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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 18, 1996
McDONALD'S CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 1-5231 36-2361282
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
One McDonald's Plaza
Oak Brook, Illinois 60521
(630) 623-3000
(Address and Phone Number of Principal Executive Offices)
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Item 5. Other Events.
- ------- ------------
On November 5, 1996, McDonald's Corporation issued $200,000,000 7 1/2%
Subordinated Deferrable Interest Debentures due 2036.
(c) Exhibits
--------
1 Underwriting Agreement dated October 31, 1996, by and among
McDonald's Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., J. P. Morgan Securities Inc.,
Morgan Stanley & Co. Incorporated, PaineWebber Incorporated,
Prudential Securities Incorporated, Salomon Brothers Inc, and Smith
Barney Inc.
4(a) Subordinated Debt Securities Indenture dated as of October 18, 1996
between McDonald's Corporation and First Union National Bank, as
Trustee
4(b) Supplemental Indenture No. 1, dated as of November 5, 1996,
supplemental to the Subordinated Debt Securities Indenture dated as
of October 18, 1996, between McDonald's Corporation and First Union
National Bank, as Trustee
4(c) Specimen Debenture
8 Tax Opinion
23 Consent of Paul J. Schaffhausen, Federal Tax Counsel of McDonald's
Corporation, is included in Exhibit 8.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
McDONALD'S CORPORATION
(Registrant)
By: /s/ G. Lowell Dixon
-----------------------------------------
G. Lowell Dixon
Vice President, Assistant General Counsel
and Assistant Secretary
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<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------
Exhibit Sequential
No. Description of Exhibit Page Number
- --- ---------------------- -----------
<S> <C> <C>
1 Underwriting Agreement dated October 31, 1996, 4
by and among McDonald's Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman, Sachs & Co., J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, PaineWebber
Incorporated, Prudential Securities Incorporated, Saloman Brothers
Inc, and Smith Barney Inc.
4(a) Subordinated Debt Securities Indenture dated as of October 18, 1996 20
between McDonald's Corporation and First Union National Bank, as
Trustee
4(b) Supplemental Indenture No. 1, dated as of November 5, 1996, 68
supplemental to the Subordinated Debt Securities Indenture dated as
of October 18, 1996, between McDonald's Corporation and First
Union National Bank, as Trustee
4(c) Specimen Debenture 78
8 Tax Opinion 83
23 Consent of Paul J. Schaffhausen, Federal Tax Counsel of McDonald's
Corporation, is included in Exhibit 8.
</TABLE>
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EXHIBIT 1
MCDONALD'S CORPORATION
UNDERWRITING AGREEMENT
----------------------
To the Representatives named in Schedule I hereto of
the Underwriters named in Schedule II hereto
Dear Sirs:
1. INTRODUCTORY. McDonald's Corporation (the "Company"), a Delaware
corporation, proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you are acting as representatives (the
"Representatives", which term may refer to a single Representative if so
indicated on Schedule I hereto), the principal amount of its securities
identified in Schedule I hereto (the "Securities"), to be issued under an
Indenture, dated as of October 18, 1996 as supplemented by Supplemental
Indenture No. 1, to be dated as of November 5, 1996 (collectively, the
"Indenture"), between the Company and First Union National Bank, as trustee
(the "Trustee"). (If the firm or firms listed in Schedule II hereto include
only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives," as used herein, shall each be deemed to
refer to such firm or firms.)
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") registration statements on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act") (File No. 333-14141 and File No. 33-
50025), which have become effective, for the registration under the Securities
Act of the Securities. Such registration statements meet the requirements set
forth in Rule 415(a)(1)(i) under the Securities Act and comply in all other
material respects with said Rule. The Company proposes to file with the
Commission pursuant to Rule 424(b)(2) or (b)(5) under the Securities Act a
supplement to the form of prospectus included in registration statement File
No. 333-14141 relating to the Securities and the plan of distribution thereof
or (b), if the Company elects to rely on Rule 434 under the Securities Act, a
Term Sheet (as such term is hereinafter defined) relating to the Securities
that shall contain such information as is required or permitted by Rules 434
and 424(b) under the Securities Act. The registration statements File No. 333-
14141 and File No. 33-50025, including the exhibits thereto, are hereinafter
collectively called the "Registration Statement;" the prospectus in the form
in which it appears in registration statement File No. 333-14141, which,
pursuant to Rule 429 under the Securities Act, will also be used in connection
with the Securities registered pursuant to registration statement File No. 33-
50025, is hereinafter called the "Basic Prospectus;" and such supplemented
form of prospectus, in the form in which it shall be filed with the Commission
pursuant to Rule 424(b)(2) or (b)(5) (including the Basic Prospectus as so
supplemented) or (ii), if the Company elects to rely on Rule 434 under the
Securities Act, in the form of the Term Sheet as first filed with the
Commission pursuant to Rule 424(b)(7) (together with the Basic Prospectus), is
hereinafter called the "Final Prospectus." Any preliminary form of the Final
Prospectus which has heretofore been filed pursuant to Rule 424(b) is
hereinafter called the "Preliminary Final Prospectus." Any abbreviated term
sheet that satisfies the requirements of Rule 434 under the Securities Act is
hereinafter called the "Term Sheet." Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 which were filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") on or
before the date of this Agreement, or the issue date of the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, as the case may
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be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
date of this Agreement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus is first filed pursuant
