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 Registered Securities of such series at the address of
such Holder 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 Registered 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
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be then 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 and Section 305, 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 308. Persons Deemed Owners.
Prior to due presentment of a Registered 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 Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307) 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.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
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Notwithstanding the foregoing, with respect to any Book-Entry Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by a Depository or impair, as between a
Depository and holders of beneficial interests in any Book-Entry Security, the
operation of customary practices governing the exercise of the rights of the
Depository (or its nominee) as Holder of such Book-Entry Security.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
registration of transfer, conversion 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. All Registered Securities and matured coupons so
delivered shall be promptly canceled by the Trustee. All Bearer Securities and
unmatured coupons so delivered shall be held by the Trustee and, upon
instruction by a Company Order, shall be canceled or held for reissuance. Bearer
Securities and unmatured coupons held for reissuance may be reissued only in
replacement of mutilated, lost, stolen or destroyed Bearer Securities of the
same series and like tenor or the related coupons pursuant to Section 306. All
Bearer Securities and unmatured coupons held by the Trustee pending such
cancellation or reissuance shall be deemed to be delivered for all purposes of
this Indenture and the Securities. 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 and coupons held
by the Trustee shall be disposed of in accordance with its customary practice.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 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.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. 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 any right to receive additional
amounts, as provided in Section 1004), 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 and all
coupons, if any, appertaining thereto (other than (i) coupons appertaining
to Bearer Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or has been
waived as provided in Section 305, (ii) Securities and coupons which have
been destroyed, lost or stolen and which have been replaced, converted or
paid as provided in Section 306, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption Date,
whose surrender has been waived as provided in Section 1106, and (iv)
Securities and coupons 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 1003) have been delivered to the Trustee for cancellation; or
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(B) all such Securities and, in the case of (i) or (ii) below, any
coupons appertaining thereto 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 and coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and any 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 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to clause (1)(B) of this Section,
the obligations of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities, the coupons
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.
ARTICLE FIVE
REMEDIES
SECTION 501. 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 the provisions of Article Sixteen hereof or by operation of law or pursuant
to any judgment, decree or order, rule or regulation of any administrative or
governmental body), unless it is either inapplicable to a particular series of
Securities or it is specifically deleted or modified in or pursuant to the terms
of such series or in the form of Security of 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 payment, when and as
due by the terms of a Security of that series; or
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(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
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(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 90
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 the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or
(7) any other Event of Default provided with respect to Securities of
that series.
SECTION 502. 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
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if any of the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities 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,
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(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 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(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, 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 and coupons, the whole amount then due and payable on
such Securities and coupons 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 costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
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 and any
related coupons 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 504. 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, subject to Article Sixteen hereof, 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 607.
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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; provided, however,
that the Trustee may, on behalf of Holders, vote for the election of a trustee
of bankruptcy or similar official and be a member of a creditors' or other
similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.
All rights of action and claims under this Indenture or the Securities or
coupons may be prosecuted and enforced by the Trustee without the possession of
any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. 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 or coupons, or both as the case
may be, 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
607; and
SECOND: Subject to Article Sixteen hereof, to the payment of the
amounts then due and unpaid for principal of and any premium and interest
on the Securities and coupons 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 and coupons for principal and any premium and interest,
respectively.
In any case in which Securities are Outstanding that are denominated in
more than one currency and the Trustee is directed to make ratable payments
under this Section to Holders of such Securities, unless otherwise provided with
respect to any series of Securities, the Trustee shall calculate the amount of
such payments as follows: (i) as of the day the Trustee collects an amount under
this Article, the Trustee shall, as to each Holder of a Security to whom an
amount is due and payable under this Section that is denominated in a foreign
currency, determine that amount in Dollars that would be obtained for the amount
owing such Holder, using the rate of exchange at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York Dollars
with such amount owing; (ii) calculate the sum of all Dollar amounts determined
under (i) and add thereto any amounts due and payable in Dollars; and (iii)
using the individual amounts determined in (i) or any individual amounts due and
payable in Dollars, as the case may be, as a numerator, and the sum calculated
in (ii) as a denominator, calculate as to each Holder of a Security to whom an
amount is owed under this Section the fraction of the amount collected under
this Article payable to such Holder. Any expenses incurred by the Trustee in
actually converting amounts owing Holders of Securities denominated in a
currency other than that in which any amount is collected under this Article
shall be likewise (in accordance with this paragraph) borne ratably by all
Holders of Securities to whom amounts are payable under this Section.
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against the Company in any court it is necessary to convert
the sum due in respect of the principal of, or premium, if any, or interest on,
the Securities of any series (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the Business Day in the City of New York next preceding
that on which final judgment is given. Neither the Company nor the Trustee shall
be liable for any shortfall nor shall it benefit
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from any windfall in payments to Holders of Securities under this Section caused
by a change in exchange rates between the time the amount of a judgment against
the Company is calculated as above and the time the Trustee converts the
Judgment Currency into the Required Currency to make payments under this Section
to Holders of Securities, but payment of such judgment shall discharge all
amounts owed by the Company on the claim or claims underlying such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons 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
(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 such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture (but subject to
Article Sixteen hereof), the Holder of any Security or coupon shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and any premium and (subject to Sections 305 and 307) any interest on such
Security or payment of such coupon on the Stated Maturity or Maturities
expressed in such Security or coupon (or, in the case of redemption, on the
Redemption Date) and, if applicable, to convert such Security as provided in
Article Fifteen and to institute suit for the enforcement of any such payment or
conversion right, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon 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 of Securities and coupons 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 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or
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reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon 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 of Securities or coupons may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
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;
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) the Trustee shall not be obligated to take any action unduly
prejudicial to Holders not joining in such direction or involving the
Trustee in personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of 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 the Securities of 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
Nine 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 514. 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 assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, however, 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.
SECTION 515. 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 to
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
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this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. 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 602. 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
501(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.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) 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;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) 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;
(4) 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;
(5) 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;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its
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discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(7) 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 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the Trustee's
certificates of authentication) and in any coupons shall be taken as the
statements of the Company, and the Trustee or any Authenticating Agent assumes
no responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities or
coupons. The Trustee or any Authenticating Agent shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.
SECTION 605. 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 coupons and, subject
to Sections 608 and 613, 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 606. 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 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee and each predecessor 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 and each predecessor Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of 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.
The obligations of the Company under this Section shall not be subordinated
to the payment of Senior Indebtedness pursuant to Article Sixteen hereof, and as
security for the performance of such obligations, the Trustee shall have a lien
prior to the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities.
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SECTION 608. 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 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal or
State authority. If such corporation 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 corporation 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. No obligor upon any Security
issued under this Indenture or a person directly or indirectly controlling,
controlled by or under common control with such obligor shall serve as Trustee
under this Indenture.
SECTION 610. 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 611.
(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 611 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 608 after written
request therefor by the Company or by any Holder of a Security 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 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or a 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 case, (i) the Company by a Board
Resolution may remove the Trustee with respect to all Securities, or (ii)
subject to Section 514, any Holder of a Security 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 the 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 series and that at any time there shall be only one Trustee with respect
to the
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Securities of any particular series) and shall comply with the applicable
requirements of Section 611. 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 611, 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 of Securities of such series and accepted appointment in the manner
required by Section 611, any Holder of a Security 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. Such court may thereupon, after such notice, if any,
as it may deem proper, appoint a successor Trustee.
(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 in the manner
provided in Section 106. 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.
SECTION 611. 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 further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee, with like effect as
if originally named Trustee hereunder; 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. Any Trustee ceasing to act shall, nevertheless,
retain a prior lien upon all property or funds held or collected by such Trustee
to secure any amounts then due it pursuant to the provisions of Section 607.
(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 as 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
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
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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 successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. 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 613. 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 614. Appointment of Authenticating Agent.
The Trustee may, by an instrument in writing, appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which may be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon original issue or upon exchange, registration of transfer or
partial redemption thereof or pursuant to Section 306, 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. 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 (or, if Bearer
Securities, organized and doing business under the laws of the country in which
the Bearer Securities are eligible), 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 (or, if Bearer Securities, an authority of the country in which the
Bearer Securities are eligible). 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 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 such Authenticating Agent, shall continue to be an
Authenticating Agent, provided such
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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 such Authenticating Agent.
An Authenticating Agent may, and if it shall cease to be eligible shall,
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 notice of resignation or upon such 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 Registered Securities, if any, 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 Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payment, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have been endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
FIRST TRUST OF ILLINOIS, NATIONAL
ASSOCIATION,
As Trustee
By:
--------------------------------------
As Authenticating Agent
By:
--------------------------------------
Authorized Officer."
If all the Securities of a series may not be originally issued at one time,
and if the Company has an Affiliate eligible to be appointed as an
Authenticating Agent hereunder or the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested by the Company in writing (which
writing need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel), shall appoint in accordance with this Section an
Authenticating Agent (which, if so requested by the Company, shall be such
Affiliate of the Company) having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
With respect to each series of Securities, the Company will furnish or
cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after a Regular Record Date,
a list, in such form as the Trustee may reasonably require, containing all
the information in the possession or control of the Company, or any of its
Paying Agents other than the Trustee, as to the names and addresses of the
Holders of Securities as of the immediately preceding Regular Record Date,
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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. 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 701, 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 701 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 or coupons, 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 and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) On or before August 1 in each year following the date hereof, 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.
(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 704. Reports by Company.
In addition to the certificates delivered to the Trustee pursuant to
Section 1007, the Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided, however, that
any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. 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, unless:
(1) 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 or trust, 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 (including all additional
amounts, if any, payable pursuant to Section 1004) on all the Securities
and the performance or observance of every other 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 which becomes an obligation of the Company or a Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event 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; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 802. 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
801, 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 thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities and coupons and may liquidate and
dissolve.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities pursuant to Article Eight; 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
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(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the Holders of Securities of any series or any
related coupons in any material respect; 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 (A) shall neither (i) 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 (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) to provide for adjustment of conversion rights pursuant to Section
1505 hereof; or
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301; 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 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be defective or
inconsistent with any other provision herein or in any supplemental
indenture, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided, however, that such action
shall not adversely affect the interests of the Holders of Securities of
any series or any related coupons in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of 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 and any related coupons 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 any premium payable upon
the redemption thereof, or change the Redemption Date thereof, or change
any obligation of the Company to pay additional amounts pursuant to Section
1004 (except as contemplated by Section 801(1) and permitted by Section
901(1)), 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 502 or change the
coin or currency in which any Security or any premium or interest thereon
is payable, or change any right of redemption, purchase or repayment by the
Company at the option of the Holder, or adversely affect the right to
convert Securities, if applicable, or impair the right to institute suit
for the enforcement of (x) any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date) or
(y) any conversion right with respect to any Security, or
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(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 reduce the requirements of Section 1404 for quorum or voting,
or
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 1002, or
(4) modify any of the provisions of this Section, Section 513 or
Section 1008 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 of a Security or coupon with respect to changes
in the references to "the Trustee" and concomitant changes in this Section
and Section 1008 or the deletion of this provision, in accordance with the
requirements of Sections 611(b) and 901(8).
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 of Securities 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 903. 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 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. 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
and of any coupons appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. 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 and of like tenor.
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SECTION 907. Subordination Unimpaired.
This Indenture may not be amended to alter the subordination of any
Outstanding Securities without the written consent of each holder of Senior
Indebtedness then outstanding that would be adversely affected thereby.
ARTICLE TEN
COVENANTS
SECTION 1001. 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, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series of
Securities, any interest due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment or, if applicable, for conversion, 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. If Securities of a series are issuable as Bearer
Securities, the Company will maintain (A) in the Borough of Manhattan, The City
of New York, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment or, if applicable, for conversion,
where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise), (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Securities of that series pursuant to Section 1004) or, if
applicable, for conversion; provided, however, that if the Securities of that
series are listed on The International Stock Exchange of the United Kingdom and
the Republic of Ireland Limited, the Luxembourg Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent for the Securities of that
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed on such exchange, and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United States
an office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for 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 and prompt notices to the
Holders as provided in Section 106 of the location, and any change in the
location, of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency in respect of any series of
Securities or shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Securities of that series may be made and
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, except that Bearer Securities of that series and the related coupons
may be presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series pursuant to
Section 1004) or, if applicable, for conversion at any Paying Agent for such
series located outside the United States, and the Company hereby appoints the
same as its agents to receive such respective presentations, surrenders, notices
and demands.
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No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States, provided, however, that, if
the Securities of a series are denominated and payable in Dollars payment of
principal of and any premium and interest on any Bearer Security (including any
additional amounts payable on Securities of such series pursuant to Section
1004) shall be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment in Dollars of the
full amount of such principal, premium, interest or additional amounts, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other offices
or agencies where 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 so maintain an office or
agency in accordance with the requirements set forth above for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee and the Holders of any such designation or rescission and of any other
change in the location of any such other office or agency.
SECTION 1003. 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 and 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 or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure to so act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of and any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay the principal and any premium or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure to so act.
The Company will cause each Paying Agent for any series of Securities
(other than the Company or 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 and any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request (unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law), or (if then held by the Company) shall be discharged from such trust; and
the Holder of such Security or any coupon appertaining thereto shall (unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law) thereafter,
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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 an Authorized Newspaper in each Place of Payment, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. Additional Amounts.
If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto additional amounts as provided therein. Whenever
in this Indenture there is mentioned, in any context, the payment of the
principal of or any premium or interest on, or in respect of, any Security of
any series or payment of any related coupon or the net proceeds received on the
sale or exchange of any Security of any series, such mention shall be deemed to
include mention of the payment of additional amounts provided for in this
Section to the extent that, in such context, additional amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or coupons and the Company will
pay to the Trustee or such Paying Agent the additional amounts required by this
Section. The Company covenants to indemnify the Trustee and any Paying Agent
for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section.
SECTION 1005. Purchase of Securities by Company or Subsidiary.
If and so long as the Securities of a series are listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
Limited and such stock exchange shall so require, the Company will not, and will
not permit any of its Subsidiaries to, purchase any Securities of that series by
private treaty at a price (exclusive of expenses and accrued interest) which
exceeds 120% of the mean of the nominal quotations of the Securities of that
series as shown in The Stock Exchange Daily Official List for the last trading
day preceding the date of purchase.
SECTION 1006. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
the Trustee, will appoint, in the manner provided in Section 610, a Trustee, so
that there shall at all times be a Trustee hereunder.
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SECTION 1007. Statement by Officer as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For purposes
of this Section 1007, such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 1005 or any covenant added hereto
pursuant to Section 901(2) (unless otherwise provided in the supplemental
indenture adding such covenant hereto) with respect to the Securities of any
series if before the time for such compliance the Holders of 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 ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. 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 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In the case of any redemption at the election of the Company
of less than all the Securities of any series, the Company shall, at least 45
days 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 of such series to be redeemed. In
the case of any redemption of Securities (i) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, or (ii) pursuant to an election of the Company
which is subject to a condition specified in the terms of such Securities, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction or condition.
SECTION 1103. Selection 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 of a specified tenor are to be redeemed)
the particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Company or the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Company or 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 Registered Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series or of the principal amount of global Securities of such 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 45 days prior to the Redemption Date by the Company or the Trustee, from
the Outstanding Securities of such series and specified tenor not previously
called for redemption in accordance with the preceding sentence.
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The Company or the Trustee, as the case may be, shall promptly notify the
other 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.
If any Security selected for partial redemption is surrendered for conversion
after such selection, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Upon any redemption of
less than all the Securities of a series, for purposes of selection for
redemption the Company and the Trustee may treat as Outstanding Securities
surrendered for conversion during the period of 15 days next preceding the
mailing of a notice of redemption, and need not treat as Outstanding any
Security authenticated and delivered during such period in exchange for the
unconverted portion of any Security converted in part during such period.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106
to the Holders of Securities to be redeemed not less than 30 for more than 45
days prior to the Redemption Date.
All notices of redemption 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, and that on and after the Redemption Date, upon surrender of the
Securities, new Securities of such series in principal amount equal to the
unredeemed part thereof will be issued,
(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, together in the case of
Bearer Securities with all coupons appertaining thereto, if any, maturing
after the Redemption Date, are to be surrendered for payment of the
Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case,
and
(7) if applicable, the Conversion Price then in effect and the date on
which the right to convert the Securities or portions thereof to be
redeemed will expire.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
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 1105. Deposit of Redemption Price.
On or prior to 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 1003) 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. If any Security called for redemption is
converted pursuant hereto, any money deposited with the Trustee or any Paying
Agent or so segregated and held in trust for the redemption of such Security
shall be paid to the
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Company upon delivery of a Company Request to the Trustee or such Paying Agent,
or, if then held by the Company, shall be discharged from such trust.
SECTION 1106. 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 and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons for
such interest, and provided, further, that, unless otherwise specified as
contemplated by Section 301, installments of interest on Registered Securities
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 Record Dates
according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency located
outside the United States (except as otherwise provided in Section 1002) and,
unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those coupons.