to Rule 424(b) under the Securities Act, when, prior to the Closing Date (as
hereinafter defined), any amendment to the Registration Statement becomes
effective (including the filing of any document incorporated by reference in
the Registration Statement), when any supplement to the Final Prospectus is
filed with the Commission and at the Closing Date (as hereinafter defined),
(i) the Registration Statement, as amended as of any such time, the Final
Prospectus, as amended or supplemented as of any such time, and the Indenture
will comply in all material respects with the applicable requirements of the
Securities Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the Exchange Act and the respective rules and regulations
thereunder and (ii) neither the Registration Statement, as amended as of any
such time, nor the Final Prospectus, as amended or supplemented as of any such
time, will contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading; provided, however, that the Company
makes no representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility (Form T-1) under
the Trust Indenture Act of the Trustee, (ii) information, if any, contained in
the Registration Statement or Final Prospectus relating to the Depository
Trust Company ("DTC") and its book-entry system, or (iii) the information
contained in or omitted from the Registration Statement or the Final
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for use in
connection with the preparation of the Registration Statement and the Final
Prospectus.
(c) The financial statements of the Company and its consolidated
subsidiaries included in the Registration Statement fairly present the
financial condition of the Company and its consolidated subsidiaries as of the
dates indicated and the results of operations and cash flow for the periods
therein specified; and said financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as otherwise stated
therein. As used herein, "consolidated subsidiaries" means each subsidiary of
the Company which is included in the consolidated financial statements of the
Company contained in its annual report to shareholders for 1995 in accordance
with the consolidation policies set forth therein or which would have been so
included if it had been a subsidiary of the Company as of the date of such
consolidated financial statements, and each other subsidiary of the Company
which is included in consolidated financial statements of the Company prepared
from time to time thereafter.
(d) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Final Prospectus and prior to the Closing
Date hereinafter mentioned, except as set forth or contemplated in the Final
Prospectus, (1) neither the Company nor any of its consolidated subsidiaries
has entered into any transaction not in the ordinary course of business which
is material to the Company and its consolidated subsidiaries, considered as a
whole, (2) there has been no material adverse change in the properties,
business, financial condition or results of operations of the Company and its
consolidated subsidiaries, considered as a whole, and (3) no legal or
governmental proceeding, which has or will have materially affected the
Company or any of its consolidated subsidiaries, considered as a whole, or the
transactions contemplated by this Agreement, has been or will have been
instituted or threatened.
(e) The Company and each of its Significant Subsidiaries (herein defined to
mean the list of the Company's domestic and foreign subsidiaries appearing in
Exhibit 21 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995) have been duly incorporated and are validly
2
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existing as corporations in good standing under the laws of their respective
states or jurisdictions of incorporation, with corporate power and authority
to own their properties and to conduct their business as described in the
Basic Prospectus and Final Prospectus. The Company and each of its Significant
Subsidiaries are duly qualified to do business as foreign corporations and are
in good standing in all states or jurisdictions in which the ownership or
lease of real property or the conduct of business requires such
qualifications, except where failure to be so qualified cannot be reasonably
expected to have a material adverse effect on the financial condition of the
Company and its consolidated subsidiaries, considered as a whole. The Company
owns all of the issued and outstanding shares of capital stock of each of the
Significant Subsidiaries, directly or indirectly through one or more
Significant Subsidiaries (except McDonald's Australia Limited and McDonald's
Property Company Limited, of which the Company directly or indirectly owns a
majority of the capital stock), and all of such shares of the Significant
Subsidiaries are owned free and clear of any liens, charges and encumbrances.
(f) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not (i) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default under,
the Restated Certificate of Incorporation or By-Laws of the Company as
presently in effect or (ii) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company
is a party, or any order, rule or regulation applicable to the Company of any
court or of any federal or state regulatory body or administrative agency or
other governmental body having jurisdiction over the Company or any of its
properties, except such conflicts, breaches or defaults referred to in this
subclause (ii) which would not materially and adversely affect the Company and
its consolidated subsidiaries considered as a whole.
(g) The Securities have been duly and validly authorized and, when issued,
authenticated and delivered against payment therefor in accordance with the
terms of the Indenture and this Agreement, will constitute valid and legally
binding obligations of the Company entitled to the benefits of the Indenture,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, moratorium and other laws affecting the enforceability of
creditors' rights and general principles of equity, and will conform to the
description thereof contained in the Final Prospectus. The Indenture has been
duly authorized by the Company and will be a valid and legal instrument
enforceable in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, moratorium and other laws
affecting the enforceability of creditors' rights and general principles of
equity. The Indenture is duly qualified under the Trust Indenture Act.