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 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment thereof (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 Registered 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.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. 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 301 for Securities of such series.
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The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". 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 1202. 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 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been (x) converted
into Common Stock or (y) 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 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee a Company Order
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 1202 and will also deliver to the Trustee any Securities to be so
credited. Not less than 30 days before each such sinking fund payment date the
Company or the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 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 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may at its option by Board Resolution, at any time, elect to
have either Section 1302 or Section 1303 applied to the Outstanding Securities
of any series upon compliance with the conditions set forth below in this
Article Thirteen.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, the Company shall be deemed to have been discharged
from its obligations with respect to the Outstanding Securities of any series
(other than any convertible series) on the date the conditions set forth below
are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series and to
have satisfied all its other obligations under the Securities of such series and
this Indenture insofar as the Securities of such series 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 hereunder: (A) the rights of Holders of the
Securities of such series to
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receive, solely from the trust fund described in Section 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on the Securities of such series when such payments are
due, (B) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002, 1003 and 1004, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (D) this Article Thirteen.
Subject to compliance with this Article Thirteen, the Company may exercise its
option under this Section 1302 notwithstanding the prior exercise of its option
under Section 1303.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, (i) the Company shall be released from its
obligations with respect to the Securities of such series under Sections 801 and
1005 and any covenant added to this Indenture pursuant to Section 901(2) hereof,
and (ii) the occurrence of an event specified in Section 501(4) (with respect to
Sections 801 and 1005 and any covenant added to this Indenture pursuant to
Section 901(2) hereof) shall not be deemed to be an Event of Default on and
after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"), but the remainder of this Indenture and such Securities
shall be unaffected thereby. For this purpose, such covenant defeasance means
that 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 covenant
(to the extent so specified in the case of Section 501(4)), whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
covenant or by reason of any reference in any such Section or clause to any
other provision herein or 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 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 1302
or Section 1303 to the then Outstanding Securities of any series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 609 who shall agree to comply with the provisions of this
Article Thirteen 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 the Securities of such
series, (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, 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, if any) and each installment of interest on the
Securities and any coupons pertaining thereto on the Stated Maturity of
such principal (and premium, if any) or installment of interest in
accordance with the terms of this Indenture and of the Securities of such
series. 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 include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act of 1933) 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 depository 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 depository receipt.
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(2) In the case of an election under Section 1302, 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
deposit, defeasance and discharge 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 deposit, defeasance and discharge had not occurred.
(3) In the case of an election under Section 1303, 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
gain or loss for Federal income tax purposes as a result of such deposit
and covenant defeasance and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would have been
the case if such deposit and covenant defeasance had not occurred.
(4) 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 on the date of such
deposit or, insofar as subsections 501(5) and (6) are concerned, at any
time during the period ending on the 121st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(5) Such defeasance or covenant defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act with respect to any securities of the Company.
(6) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(7) 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 1302
or the covenant defeasance under Section 1303 (as the case may be) have
been complied with.
(8) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as
defined in the Investment Company Act of 1940, or such trust shall be
qualified under such Act or exempt from regulation thereunder.
SECTION 1305. 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 1003, 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 1305, the "Trustee") pursuant to Section 1304 in respect of the
Securities of such series shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities of such series and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of the Securities of such series, 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 U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article Thirteen 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
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provided in Section 1304 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 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1302 or 1303 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to this Article Thirteen until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1302 or 1303; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of the Securities of such series to receive such payment from the
money held by the Trustee or the Paying Agent.
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1402. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1401, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or in
London as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more than 120
days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in principal amount of the Outstanding Securities of any
series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1401, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1403. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders a Person shall (a) be a
Holder of one or more Securities or (b) be a Person appointed by an instrument
in writing as proxy by a Holder of one or more Securities. The only Persons who
shall be entitled to be present or to speak at any meeting of Holders shall be
the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
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SECTION 1404. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1402(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Securities of such series which shall constitute a quorum.
Except as limited by Section 512 or the proviso to the first paragraph of
Section 902, any resolution presented to a meeting (or adjourned meeting duly
reconvened at which a quorum is present as aforesaid) may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting (or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid) by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
To the extent consistent with the terms of this Indenture, any resolution
passed or decision taken at any meeting of Holders of Securities of any series
duly held in accordance with this Section shall be binding on all the Holders of
Securities of such series and the related coupons, whether or not present or
represented at the meeting.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1402(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of the Outstanding
Securities of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Security of such series or proxy.
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(d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 1402 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
SECTION 1406. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1404. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE FIFTEEN
CONVERSION OF SECURITIES
SECTION 1501. Applicability of Article.
The provisions of this Article shall be applicable to the Securities of any
series which are convertible into Common Stock or, if so provided in a Board
Resolution, Officers' Certificate or executed supplemental indenture referred to
in Sections 201 and 301 by or pursuant to which the form and terms of the
Securities of such series were established, cash in lieu thereof, as and to the
extent provided by the terms of the Securities of such series.
SECTION 1502. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security to the Conversion Agent at any
time during usual business hours at its office or agency maintained for the
purpose as provided in this Indenture, accompanied by a fully executed written
notice, in substantially the form set forth on the reverse of the Security, that
the Holder elects to convert such Security or a stated portion thereof
constituting a multiple of $1,000 in principal amount, and, if such Security is
surrendered for conversion during the period between the close of business on
any record date for such Security and the opening of business on the related
Interest Payment Date and has not been called for redemption on a Redemption
Date within such period (or on such Interest Payment Date), accompanied also by
payment of an amount equal to the interest payable on such Interest Payment Date
on the portion of the principal amount of the Security being surrendered for
conversion. Such notice shall also state the name or names (and address) in
which the certificate or certificates for shares of Common Stock shall be issued
(or to whom payment in cash in lieu of Common Stock shall be made). Securities
surrendered for conversion shall (if so required by the Company or the
Conversion Agent) be duly endorsed by, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and the
Conversion Agent duly executed by, the Holder or his attorney duly authorized in
writing. As promptly as practicable after the receipt of such notice and the
surrender of such Security as aforesaid, the Company shall, subject to the
provisions of Section 1507, issue and deliver at such office or agency to such
Holder, or on his written order, a certificate or certificates for the number of
full shares of Common Stock issuable on conversion of such Security in
accordance with the provisions of such Security and cash, as provided in Section
1503, in respect
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of any fraction of a share of Common Stock otherwise issuable upon such
conversion or, if so provided in a Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 201 and 301 by or
pursuant to which the form and terms of the Securities of such series were
established, cash in lieu of shares of Common Stock. Such conversion shall be at
the Conversion Price in effect, and shall be deemed to have been effected,
immediately prior to the close of business on the date (herein called the "Date
of Conversion") on which such notice in proper form shall have been received by
the Conversion Agent and such Security shall have been surrendered as aforesaid,
and the Person or Persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable, if any, upon such conversion shall
be deemed to have become on the Date of Conversion the holder or holders of
record of the shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Company shall be
closed shall constitute the Person or Persons in whose name or names the
certificate or certificates for such shares are to be issued, if any, as the
record holder or holders thereof for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open but such
conversion shall nevertheless be at the Conversion Price in effect at the close
of business on the date when such Security shall have been so surrendered with
the conversion notice in proper form. In the case of conversion of a portion,
but less than all, of a Security, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder thereof, at the expense of the
Company, a Security or Securities in the aggregate principal amount of the
unconverted portion of the Security surrendered. Except as otherwise expressly
provided in this Indenture, no payment or adjustment shall be made for interest
accrued on any Security (or portion thereof) converted or for dividends or
distributions on any Common Stock issued upon conversion of any Security. The
right, if any, of a Holder of any Security to cause the Company to redeem,
purchase or repay such Security shall terminate upon receipt by the Company of
any notice of conversion of such Security.
SECTION 1503. Fractional Interests.