3. SALE, PURCHASE AND DELIVERY OF SECURITIES. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company hereby agrees to sell to the
Underwriters, severally and not jointly, and each Underwriter, severally and not
jointly (unless otherwise indicated on Schedule I hereto), agrees to purchase
from the Company, at the purchase price set forth in Schedule I hereto, the
principal amount of the Securities set forth opposite such Underwriter's name in
Schedule II hereto, except that, if Schedule I hereto provides for the sale of
Securities pursuant to delayed delivery arrangements, the respective principal
amounts of Securities to be purchased by the Underwriters shall be as set forth
in Schedule II hereto, less the respective amounts of Contract Securities
determined as provided below. Securities to be purchased by the Underwriters are
herein sometimes called the "Underwriters' Securities" and Securities to be
purchased pursuant to Delayed Delivery Contracts as hereinafter provided are
herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are authorized to
solicit offers to purchase Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto but with such changes therein as the Company may authorize
or approve. The Underwriters will endeavor to make such arrangements and, as
compensation therefor, the Company will pay to the Representatives, for the
account of the Underwriters, on the Closing Date, the percentage set forth in
Schedule I hereto of the principal amount of the Securities for which Delayed
Delivery
3
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Contracts are made. Delayed Delivery Contracts are to be with institutional
investors, including commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable institutions. The
Company will make Delayed Delivery Contracts in all cases where sales of
Contract Securities arranged by the Underwriters have been approved by the
Company but, except as the Company may otherwise agree, each such Delayed
Delivery Contract must be for not less than the minimum principal amount set
forth in Schedule I hereto and the aggregate principal amount of Contract
Securities may not exceed the maximum aggregate principal amount set forth in
Schedule I hereto. The Underwriters will not have any responsibility in respect
of the validity or performance of Delayed Delivery Contracts. The principal
amount of Securities to be purchased by each Underwriter as set forth in
Schedule II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the principal
amount of Securities set forth opposite the name of such Underwriter bears to
the aggregate principal amount set forth in Schedule II hereto, except to the
extent that you determine that such reduction shall be otherwise than in such
proportion and so advise the Company in writing; provided, however, that the
total principal amount of Securities to be purchased by all Underwriters shall
be the aggregate principal amount set forth in Schedule II hereto, less the
aggregate principal amount of Contract Securities.
Delivery of and payment for the Underwriters' Securities shall be made at the
office, on the date and at the time specified in Schedule I hereto, which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Underwriters' Securities being herein called the "Closing
Date"). Delivery of the Underwriters' Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company in Federal (same day) funds,
or, if so indicated on Schedule I hereto, in New York Clearinghouse (next day)
funds. Certificates for the Underwriters' Securities shall be registered in such
names and in such denominations as the Representatives may request not less than
three full business days in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 PM on the business day prior to the Closing Date.
If so provided in Schedule I hereto, Underwriters' Securities will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Company with DTC or DTC's designated
custodian. In such case, (a) delivery of the Underwriters' Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters by causing DTC to credit the Underwriters' Securities to the
account of the Representatives at DTC, and (b) the Company will cause the
certificates representing the Underwriters' Securities to be made available to
the Representatives for inspection not later than 1:00 p.m., New York City time,
on the business day prior to the Closing Date at the office of DTC or its
designated custodian.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company
will not file any amendment to the Registration Statement or supplement
(including the Final Prospectus) to the Basic Prospectus unless the Company
has furnished you a copy for your review prior to filing, and the Company will
not file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Company will cause the Final
Prospectus to be filed with the Commission pursuant to Rule 424 and/or Rule
434 under the Securities Act. The Company will promptly advise the
Representatives (i) when the Final Prospectus shall have been filed with the
Commission pursuant to Rule 424 and/or Rule 434 under the Securities Act, (ii)
when any amendment to the Registration Statement relating to the Securities
shall have become effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or amendment of or supplement to the
Final Prospectus or for any additional information, (iv) of the issuance by
the Commission of any
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stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company will
use its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) The Company will prepare and file with the Commission, promptly upon the
request of the Representatives, any amendments or supplements to the
Registration Statement or Final Prospectus which, in the opinion of counsel
for the Underwriters, may be necessary to enable the several Underwriters to
continue the sale of the Securities, and the Company will use its best efforts
to cause any such amendments to become effective and any such supplements to
be filed with the Commission and approved for use by the Underwriters as
promptly as possible. If at any time when a prospectus relating to the
Securities is required to be delivered under the Securities Act, any event
relating to or affecting the Company occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue statement
of a material fact, or omit to state any material fact necessary to make the
statement therein not misleading, or if it is necessary at any time to amend
or supplement the Final Prospectus to comply with the Securities Act or the
Exchange Act or the respective rules thereunder, the Company promptly will
prepare and file with the Commission, subject to the first sentence of
paragraph (a) of this Section 4, an amendment or supplement which will correct
such statement or omission or which will effect such compliance. For the
purposes of this paragraph (b), the Company will furnish such information with
respect to itself as the Representatives may from time to time reasonably
request.
(c) As soon as practicable, but not later than 90 days after the end of
the 12-month period beginning at the end of the current fiscal quarter of
the Company, the Company will make generally available to its security
holders and you an earnings statement covering a period of at least twelve
months beginning not earlier than said effective date which shall satisfy
the provisions of Section 11(a) of the Securities Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, copies of the Registration Statement (including
exhibits thereto and documents incorporated by reference therein) and each
amendment thereto which shall become effective on or prior to the Closing Date
and, so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Securities Act, as many copies of any Preliminary Final
Prospectus and the Final Prospectus and any amendments thereof and supplements
thereto as the Representatives may reasonably request. The Company will pay
the expenses of printing all documents relating to the offering.
(e) The Company will furnish such information and execute such instruments
as may be required to qualify the Securities for sale under the securities or
blue sky laws of such jurisdictions within the United States as you designate,
will continue such qualifications in effect so long as required for
distribution and will arrange for the determination of the legality of the
Securities for purchase by institutional investors. The Company shall not be
required to register or qualify as a foreign corporation nor, except as to
matters and transactions relating to the offer and sale of the Securities,
consent to service of process in any jurisdiction.
(f) So long as the Securities shall be outstanding, the Company will deliver
to you (i) as soon as practicable after the end of each fiscal year,
consolidated balance sheets, statements of income, retained earnings and cash
flows of the Company and its consolidated subsidiaries, as at the end of and
for such year and the last preceding year, all in reasonable detail and
audited by independent public accountants, (ii) as soon as practicable after
the end of each of the first three quarterly periods in each fiscal year,
unaudited consolidated balance sheets, statements of income, retained earnings
and cash flows of the Company and its consolidated subsidiaries, as at the end
of and for such period and for the comparable period of the preceding year,
all in reasonable detail, (iii) as soon as available, all such proxy
statements,
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financial statements and reports as the Company shall send or make available
to its stockholders generally, and (iv) copies of all such annual, periodic
and current reports as the Company or any subsidiary shall file with the
Commission or any securities exchange.
(g) The Company will apply for the listing of the Securities on the New York
Stock Exchange, Inc. if requested to do so by you.
(h) The Company will pay all costs and expenses in connection with the
transactions herein contemplated, including, but not limited to, the fees and
disbursements of its counsel; the fees, costs and expenses of preparing,
printing and delivering the Indenture and the Securities; the fees, costs and
expenses of the Trustee; accounting fees and disbursements; the costs and
expenses in connection with the qualification or exemption of the Securities
under state securities or blue sky laws, including filing fees and reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with any Blue Sky Memorandum; the costs and expenses in
connection with the preparation, printing and filing of the Registration
Statement (including exhibits thereto) and the Basic, Preliminary Final, and
Final Prospectus, the preparation and printing of this Agreement and the
furnishing to the Underwriters of such copies of each prospectus as the
Underwriters may reasonably require; and the fees of rating agencies. It is
understood, however, that, except as provided in this Section and in Sections
7 and 8 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel and any advertising expenses connected
with any offers they may make.
(i) Until the business day following the Closing Date, the Company will not,
without the consent of the Representatives, offer or sell, or announce the
offering of, any debt securities (other than up to $150,000,000 principal
amount of the Company's medium term notes to be issued pursuant to the
Company's Registration Statements on Form S-3 (File Nos. 33-42642 and 33-
60939)) covered by the Registration Statement or any other registration
statement filed under the Securities Act.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the
several Underwriters to purchase and pay for the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and as
of the Closing Date, to the accuracy of the written statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending,
or, to the knowledge of the Company, shall be contemplated by the Commission.
(b) No event, nor any material adverse change in the condition of the
Company, financial or otherwise, shall have occurred, nor shall any event
exist which makes untrue or incorrect any material statement or information
contained in the Registration Statement or the Final Prospectus or which is
not reflected in the Registration Statement or the Final Prospectus, but
should be reflected therein in order to make the statements or information
contained therein not misleading.
(c) You shall not have advised the Company that the Registration Statement
or any prospectus, or any amendment or supplement thereto, contains an untrue
statement of fact which, in the opinion of counsel for the Underwriters, is
material, or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(d) You shall have received at the Closing Date (or prior thereto as
indicated) the following:
(i) An opinion from Gloria Santona, Vice President, Associate General
Counsel and Secretary, or a Vice President and Assistant General Counsel of
the Company, dated the Closing Date, to the effect that:
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(A) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its
business as described in the Final Prospectus.
(B) The Indenture has been duly authorized, executed and delivered by
the Company and the Trustee, is duly qualified under the Trust Indenture
Act, and is a valid and legally binding obligation of the Company
enforceable in accordance with its terms, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency, moratorium and other
laws affecting the enforceability of creditors' rights and general
principles of equity.