No fractions of shares or scrip representing fractions of shares shall be
issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities so surrendered. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 1503, be issuable on the conversion of any Security or Securities, the
Company shall make payment in lieu thereof in cash equal to the value of such
fraction computed on the basis of the Last Sale Price of one share of Common
Stock on the most recent Trading Day prior to the Date of Conversion. "Last Sale
Price" on any Trading Day shall mean (i) the closing price regular way (or, if
no closing price is reported the average of the bid and asked prices) as
reported on the New York Stock Exchange Composite Tape, or (ii) if on such
Trading Day the Common Stock is not listed or admitted to trading on such
exchange, the closing price regular way (or, if no closing price is reported the
average of the bid and asked prices) on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or (iii) if
not listed or admitted to trading on any national securities exchange on such
Trading Day, then the average of the closing bid and asked prices as reported
through the National Association of Securities Dealers, Inc. on its NASDAQ
National Market or other NASDAQ market or through a similar organization if
NASDAQ is no longer reporting information, or (iv) if the Common Stock is not
listed or admitted to trading on any national securities exchange or quoted on
such National Market or other NASDAQ market on such Trading Day, then the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose or (v) if not quoted by any such organization on
such Trading Day, the fair value of such Common Stock on such Trading Day, as
determined by the Board of Directors. The term "Trading Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which
securities are not traded on any of the above mentioned exchanges or in such
markets.
SECTION 1504. Adjustment of Conversion Price.
The conversion price or rate (herein called the "Conversion Price") for a
series of Securities shall be as set forth in a Board Resolution, Officers'
Certificate or executed supplemental indenture referred to in
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Sections 201 and 301 by or pursuant to which the form and terms of the
Securities of such series were established, and, except as otherwise provided
therein, shall be subject to adjustment from time to time as follows:
(a) In case the Company shall (1) pay a dividend or make a
distribution in shares of Common Stock on the Common Stock, (2) subdivide
its outstanding shares of Common Stock into a greater number of shares, (3)
combine its outstanding shares of Common Stock into a smaller number of
shares or (4) issue by reclassification of its Common Stock any shares of
capital stock of the Company, the Conversion Price in effect immediately
prior to such action shall be adjusted so that the Holder of any Security
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other capital stock of the Company
which he would have owned immediately following such action had such
Security been converted immediately prior thereto. An adjustment made
pursuant to this subsection (a) shall become effective immediately, except
as provided in subsection (e) below, after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
reclassification. If as a result of an adjustment made pursuant to this
subsection (a), the Holder of any Security thereafter surrendered for
conversion shall become entitled to receive shares of two or more classes
of capital stock (including shares of Common Stock and other capital stock)
of the Company, the Board of Directors (whose determination shall be
conclusive and shall be described in a statement filed with the Trustee)
shall determine the allocation of the adjusted Conversion Price between or
among shares of such classes of capital stock or shares of Common Stock and
other capital stock.
(b) In case the Company shall issue rights or warrants to all holders
of Common Stock entitling them (for a period not exceeding 45 days from the
date of such issuance) to subscribe for or purchase shares of Common Stock
at a price per share less than the current market price per share (as
determined pursuant to subsection (d) below) of the Common Stock on the
record date mentioned below, the Conversion Price shall be adjusted to a
price, computed to the nearest cent, so that the same shall equal the price
determined by multiplying;
(1) the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction, of which
(2) the numerator shall be (A) the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus (B) the number of shares which
the aggregate offering price of the total number of shares so offered
for subscription or purchase would purchase at such current market price
(determined by multiplying such total number of shares by the exercise
price of such rights or warrants and dividing the product so obtained by
such current market price), and of which
(3) the denominator shall be (A) the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus (B) the number of additional
shares of Common Stock which are so offered for subscription or
purchase.
Such adjustment shall become effective immediately, except as provided in
subsection (e) below, after the record date for the determination of
holders entitled to receive such rights or warrants.
(c) In case the Company shall distribute to substantially all holders
of Common Stock evidences of indebtedness, equity securities (including
equity interests in the Company's Subsidiaries) other than Common Stock, or
other assets (other than cash dividends paid out of surplus of the
Company), or shall distribute to substantially all holders of Common Stock
rights or warrants to subscribe for securities (other than those referred
to in subsection (b) above) then in each such case the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of
such distribution by a fraction of which the numerator shall be the current
market price per share (determined as provided in subsection (d) below) of
the Common Stock on the record date mentioned below less the then fair
market value (as determined by the Board of Directors, whose determination
shall, if made in good faith, be conclusive evidence of such fair market
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value) of the portion of the assets so distributed or of such subscription
rights or warrants applicable to one share of Common Stock, and of which
the denominator shall be such current market price per share of the Common
Stock. Such adjustment shall become effective immediately, except as
provided in subsection (e) below, after the record date for the
determination of stockholders entitled to receive such distribution.
(d) For the purposes of any computation under subsections (b) and (c)
above, the current market price per share of Common Stock on any date shall
be deemed to be the average of the Last Sale Prices for the 30 consecutive
Trading Days commencing 45 Trading Days before the date in question.
(e) In any case in which this Section 1504 shall require that an
adjustment be made immediately following a record date, the Company may
elect to defer the effectiveness of such adjustment (but in no event until
a date later than the effective time of the event giving rise to such
adjustment), in which case the Company shall, with respect to any Security
converted after such record date and before such adjustment shall have
become effective, (i) defer paying any cash payment pursuant to Section
1503 or issuing to the Holder of such Security the number of shares of
Common Stock and other capital stock of the Company issuable upon such
conversion in excess of the number of shares of Common Stock and other
capital stock of the Company issuable thereupon only on the basis of the
Conversion Price prior to adjustment and (ii), not later than five Business
Days after such adjustment shall have become effective, pay to such Holder
the appropriate cash payment pursuant to Section 1503 and issue to such
Holder the additional shares of Common Stock and other capital stock of the
Company issuable on such conversion.
(f) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% of the
Conversion Price; provided, however, that any adjustments which by reason
of this subsection (f) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment and, provided, further,
that adjustment shall be required and made in accordance with the
provisions of this Article Fifteen (other than this subsection (f)) not
later than such time as may be required in order to preserve the tax-free
nature of a distribution to the holders of Securities or Common Stock. All
calculations under this Article Fifteen shall be made to the nearest cent
or to the nearest one-hundredth of a share, as the case may be.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly (i) file with the Trustee and each Conversion Agent
an Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) give or cause to be given a notice
of such adjustment to each Holder of Securities in the manner provided in
Section 106.
Anything in this Section 1504 to the contrary notwithstanding, the Company shall
be entitled to make such reductions in the Conversion Price, in addition to
those required by this Section 1504, as it in its discretion shall determine to
be advisable in order that any stock dividend, subdivision of shares,
distribution of rights or warrants to purchase stock or securities, or
distribution of other assets (other than cash dividends) hereafter made by the
Company to its stockholders shall not be taxable.
SECTION 1505. Continuation of Conversion Privilege in Case of Merger,
Consolidation or Sale of Assets.
If any of the following shall occur, namely: (a) any consolidation or
merger of the Company as a result of which the holders of Common Stock shall be
entitled to receive stock, other securities or other assets (including cash)
with respect to or in exchange for Common Stock; or (b) any conveyance, transfer
or lease of the properties and assets of the Company substantially as an
entirety to any Person, then the Company, or such successor or purchasing
Person, as the case may be, shall, as a condition precedent to such
consolidation, merger, conveyance, transfer or lease, execute and deliver to the
Trustee a supplemental indenture (which shall conform to the Trust Indenture
Act) providing that the Holder of each convertible Security then Outstanding
shall have the right to convert such Security into the kind and amount of shares
of stock and other securities and property (including cash) receivable upon or
in connection with such consolidation,
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<PAGE> 59
merger, conveyance, transfer or lease by a holder of the number of shares of
Common Stock issuable upon conversion of such Security immediately prior to such
consolidation, merger, conveyance, transfer or lease. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article Fifteen. If,
in the case of any such consolidation, merger, conveyance, transfer or lease,
the stock or other securities and property (including cash) receivable thereupon
or in connection therewith by a holder of shares of Common Stock includes shares
of stock or other securities and property (including cash) of a Person other
than the successor or purchasing Person, as the case may be, in such
consolidation, merger, conveyance, transfer or lease, then such supplemental
indenture shall also be executed by such other Person and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors shall reasonably consider necessary by reason of the
foregoing. The provisions of this Section 1505 shall similarly apply to
successive consolidations, mergers, conveyances, transfer or leases.
Notice of the execution of each such supplemental indenture shall be given
to each Holder of Securities in the manner provided in Section 106.
Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such consolidation,
merger, conveyance, transfer or lease or to any adjustment to be made with
respect thereto, but, subject to the provisions of Sections 601 and 603, may
accept as conclusive evidence of the correctness of any such provision, and
shall be protected in relying upon, the Officers' Certificate (which the Company
shall be obligated to file with the Trustee prior the execution of any such
supplemental indenture) with respect thereto.
SECTION 1506. Notice of Certain Events.
If:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Common Stock otherwise than in cash; or
(b) the Company shall authorize the granting to all holders of Common
Stock of rights to subscribe for or purchase any shares of stock of any
class or of any other rights; or
(c) the Company shall authorize any reclassification or change of the
Common Stock (other than a subdivision or combination of its outstanding
shares of Common Stock), or any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required, or the conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety; or
(d) there shall be authorized or ordered any voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in Section 1002, and
shall cause to be given to each Holder of Securities, in the manner provided in
Section 106, at least 20 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that more than one date
is specified), a notice stating the date on which (1) a record is expected to be
taken for the purpose of such dividend, distribution or rights, or if a record
is not to be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution or rights are to be determined, or
(2) such reclassification, change, consolidation, merger, conveyance, transfer
or lease, dissolution, liquidation or winding-up is expected to become effective
and the date, if any is to be fixed, as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
change, consolidation, merger, conveyance, transfer or lease, dissolution,
liquidation or winding-up.
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SECTION 1507. Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
(or payment of cash in lieu thereof to a Person other than such Holder) and no
such issue or delivery (or payment) shall be made unless and until the Person
requesting such issue or delivery (or payment) has paid to the Company the
amount of any such tax or has established, to the satisfaction of the Company,
that such tax has been paid. The Company extends no protection with respect to
any other taxes imposed in connection with conversion of Securities.
SECTION 1508. Company to Provide Stock.
The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of convertible Securities from time to time as such Securities are presented for
conversion, provided, however, that nothing contained herein shall be construed
to preclude the Company from satisfying its obligations in respect of the
conversion of Securities by delivery of repurchased shares of Common Stock which
are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Securities hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be; provided, however, that nothing in
this Section 1508 shall be deemed to affect in any way the obligations of the
Company to convert Securities into Common Stock as provided in this Article
Fifteen.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the opinion of counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and non-assessable
by the Company and free of preemptive rights.
SECTION 1509. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee, any Conversion Agent nor any agent of either shall at
any time be under any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the Officers' Certificate referred to in
Section 1504(g), or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. Neither the
Trustee, any Conversion Agent nor any agent of either shall be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property (including cash), which may at any time
be issued or delivered upon the conversion of any Security, and neither the
Trustee, any Conversion Agent nor any agent of either makes any representation
with respect thereto. Neither the Trustee, any Conversion Agent nor any agent of
either shall be responsible for any failure of the Company to issue, register
the transfer of or deliver any shares of Common Stock or stock certificates or
other securities or property (including cash) upon the surrender of any Security
for the purpose of conversion or, subject to Sections 601 and 603, to comply
with any of the covenants of the Company contained in this Article Fifteen.
SECTION 1510. Return of Funds Deposited for Redemption of Converted Securities.
Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any Paying Agent for the purpose of paying the
principal of and interest, if any, on any of the Securities and
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which shall not be required for such purposes because of the conversion of such
Securities, as provided in this Indenture, shall forthwith after such conversion
be repaid to the Company by the Trustee or such Paying Agent.
ARTICLE SIXTEEN
SUBORDINATION
SECTION 1601. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees that anything in this Indenture to the
contrary notwithstanding, the indebtedness evidenced by the Securities of each
series is subordinate and junior in right of payment to all Senior Indebtedness
to the extent provided herein or, if so provided in a Board Resolution,
Officers' Certificate or executed supplemental indenture referred to in Sections
201 and 301 by or pursuant to which the form and terms of the Securities of such
series were established, as and to the extent provided by the terms of the
Securities of such series, and each Holder of Securities of each series, by his
acceptance thereof, likewise covenants and agrees to the subordination herein or
therein provided and shall be bound by the provisions hereof or thereof.
Subject to Section 1604, if the Company shall default in the payment of any
principal of or premium or interest on any Senior Indebtedness when the same
becomes due and payable, whether at Stated Maturity or at a date fixed for
redemption or by declaration of acceleration or otherwise, then, upon written
notice of such default to the Company by the holders of such Senior Indebtedness
or any trustee therefor, unless and until such default shall have been cured or
waived or shall have ceased to exist, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made on account of the principal of or any premium or interest on any of the
Securities, or in respect of any redemption, retirement, purchase or other
acquisition of any of the Securities other than those made in capital stock of
the Company (or cash in lieu of fractional shares thereof) pursuant to Article
Fifteen or otherwise made in capital stock of the Company (or cash in lieu of
fractional shares thereof).
If (a) without the consent of the Company a court having jurisdiction shall
enter an order for relief with respect to the Company under the Bankruptcy Code
or without the consent of the Company a court having jurisdiction shall enter a
judgment, order or decree adjudging the Company a bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Company under the Bankruptcy Code or
applicable state insolvency law, or (b) the Company shall institute proceedings
for entry of an order for relief with respect to the Company under the
Bankruptcy Code or for an adjudication of insolvency, or shall consent to the
institution of bankruptcy or insolvency proceedings against it, or shall file a
petition seeking, or seek or consent to reorganization, arrangement, composition
or relief under the Bankruptcy Code or any applicable State law, or shall
consent to the filing of such petition or to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator or similar official of
the Company or of substantially all of its property, or the Company shall make a
general assignment for the benefit of creditors as recognized under the
Bankruptcy Code, then all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) shall first be paid in
full before any payment or distribution, whether in cash, securities or other
property, shall be made to any Holder of any Securities on account thereof. Any
payment or distribution, whether in cash, securities or other property (other
than securities of the Company or any other corporation provided for by a plan
of reorganization or readjustment the payment of which is subordinate, at least
to the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), which would otherwise
(but for these subordination provisions) be payable or deliverable in respect of
the Securities of any series shall be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) shall have been paid in
full. In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the Holders of the Securities,
together with the holders of any other obligations of the Company
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ranking on a parity with the Securities, shall be entitled to be paid from the
remaining assets of the Company the amounts at the time due and owing on account
of unpaid principal of and any premium and interest on the Securities and such
other obligations before any payment or other distribution, whether in cash,
property or otherwise, shall be made on account of any capital stock or any
obligations of the Company ranking junior to the Securities and such other
obligations.
If, notwithstanding the foregoing, any payment or distribution of any
character, whether in cash, securities or other property (other than securities
of the Company or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), shall be received by the Trustee or any
Holder in contravention of any of the terms hereof, such payment or distribution
shall be received in trust for the benefit of, and shall be paid over or
delivered and transferred to, the holders of the Senior Indebtedness then
outstanding in accordance with the priorities then existing among such holders
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all such Senior Indebtedness in full. In the event
of the failure of the Trustee or any Holder to endorse or assign any such
payment, distribution or security, each holder of Senior Indebtedness is hereby
irrevocably authorized to endorse or assign the same.
No present or future holder of any Senior Indebtedness shall be prejudiced
in the right to enforce subordination of the indebtedness evidenced by the
Securities by any act or failure to act on the part of the Company. Nothing
contained herein shall impair, as between the Company and the Holders of
Securities of each series, the obligation of the Company to pay to such Holders
the principal of and any premium and interest on such Securities or prevent the
Trustee or the Holder from exercising all rights, powers and remedies otherwise
permitted by applicable law or hereunder upon a default or Event of Default
hereunder, all subject to the rights of the holders of the Senior Indebtedness
to receive cash, securities or other property otherwise payable or deliverable
to the Holders.
Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash, securities or other property equal
to the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, the Holders of Securities of each series shall
be subrogated to all rights of any holders of Senior Indebtedness to receive any
further payments or distributions applicable to the Senior Indebtedness until
the indebtedness evidenced by the Securities of such series shall have been paid
in full, and such payments or distributions received by such Holders, by reason
of such subrogation, of cash, securities or other property which otherwise would
be paid or distributed to the holders of Senior Indebtedness, shall, as between
the Company and its creditors other than the holders of Senior Indebtedness, on
the one hand, and such Holders, on the other hand, be deemed to be a payment by
the Company on account of Senior Indebtedness, and not on account of the
Securities of such series.
The provisions of this Section 1601 shall not impair any rights, interests,
remedies or powers of any secured creditor of the Company in respect of any
security interest the creation of which is not prohibited by the provisions of
this Indenture.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities of ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
SECTION 1602. Reliance on Certificate of Liquidating Agent; Further Evidence as
to Ownership of Senior Indebtedness.