(C) The Securities have been duly and validly authorized by all
necessary corporate action and, when duly executed on behalf of the
Company, duly authenticated by the Trustee or the Trustee's authenticating
agent, and duly delivered to the several Underwriters against payment
therefor in accordance with the provisions of this Agreement, in the case
of the Underwriters' Securities, or to the purchasers thereof pursuant to
Delayed Delivery Contracts, in the case of Contract Securities, will
constitute legal, valid and binding obligations of the Company enforceable
in accordance with their terms and entitled to all the benefits of the
Indenture, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, moratorium and other laws affecting the
enforceability of creditors' rights and general principles of equity.
(D) The Indenture and the Securities conform as to legal matters with
the statements concerning them made in the Final Prospectus, and such
statements accurately set forth the provisions thereof required to be set
forth in the Final Prospectus.
(E) This Agreement and any Delayed Delivery Contracts have been validly
authorized, executed and delivered on behalf of the Company.
(F) The Registration Statement and any amendments thereto have become
effective under the Securities Act, and, to the best of the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under the
Securities Act, and the Registration Statement, the Final Prospectus, and
each amendment thereof or supplement thereto (except for the financial
statements and other financial data included therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the Exchange Act
and the respective rules thereunder; such counsel has no reason to believe
that either the Registration Statement or the Final Prospectus, or any
such amendment or supplement, contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; the descriptions
in the Registration Statement and Final Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are accurate
and fairly present the information required to be shown; and such counsel
does not know of any legal or governmental proceedings required to be
described in the Final Prospectus which are not described as required, nor
of any contracts or documents of a character required to be described in
the Registration Statement or Final Prospectus or to be filed as exhibits
to the Registration Statement which are not described and filed as
required.
(G) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof or of any Delayed Delivery Contracts will
not result in a breach of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which, to the knowledge of such counsel,
the Company is a party, or the Restated Certificate of Incorporation or
By-Laws of the Company as presently in effect or, to the knowledge of such
counsel, any order, rule or regulation applicable to the Company of any
court or of any federal or state regulatory body or administrative agency
or other governmental body having jurisdiction over the Company or its
properties.
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(H) No authorization, approval, consent or other action of any
governmental authority or agency is required in connection with the sale
of the Securities as contemplated by this Agreement or in any Delayed
Delivery Contracts except such as may be required under the Securities Act
or under state securities or blue sky laws.
(ii) Such opinion or opinions of counsel for the Underwriters, dated the
Closing Date, with respect to the sufficiency of all corporate proceedings
and other legal matters relating to this Agreement, any Delayed Delivery
Contracts, the validity of the Securities, the Registration Statement, the
Final Prospectus and other related matters as you may reasonably request.
The Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to render their
opinions. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company.
(iii) A certificate of the President or a Vice President, and the Chief
Financial Officer of the Company or its Treasurer, dated the Closing Date,
to the effect that:
(A) The representations and warranties of the Company in Section 2 of
this Agreement are true and correct as of the Closing Date, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date.
(B) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the respective signers
of the certificate, are contemplated under the Securities Act.
(C) The signers of the certificate have carefully examined the
Registration Statement and the Final Prospectus; neither the Registration
Statement, the Final Prospectus nor any amendment or supplement thereto
includes, as of the Closing Date, any untrue statement of a material fact
or omits, as of the Closing Date, to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; since the latest respective dates as of which information is
given in the Registration Statement, there has been no material adverse
change in the financial position, business or results of operations of the
Company and its consolidated subsidiaries, considered as a whole, except
as set forth in or contemplated by the Final Prospectus; and since the
effective date of the Registration Statement, as amended, no event has
occurred which is required to be set forth in the Final Prospectus which
has not been so set forth.
(iv) A letter from Ernst & Young LLP, dated the Closing Date, addressed to
you substantially in the form heretofore approved by you.
(v) An opinion from Paul J. Schaffhausen, Assistant Vice President and
Federal Tax Counsel to the Company, as to certain United States federal
income tax considerations in the form reasonably agreed upon.
(e) Prior to the Closing Date, the Company shall have furnished to you such
further certificates and documents as you may reasonably request.
(f) The Company shall have accepted Delayed Delivery Contracts in any case
where sales of Contract Securities arranged by the Underwriters have been
approved by the Company.
If any condition of the Underwriters' obligations hereunder required to be
satisfied prior to the Closing Date is not so satisfied, this Agreement may be
terminated by you by notice in writing or by facsimile transmission to the
Company.
In rendering the opinions described in Sections 5(d)(i) and (ii) above, Ms.
Gloria Santona, other counsel for the Company, and counsel for the Underwriters
may, as to matters involving the laws of any state other than Illinois, rely
upon the opinion or opinions of local counsel satisfactory to you, but in such
case a signed copy of each such opinion shall be furnished to you.