Upon any payment or distribution of assets of the Company, the Trustee and
the Holders shall be entitled to rely upon an order or decree issued by any
court of competent jurisdiction in which such dissolution or winding-up or
liquidation or reorganization or arrangement proceedings are pending or upon a
certificate of the trustee in bankruptcy, receiver, assignee for the benefit of
creditors or other Person making such payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the
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Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Sixteen. In the absence of any such bankruptcy trustee, receiver, assignee or
other Person, the Trustee shall be entitled to rely upon a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
or representative on behalf of such holder) as evidence that such Person is a
holder of Senior Indebtedness (or is such a trustee or representative). If the
Trustee determines, in good faith, that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article Sixteen, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, as to the extent to which such Person is entitled to participate in such
payment or distribution, and as to other facts pertinent to the rights of such
Person under this Article Sixteen, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 1603. Payment Permitted If No Default.
Nothing contained in this Article Sixteen shall prevent (a) the Company at
any time, except during the pendency of any default in the payment of any
principal of or premium or interest on any Senior Indebtedness as described in
Section 1601 or of any of the events described in clauses (a) and (b) of Section
1601, from making payments of the principal of or any premium or interest on the
Securities, or (b) the application by the Trustee or any Paying Agent of any
moneys deposited with it hereunder to payments of the principal of or any
premium or interest, on the Securities, unless and until the Trustee or such
Paying Agent, as the case may be, shall have timely received the Officers'
Certificate or written notice provided for in Section 1605.
SECTION 1604. Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Company to make any payment on or under any Senior
Indebtedness, other than any Senior Indebtedness as to which the provisions of
this Section 1604 shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed, guaranteed or otherwise
created such Senior Indebtedness, shall not be deemed a default under Section
1601 if (i) the Company shall be disputing its obligation to make such payment
or perform such obligation, and (ii) either (A) no final judgment relating to
such dispute shall have been issued against the Company which is in full force
and effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party may
seek further appeal or review, or (B) in the event of a judgment that is subject
to further review or appeal has been issued, the Company shall in good faith be
prosecuting an appeal or other proceeding for review, and a stay of execution
shall have been obtained pending such appeal or review.
SECTION 1605. Trustee Not Charged with Knowledge of Prohibition.
Anything in this Article Sixteen or elsewhere in this Indenture contained
to the contrary notwithstanding, the Trustee shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment of moneys to or by Trustee and shall be entitled to assume
conclusively that no such facts exist and that no event specified in clauses (a)
and (b) of Section 1601 has happened, unless and until the Trustee shall have
received an Officers' Certificate to that effect or notice in writing to that
effect signed by or on behalf of the holder or holders, or their
representatives, of Senior Indebtedness who shall have been certified by the
Company or otherwise established to the reasonable satisfaction of the Trustee
to be such holder or holders or representatives or from any trustee under any
indenture pursuant to which such Senior Indebtedness shall be outstanding;
provided, however, that, if the Trustee shall not have received the Officers'
Certificate or notice provided for in this Section 1605 at least three Business
Days preceding the date upon which by the terms hereof any such moneys may
become payable for any purpose (including, without limitation, the payment of
the principal of or any premium or interest on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and apply the same to the purpose for
which they were received and shall not be affected by any notice to the contrary
which may be received by it within three Business Days preceding such date. The
Company shall give prompt written notice to the Trustee and to each Paying Agent
of any facts which would prohibit
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any payment of moneys to or by the Trustee or any Paying Agent, and the Trustee
shall not be charged with knowledge of the curing of any default or the
elimination of any other fact or condition preventing such payment or
distribution unless and until the Trustee shall have received an Officers'
Certificate to such effect.
SECTION 1606. Trustee to Effectuate Subordination.
Each Holder of Securities by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as between such Holder and holders of Senior
Indebtedness as provided in this Article Sixteen and appoints the Trustee its
attorney-in-fact for any and all such purposes.
SECTION 1607. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article
Sixteen with respect to any Senior Indebtedness which may at the time be held by
it, to the same extent as any other holder of Senior Indebtedness and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article Sixteen shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1608. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article Sixteen shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if the Paying Agent
were named in this Article Sixteen in addition to or in place of the Trustee;
provided, however, that Sections 1605 and 1607 shall not apply to the Company if
its acts as Paying Agent.
SECTION 1609. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of Senior Indebtedness may, at any time
or from time to time and in their absolute discretion, change the manner, place
or terms of payment, change or extend the time of payment of, or renew or alter,
any such Senior Indebtedness, or amend or supplement any instrument pursuant to
which any such Senior Indebtedness is issued or by which it may be secured, or
release any security therefor, or exercise or refrain from exercising any other
of their rights under the Senior Indebtedness, including, without limitation,
the waiver of default thereunder, all without notice to or assent from the
Holders of the Securities or the Trustee and without affecting the obligations
of the Company, the Trustee or the Holders of Securities under this Article
Sixteen.
SECTION 1610. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
the Senior Indebtedness, and shall not be liable to any such holders if it shall
mistakenly pay over or distribute money or assets to Securityholders or the
Company.
------------------------
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
K N ENERGY, INC.
By
------------------------------------
Vice President
FIRST TRUST OF ILLINOIS,
NATIONAL ASSOCIATION
By
------------------------------------
Vice President
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EXHIBIT A
FORM OF CERTIFICATE TO BE GIVEN BY
BENEFICIAL OWNER OF
INTEREST IN A TEMPORARY GLOBAL SECURITY
K N ENERGY, INC.
[Title of Securities]
(the "Securities")
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States persons"), (ii) are owned by United States person(s) that are
(A) foreign branches of United States financial institutions (as defined in U.S.
Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (B) United States person(s)
who acquired Securities through the foreign branches of the United States
financial institutions and who hold the Securities through such United States
financial institutions on the date hereof (and in either case (A) or (B), each
such United States financial institution hereby agrees, on its own behalf or
through its agent, to comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the Internal Revenue Code of 1986 as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if
the owner of the Securities is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3)
of Regulation S under the Securities Act of 1933, as amended (the "Act"), then
this is also to certify that, except as set forth below (i) in the case of debt
securities, the Securities are beneficially owned by (a) non-U.S. person(s) or
(b) U.S. person(s) who purchased the Securities in transactions which did not
require registration under the Act; or (ii) in the case of equity securities,
the Securities are owned by (x) non-U.S. person(s) (and such person(s) are not
acquiring the Securities for the account or benefit of U.S. person(s)), or (y)
U.S. person(s) who purchased the Securities in a transaction which did not
require registration under the Act. If this certification is being delivered in
connection with the exercise of warrants pursuant to Section 230.902(m) of
Regulation S under the Act, then this is further to certify that, except as set
forth below, the Securities are being exercised by and on behalf of non-U.S.
person(s). As used in this paragraph, the term "U.S. person" has the meaning
given to it by Regulation S under the Act.
As used herein, "United States" or "U.S." means the United States of
America (including the States and District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the Securities held
by you for our account in accordance with your Operating Procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
This certification excepts and does not relate to $ of such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
A-1
<PAGE> 67
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
* Dated: , 199 .
NAME OF PERSON MAKING CERTIFICATION
By:
-------------------------------------------------------------
- ---------------
* To be dated no earlier than the Certification Date.
A-2
<PAGE> 68
EXHIBIT B
FORM OF CERTIFICATION TO BE GIVEN BY THE
EURO-CLEAR OPERATOR OR CEDEL S.A.
K N ENERGY, INC.
[Title of Securities]
(the "Securities")
This is to certify that, based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the principal
amount set forth below (our "Member Organizations") substantially to the effect
set forth in the Indenture, dated as of May 15, 1996, between K N Energy, Inc.
and First Trust of Illinois, National Association as of the date hereof,
[ ] principal amount of the above-captioned Securities (i) is owned
by persons that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States persons"), (ii) is owned by United States persons that are (A)
foreign branches of United States financial institutions (as defined in U.S.
Treasury Regulations Section 1.16512(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (B) United States persons who
acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (A) or (B), each such United
States financial institution has agreed, on its own behalf or through its agent,
that it will comply with the requirements of Section 165(1)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder),
or (iii) is owned by United States or foreign financial institutions for
purposes of resale during the restricted period (as defined in U.S. Treasury
Regulations Section 1.1635(c)(2)(i)(D)(7)), and to the further effect that the
United States or foreign financial institutions described in clause (iii) above
(whether or not also described in clause (i) or (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
If the Securities are of the category contemplated in Section 230.903(c)(3)
of Regulation S under the Securities Act of 1933, as amended, then this is also
to certify with respect to such principal amount of Securities set forth above
that, except as set forth below, we have received in writing, by tested telex or
by electronic transmission, from our Member Organizations entitled to a portion
of such principal amount, certifications with respect to such portion,
substantially to the effect set forth in the Indenture.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the temporary global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
B-1
<PAGE> 69
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification or a
copy hereof to any interested party in such proceedings.
Dated: , 199 .
(dated the Exchange Date or the Interest
Payment Date)
[Morgan Guaranty Trust Company of
New York, as operator of the
Euro-clear
System]
or
[CEDEL S.A.]
By:
--------------------------------------
B-2
<PAGE> 1
EXHIBIT 5
VINSON & ELKINS
L.L.P.
ATTORNEYS AT LAW
2300 FIRST CITY TOWER
1001 FANNIN
HOUSTON, TEXAS 77002-6760
May 22, 1996
K N Energy, Inc.
370 Van Gordon Street
Lakewood, Colorado 80228
Gentlemen:
We have acted as counsel for K N Energy, Inc., a Kansas corporation (the
"Company"), in connection with the filing by the Company with the Securities and
Exchange Commission (the "Commission") of a Registration Statement on Form S-3
(the "Registration Statement") with respect to one or more series of the
Company's senior debt securities or subordinated debt securities or both
(collectively, the "Debt Securities"), together with an indeterminate number of
shares of Common Stock, par value $5.00 per share ("Common Stock"), which may be
issued upon conversion of the Debt Securities, for sale from time to time
pursuant to Rule 415 under the Securities Act of 1933, as amended (the
"Securities Act"). The Debt Securities are issuable pursuant to a senior
Indenture or Subordinated Indenture or both, each between the Company and First
Trust of Illinois, National Association, as trustee (the "Trustee")
(collectively, the "Indentures" and individually, an "Indenture"). Both the
Company and its largest stockholder, Cabot Corporation, a Delaware corporation
(the "Selling Stockholder"), may also offer and sell from time to time pursuant
to the Registration Statement and Rule 415 shares of the Common Stock. The
aggregate initial offering prices of the Debt Securities and the Common Stock
offered by the Company under the Registration Statement (collectively, the
"Securities") may not exceed $300 million and the aggregate number of such
shares offered by the Selling Stockholder may not exceed 500,000. The Securities
will be offered in amounts, at prices and on terms to be determined at the time
of offering and to be set forth in supplements to the Prospectus contained in
the Registration Statement.
Before rendering our opinions hereinafter set forth, we examined such
certificates, instruments and documents, including forms of the Indentures filed
as exhibits to the Registration Statement, and we reviewed such questions of
law, as we considered appropriate.
Based upon the foregoing examination and review, we are of the opinion
that:
(i) When the Registration Statement has become effective under the
Securities Act, the terms of any Debt Securities and of their issuance and
sale have been duly established in conformity with the applicable Indenture
so as not to violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Company and so as to
comply with any requirements or restriction imposed by any court or
governmental body having jurisdiction over the Company, and the Debt
Securities have been duly executed and authenticated in accordance with the
applicable Indenture and issued and sold as contemplated in the
Registration Statement, the Debt Securities will constitute valid and
legally binding obligations of the Company, subject to bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and to general equitable principles,
and any shares of Common Stock issued upon conversion of any such Debt
Securities will be duly authorized, validly issued, fully paid and
nonassessable.
<PAGE> 2
(ii) When the Registration Statement has become effective under the
Securities Act, the terms of the issuance of any shares of Common Stock to
be issued and sold by the Company pursuant to the Registration Statement
have been established by the Board of Directors of the Company (or a
committee thereof), and such shares have been issued and sold as
contemplated in the Registration Statement, all such shares will be duly
authorized, validly issued, fully paid and nonassessable.
(iii) When the Registration Statement has become effective under the
Securities Act, any shares of Common Stock that may be sold by the Selling
Stockholder pursuant to the Registration Statement will be duly authorized,
validly issued, fully paid and non-assessable.
We hereby consent to the statements made with respect to us under the
captions "Validity of Securities" and "Description of Debt
Securities -- Provisions Applicable Solely to Subordinated Debt Securities --
Conversion" in the prospectus contained in the Registration Statement and to the
filing of this opinion as an exhibit to the Registration Statement. By giving
such consent, we do not admit that we are within the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission issued thereunder.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 12
K N ENERGY, INC. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED YEARS ENDED DECEMBER 31,
MARCH 31, ----------------------------------------------------
1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income From Continuing Operations
per Statements of Income...... $ 17,507 $ 52,522 $ 15,321 $ 30,869 $ 36,342 $ 37,074
Add:
Interest and Debt Expense..... 8,580 34,316 32,009 31,478 27,608 24,298
Income Taxes.................. 9,847 29,050 9,500 18,599 20,068 21,282
Portion of Rents
Representative of the
Interest Factor............. 1,440 5,082 3,492 2,863 1,901 1,542
-------- -------- -------- -------- -------- --------
Income as Adjusted............ $ 37,374 $120,970 $ 60,322 $ 83,809 $ 85,919 $ 84,196
======== ======== ======== ======== ======== ========
Fixed Charges:
Interest and Debt Expense per
Statements of Income (Includes
Amortization of Debt Discount,
Premium and Expense).......... $ 8,551 $ 34,211 $ 31,815 $ 30,909 $ 27,090 $ 24,091
Add:
Interest Capitalized.......... 29 105 338 965 842 207
Portion of Rents
Representative of the
Interest Factor............. 1,440 5,082 3,492 2,863 1,901 1,542
Preferred Stock Dividends of
Subsidiary.................. -- -- -- 69 3,084 5,393
-------- -------- -------- -------- -------- --------
Fixed Charges................. $ 10,020 $ 39,398 $ 35,645 $ 34,806 $ 32,917 $ 31,233
======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed
Charges.......................... 3.73 3.07 1.69 2.41 2.61 2.70
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF K N INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated February 14,
1996, included in K N Energy, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1995 and to all references to our firm included in such
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Denver, Colorado
May 20, 1996
<PAGE> 1
EXHIBIT 24
LIMITED POWER OF ATTORNEY
K N ENERGY, INC.
KNOW ALL MEN BY THESE PRESENTS that, the undersigned director or officer of
K N Energy, Inc., a Kansas corporation, does hereby make, constitute and appoint
LARRY D. HALL and Clyde E. McKenzie and each of them acting individually, his
true and lawful attorney with power to act without the other and with full power
of substitution, to execute, deliver and file, for and on his behalf, and in his
name and in his capacity or capacities as aforesaid, a Registration Statement on
Form S-3 for filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to debt securities and Common
Stock of K N Energy, Inc. and any and all amendments thereto or other documents
in support thereof or supplemental thereto, hereby granting to said attorneys
and each of them full power and authority to do and perform each and every act
and thing whatsoever as said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as the undersigned
might or could do personally or in the capacity or capacities as aforesaid,
hereby ratifying and confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 20th day
of May, 1996.
/s/ LARRY D. HALL
----------------------------------------------
Larry D. Hall
/s/ CLYDE E. MCKENZIE
----------------------------------------------
Clyde E. McKenzie
/s/ EDWARD H. AUSTIN, JR.
----------------------------------------------
Edward H. Austin, Jr.
/s/ CHARLES W. BATTEY
----------------------------------------------
Charles W. Battey
/s/ STEWART A. BLISS
----------------------------------------------
Stewart A. Bliss
/s/ DAVID W. BURKHOLDER
----------------------------------------------
David W. Burkholder
/s/ DAVID M. CARMICHAEL
----------------------------------------------
David M. Carmichael
/s/ ROBERT W. CHITWOOD
----------------------------------------------
Robert W. Chitwood
/s/ HOWARD P. COGHLAN
----------------------------------------------
Howard P. Coghlan
/s/ JORDAN L. HAINES
----------------------------------------------
Jordan L. Haines
<PAGE> 2
/s/ WILLIAM J. HYBL
----------------------------------------------
William J. Hybl
/s/ EDWARD RANDALL, III
----------------------------------------------
Edward Randall, III
/s/ JAMES C. TAYLOR
----------------------------------------------
/s/ H. A. TRUE, III
---------------------------------------------
H. A True, III
<PAGE> 1
EXHIBIT 25
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION
305(B)(2)
-----------------
FIRST TRUST OF ILLINOIS,
NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
36-4046888
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
400 NORTH MICHIGAN AVENUE, 60611
CHICAGO, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
-----------------
JOHN W. PORTER
FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION
400 N. MICHIGAN AVENUE, FLOOR 25
CHICAGO, ILLINOIS 60611
TELEPHONE (312) 836-6736
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------
K N ENERGY, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
KANSAS 48-0290000
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
370 VAN GORDON STREET 80228-8304
P.O. BOX 281304 (ZIP CODE)
LAKEWOOD, COLORADO
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
SUBORDINATED DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
===============================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES OF
THE TRUSTEE:
AS OF MAY 17, 1996
<TABLE>
<CAPTION> COL. B
COL. A AMOUNT
TITLE OF CLASS OUTSTANDING
-------------- -----------
<S> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY OTHER
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(A) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER INDENTURE.