8
<PAGE>
All such opinions (including opinions, if any, of local counsel),
certificates, letters and documents will be in compliance with the provisions
hereof only if they are in all material respects satisfactory to you and to
counsel for the Underwriters, as to which both you and such counsel shall act
reasonably. The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you request.
You, on behalf of the Underwriters, may waive in writing the compliance by the
Company of any one or more of the foregoing conditions or extend the time for
their performance.
6. REPRESENTATION OF THE UNDERWRITERS. Each of the Underwriters severally
represents and warrants to the Company that the information furnished to the
Company in writing by such Underwriter or by you expressly for use in the
preparation of the Registration Statement or the Final Prospectus does not, and
any amendments thereof or supplements thereto thus furnished will not, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
7. TERMINATION OF AGREEMENT. This Agreement may be terminated by you on behalf
of the Underwriters by notice in writing delivered to the Company prior to the
Closing Date if prior to such time (i) trading in the Company's common stock
shall have been suspended by the Commission on the New York Stock Exchange for a
period of twenty-four hours or more or trading in securities generally on the
New York Stock Exchange shall have been suspended or materially limited, in
either case to such a degree as would in your judgment materially adversely
affect the market for the Securities; (ii) a general moratorium on commercial
banking activities in the State of New York or the United States shall have been
declared by Federal authorities; or (iii) there has occurred any material
outbreak, or material escalation, of hostilities involving the United States or
other national or international calamity or crisis, of such magnitude and
severity in its effect on the financial markets of the United States, in your
reasonable judgment, as to prevent or materially impair the marketing, or
enforcement of contracts for sale, of the Securities.
If this Agreement shall be terminated by you because of any failure on the
part of the Company to comply with any of the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable
to perform its obligations under this Agreement, the Company shall pay, in
addition to the costs and expenses referred to in Section 4(h), all reasonable
out-of-pocket expenses incurred by the Underwriters in contemplation of the
performance by them of their obligations hereunder, including but not limited to
the reasonable fees and disbursements of counsel for the Underwriters, the
Underwriters' reasonable printing and traveling expenses, and postage and
telephone charges relating directly to the offering contemplated by the Final
Prospectus, and also including advertising expenses incurred after the effective
date of the Registration Statement, it being understood that such out-of-pocket
expenses shall not include any compensation, salaries or wages of the officers,
partners or employees of any of the Underwriters.
The Company shall not in any event be liable to the several Underwriters for
damages on account of loss of anticipated profits arising out of the
transactions contemplated by this Agreement.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject, under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment thereof, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however,
9
<PAGE>
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for use in the preparation thereof; and provided, further, that the
foregoing indemnification with respect to the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased the Securities, if
such Underwriter failed to send or give copies of the Final Prospectus, as
amended or supplemented, excluding documents incorporated therein by reference,
to such person at or prior to the written confirmation of the sale of such
Securities to such person in any case where such delivery is required by the
Securities Act and the untrue statement or omission of a material fact contained
in the Basic Prospectus or any Preliminary Final Prospectus was corrected in the
Final Prospectus (or the Final Prospectus as amended or supplemented). This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each person, if any, who controls the Company either within the meaning
of the Securities Act or the Exchange Act, each of its directors and each of its
officers who has signed the Registration Statement, against any losses, claims,
damages or liabilities to which the Company, any such controlling person or any
such director or officer may become subject, under the Securities Act, the
Exchange Act, or otherwise, to the same extent as the foregoing indemnity from
the Company to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Company by or on behalf of such
Underwriter through you specifically for use in the preparation of the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page of the Final Prospectus and under the heading "Underwriting" or "Plan of
Distribution" and, if Schedule I hereto provides for sale of Securities pursuant
to delayed delivery arrangements, in the last sentence under the heading
"Delayed Delivery Arrangements" in the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in the Final Prospectus, and you confirm that such statements are
correct. This indemnity agreement will be in addition to any liability which
each such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof,
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the extent that it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or in addition to those available
to the indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt by such indemnified party of notice from the indemnifying
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the
10
<PAGE>
expenses of more than one separate counsel, approved by the Representatives of
the Underwriters in the case of subparagraph (a), representing the indemnified
parties under subparagraph (a) or (b), as the case may be, who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; provided, further, that, with
respect to legal and other expenses incurred by an indemnified party for which
an indemnifying party shall be liable hereunder, all such legal fees and
expenses shall be reimbursed by the indemnifying party as they are incurred.
(d) In order to provide for just and equitable contribution in circumstances
in which the indemnification provided for in paragraph (a) of this Section 8 is
due in accordance with its terms but is for any reason held by a court to be
unavailable from the Company on grounds of policy or otherwise, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) to which the Company and one or more of
the Underwriters may be subject in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount bears to the sum of such discount and the purchase price of the
Securities set forth in Schedule I hereto and the Company is responsible for the
balance; provided, however, that (i) in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount applicable to the Securities purchased by such Underwriter hereunder
and (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
the Securities Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Securities Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clause (i) of this paragraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If the Underwriters' obligations to purchase
Securities pursuant to Section 3 hereof are several and not joint and if any one
or more Underwriters shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement and unless otherwise provided in Schedule
I hereto, the remaining Underwriters shall be obligated severally to take up and
pay for (in the respective proportions which the amount of Securities set forth
opposite their names in Schedule II hereto bear to the aggregate amount of
Securities set opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule II hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
11
<PAGE>
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective
indemnities, agreements, representations and warranties of the Company and the
several Underwriters, set forth in or made pursuant to this Agreement, will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any of its officers or directors or
any controlling person, and will survive delivery of and payment for the
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
11. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or sent by facsimile transmission and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or sent by facsimile transmission and confirmed to the Company at One
McDonald's Plaza, Oak Brook, Illinois 60521, Attention of the Treasurer, with a
copy to the Controller.
12. SUCCESSORS; GOVERNING LAW. This Agreement will inure to the benefit of and
be binding upon the parties hereto and the officers and directors and
controlling persons referred to in Section 8 hereof and their respective
successors, assigns, heirs, executors and administrators, and no other persons
will have any right or obligation hereunder. The terms "successors" and
"assigns" as used herein shall not include a purchaser as such from any
Underwriter. This Agreement shall be governed by and construed and enforced in
accordance with, the internal laws of the State of Illinois.
13. BUSINESS DAY. For purposes of this Agreement, "business day" means any day
on which the New York Stock Exchange is open for trading.
If the foregoing is in accordance with your understanding of our agreement,
sign and return to us the enclosed duplicate hereof, whereupon it will become a
binding agreement between the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
MCDONALD'S CORPORATION
By: /s/ Carleton D. Pearl
-----------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in Chicago, Illinois, acting on behalf
of ourselves, the other Representatives
(if any), and the several Underwriters
(if any) named in Schedule II annexed
hereto, as of the date first above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Stephen T. Moss
------------------------------
Date: October 31, 1996
12
<PAGE>
SCHEDULE I
UNDERWRITING AGREEMENT DATED OCTOBER 31, 1996
REGISTRATION STATEMENT NO. 33-50025
REPRESENTATIVES: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
TITLE, PURCHASE PRICE AND DESCRIPTION OF SECURITIES:
Title: 7 1/2% Subordinated Deferrable Interest
Debentures due 2036
Aggregate Principal Amount: $200,000,000
Price to Public: 100%
Purchase Price by Underwriter
(include accrued interest or
amortization if applicable): Retail: 96.85% Institutional: 98.00%
Maturity: September 30, 2036
Interest Rate: 7 1/2%
Interest Payment Dates: March 31, June 30, September 30 and December 31
Regular Record Dates: March 15, June 15, September 15 and December 15
Redemption Provisions: At any time on or after December 31, 2001,
or upon the occurrence of a Tax Event as
described in the Prospectus Supplement, in
each case at 100% of the principal amount
together with accrued interest
Sinking Fund Provisions: None
Other Provisions: Interest may be deferrable at the option of the
Company under circumstances described in the
Prospectus Supplement for up to 20 consecutive
quarterly interest payment periods
SALE AND DELIVERY PROVISIONS UNDER SECTION 3:
Obligation to Purchase is: several and not joint [_]
several and not joint; provided, however that,
notwithstanding the provisions of Section 9
of the Underwriting Agreement, the Represent-
ative(s) listed above will, subject to the
terms and conditions hereof, purchase or cause
to be purchased any Securities which any
defaulting Underwriter or Underwriters have
agreed but failed or refused to purchase
pursuant to Section 3 hereof [X]
joint and several [_]
Payment to Be Made in: New York Clearinghouse (next day) funds [_]
or Federal (same day) funds [X]
Delivery of Securities: Physical delivery to Underwriters through
Representatives [_]
or delivery to Underwriters through facilities
of DTC by delivery to DTC of one or more
definitive global securities in book-entry
form [X]
CLOSING DATE, TIME AND LOCATION: November 5, 1996, 9:00 a.m., Gardner, Carton &
Douglas, 321 N. Clark Street, Chicago, IL 60610
ADDRESS FOR NOTICE TO REPRESENTATIVES:
c/o Merrill Lynch, Pierce,
Fenner & Smith Incorporated
World Financial Center
250 Vesey Street
New York, New York 10281
Attn: Capital Markets
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
UNDERWRITERS PRINCIPAL AMOUNT
------------ ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................... $ 22,500,000
Goldman, Sachs & Co. ................................... 21,875,000
J.P. Morgan Securities Inc. ............................ 21,875,000