Not applicable by virtue of response to Item 13.
(B) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR THE CLAIM THAT
NO CONFLICTING INTEREST WITHIN THE MEANING OF SECTION 310(B)(1) OF THE
ACT ARISES AS A RESULT OF THE TRUSTEESHIP UNDER ANY SUCH OTHER INDENTURE,
INCLUDING A STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL RANK AS
COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER INDENTURE.
Not applicable by virtue of response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE TRUSTEE IS
A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR REPRESENTATIVE OF THE
OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON HAVING
ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.
Not applicable by virtue of response to Item 13.
1
<PAGE> 3
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE
OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND EXECUTIVE
OFFICER OF THE OBLIGOR.
AS OF MAY 17, 1996
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
------- -------- ------------ -----------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE
OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH DIRECTOR,
PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
AS OF MAY 17, 1996
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE
OF VOTING
SECURITIES
REPRESENTED
BY AMOUNT
NAME OF TITLE OF AMOUNT OWNED GIVEN
OWNER CLASS BENEFICIALLY IN COL. C
------- -------- ------------ -----------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED
BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE
TRUSTEE:
AS OF MAY 17, 1996
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
WHETHER
THE
SECURITIES
ARE VOTING
OR AMOUNT OWNED BENEFICIALLY OR PERCENT OF CLASS
TITLE OF NONVOTING HELD AS COLLATERAL SECURITY REPRESENTED BY AMOUNT
CLASS SECURITIES FOR OBLIGATIONS IN DEFAULT GIVEN INN COL. C
-------- ---------- ---------------------------- ---------------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
2
<PAGE> 4
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR, FURNISH
THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH UNDERWRITER ANY
OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF MAY 17, 1996
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ---------------------- -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF
CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR
OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
AS OF MAY 17, 1996
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ---------------------- -----------------
<S> <C> <C> <C>
</TABLE>
No applicable by virtue of response to Item 13.
ITEM 11. OWNERSHIP OF HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON
ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
AS OF MAY 17, 1996
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR HELD PERCENT OF CLASS
NAME OF ISSUER AS COLLATERAL SECURITY REPRESENTED BY
AND TITLE OF AMOUNT FOR OBLIGATIONS IN AMOUNT GIVEN IN
CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ---------------------- -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
3
<PAGE> 5
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
AS OF MAY 17, 1996
<TABLE>
<CAPTION>
COL. A. COL. B COL. C
NATURE OF INDEBTEDNESS AMOUNT OUTSTANDING DATE DUE
- ---------------------- ------------------ --------
<S> <C> <C>
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(A) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the
securities under this indenture.
(B) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OR ANY SUCH DEFAULT.
There is not nor has there been a default with respect to the securities
under this indenture. The trustee is a trustee under other indentures under
which securities issued by the obligor are outstanding. There is not and
there has not been a default with respect to the securities outstanding
under such other indentures.
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
If ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE OF THE TRUSTEES, DESCRIBE
EACH SUCH AFFILIATION.
Not applicable by virtue of response to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the Articles of Association of First Trust of Illinois,
National Association as now in effect, incorporated herein by reference to
Exhibit 1 to T-1; Registration No. 33-64175.
2. A copy of the certificate of authority to commence business,
incorporated herein by reference to Exhibit 2 to T-1, Registration No.
33-64175.
3. A copy of the certificate of authority to exercise corporate trust
powers, incorporated herein by reference to Exhibit 3 to T-1, Registration
No. 33-64175.
4. A copy of the existing By-Laws of First Trust of Illinois, National
Association as now in effect, incorporated herein by reference to Exhibit 4 to
T-1; Registration No. 33-64175.
4
<PAGE> 6
5. Not applicable by virtue of response to Item 13.
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939, incorporated herein by reference to Exhibit 6 to T-1;
Registration No. 33-64175.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority,
filed herewith.
8. Not applicable.
9. Not applicable.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE TRUSTEE,
FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION
ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY
CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF CHICAGO, AND STATE
OF ILLINOIS, AS OF THE 17TH DAY OF MAY, 1996.
First Trust of Illinois, National
Association
By /s/ John W. Porter
-------------------------------------
John W. Porter
Vice President and Secretary
5
<PAGE> 7
EXHIBIT 7
<PAGE> 8
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<S> <C> <C> <C>
First Trust of Illinois, N.A. Call Date: 03/31/96 ST-BK: 17-1638 FFIEC 033
100 North Michigan Avenue Page RC-1
Chicago, IL 60611 Vendor ID: D CERT: 34094
9
Transit Number: 09600069
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Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
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<CAPTION>
C200
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCOM
----
a. Noninterest-bearing balances and currency and coin(1)................... 0081. . 74,785 1.a
b. Interest-bearing balances(2)............................................ 0071. . 0 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) ............. 1754. . 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1775. . 3,000 2.b
3. Federal funds sold and securities purchased under agreements to resell:
a. Federal funds sold...................................................... 0276. . 0 3.a
b. Securities purchased under agreements to resell......................... 0277. . 0 3.b
4. Loans and lease financing receivables: RCOM
a. Loans and leases, net of unearned income ----
(from schedule RC-C).......................... 2122. . 0 . . . . . . . 4.a
b. LESS: Allowance for loan and lease losses..... 3123. . 0 . . . . . . . 4.b
c. LESS: Allocated transfer risk reserve......... 3128. . 0 . . . . . . . 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus
4.b and 4.c)............................................................ 2125. . 0 4.d
5. Trading assets.............................................................. 3545. . 0 5.
6. Premises and fixed assets (including capitalized leases).................... 2145. . 4 6.
7. Other real estate owned (from Schedule RC-H)................................ 2150. . 0 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-R).............................................................. 2130. . 0 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155. . 0 9.
10. Intangible assets (from Schedule RC-R)...................................... 2143. . 27,245 10.
11. Other assets (from Schedule RC-F)........................................... 2160. . 3,905 11.
12. Total assets (sum of items 1 through 11).................................... 2170. . 108,939 12.
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(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit net held for trading.
<PAGE> 9
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<S> <C> <C> <C>
First Trust of Illinois, N.A> Call Date: 03/31/96 ST-BK: 17-1638 FFIEC 033
400 North Michigan Avenue Page RC-2
Chicago, IL 60611 Vendor ID: D CERT: 34094
10
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Transit Number: 09600069
Schedule RC - Continued
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<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
RCOM
a. In domestic offices (sum of totals of ----
columns A and C from Schedule RC-E)..................................... 2200 0 13.a
RCON
----
(1) Noninterest-bearing (1)................... 6631. . 0 . . . . . . . 13.a.1
(2) Interest-bearing.......................... 6636. . 0 . . . . . . . 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs........... . . . . . . .
(1) Noninterest-bearing................................................. . . . . . . .
(2) Interest-bearing.................................................... . . . . . . .
14. Federal funds purchased and securities sold under agreements to repurchase:
a. Federal funds purchased................................................. 0278. . 0 14.a
b. Securities sold under agreements to repurchase.......................... 0279. . 0 14.b
15. a. Demand notes issued to the U.S. Treasury................................ 2840. . 0 15.a
b. Trading liabilities..................................................... 3548. . 0 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less........................... 2332. . 0 16.a
b. With a remaining maturity of more than one year......................... 2333. . 0 16.b
17. Mortgage indebtedness and obligations under capitalized leases............. 2910. . 0 17.
18. Bank's liabilities on acceptances executed and outstanding................. 2920. . 0 18.
19. Subordinated notes and debentures.......................................... 3200. . 0 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930. . 2,791 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948. . 2,791 21.
22. Limited-life preferred stock and related surplus........................... 3282. . 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838. . 0 23.
24. Common stock............................................................... 3230. . 1,000 24.
25. Surplus (exclude all surplus related to preferred stock)................... 3839. . 106,712 25.
26. a. Undivided profits and capital reserves.................................. 3632. . (1,564) 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities.. 6434. . 0 26.b
27. Cumulative foreign currency translation adjustments........................ 3210 . . . . . . . .
28. Total equity capital (sum of items 23 through 27).......................... 3210. . 106,148 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of
items 21, 22, and 26)...................................................... 3300. . 108,939 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1995........... 6724. . 2 n.1
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1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company (but external auditors
not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state
chartering authority)
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(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