Morgan Stanley & Co. Incorporated....................... 21,875,000
PaineWebber Incorporated................................ 21,875,000
Prudential Securities Incorporated...................... 21,875,000
Salomon Brothers Inc.................................... 21,875,000
Smith Barney Inc........................................ 21,875,000
Bear, Stearns & Co. Inc. ............................... 1,625,000
Alex. Brown & Sons Incorporated......................... 1,625,000
Cowen & Company......................................... 1,625,000
Dain Bosworth Incorporated.............................. 1,625,000
Dillon, Read & Co. Inc. ................................ 1,625,000
Donaldson, Lufkin & Jenrette Securities Corporation..... 1,625,000
A.G. Edwards & Sons, Inc. .............................. 1,625,000
EVEREN Securities, Inc. ................................ 1,625,000
Montgomery Securities................................... 1,625,000
The Ohio Company........................................ 1,625,000
Oppenheimer & Co., Inc. ................................ 1,625,000
Piper Jaffray Inc. ..................................... 1,625,000
Raymond James & Associates, Inc. ....................... 1,625,000
Tucker Anthony Incorporated............................. 1,625,000
Wheat, First Securities, Inc. .......................... 1,625,000
------------
Total.......................................... $200,000,000
============
</TABLE>
<PAGE>
SCHEDULE III
DELAYED DELIVERY CONTRACT
, 19
[Insert name and address
of lead Representative]
Dear Sirs:
The undersigned hereby agrees to purchase from McDonald's Corporation (the
"Company"), and the Company agrees to sell to the undersigned, on ,
19 , (the "Delivery Date"), $
principal amount of the Company's
(the "Securities") offered by the Company's Final Prospectus
dated , 19 , receipt of a copy of which is hereby acknowledged, at a
purchase price of % of the principal amount thereof, plus accrued interest,
if any, thereon from , 19 , to the date of payment and delivery, and
on the further terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be made on
or before 11:00 AM on the Delivery Date to or upon the order of the Company in
New York Clearinghouse (next day) funds or Federal (same day) funds, as
specified in Schedule I to the Underwriting Agreement referred to in the Final
Prospectus mentioned above, at your office or at such other places as shall be
agreed between the Company and the undersigned upon delivery to the undersigned
of the Securities in definitive fully registered form and in such authorized
denominations and registered in such names as the undersigned may request by
written communication addressed to the Company not less than five full business
days prior to the Delivery Date. If no request is received, the Securities will
be registered in the name of the undersigned and issued in a denomination equal
to the aggregate principal amount of Securities to be purchased by the
undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date, and the obligation of the Company to sell and
deliver Securities on the Delivery Date, shall be subject to the conditions (and
neither party shall incur any liability by reason of the failure thereof) and
(1) the purchase of Securities to be made by the undersigned, which purchase the
undersigned represents is not prohibited on the date hereof, shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject, and (2) the Company, on or before the Delivery Date,
shall have sold to certain underwriters (the "Underwriters") such principal
amount of the Securities as is to be sold to them pursuant to the Underwriting
Agreement referred to in the Final Prospectus mentioned above. Promptly after
completion of such sale to the Underwriters, the Company will mail or deliver to
the undersigned at its address set forth below notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith. The obligation of the undersigned to take
delivery of and make payment for the Securities, and the obligation of the
Company to cause the Securities to be sold and delivered, shall not be affected
by the failure of any purchaser to take delivery of and make payment for the
Securities pursuant to other contracts similar to this contract.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar contracts
is in the Company's sole discretion and, without limiting the foregoing, need
not be on a first come, first served basis. If this contract is acceptable to
the Company, it is required that the Company sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the Company
and the undersigned, as of the date first above written, when such counterpart
is so mailed or delivered.
<PAGE>
This agreement shall be governed by and construed and enforced in accordance
with, the internal laws of the State of Illinois.
Very truly yours,
-------------------------------------
(Name of Purchaser)
By __________________________________
(Signature and Title of Officer)
-------------------------------------
(Address)
Accepted:
McDONALD'S CORPORATION
By __________________________________
(Authorized Signature)
<PAGE>
Exhibit 4(a)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MCDONALD'S CORPORATION
AND
FIRST UNION NATIONAL BANK
TRUSTEE
----------------
INDENTURE
----------------
DATED AS OF OCTOBER 18, 1996
SUBORDINATED DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
REFERENCE SHEET*
Reference is made to the following provisions of the Trust Indenture Act of
1939, as amended, which establish certain duties and responsibilities of the
Company and the Trustee which may not be set forth in this Indenture:
<TABLE>
<CAPTION>
SECTION SUBJECT
- ------- -----------------------------------
<C> <S>
310(b) Disqualification of the Trustee for
conflicting interest
311 Preferential collection of claims
of the Trustee as creditor of
the Company
312(a) Periodic filing of information by
the Company with the Trustee
312(b) Access of Holders to information
313(a) Annual report of the Trustee to
Holders
313(b) Additional reports of the Trustee
to Holders
313(d) Filing of reports with stock
exchanges and Commission
314(a) Reports by the Company, including
Trustee annual compliance
certificate
314(c) Evidence of compliance with
conditions precedent
315(a) Duties of the Trustee prior to
default
</TABLE>
<TABLE>
<CAPTION>
SECTION SUBJECT
- ------- ---------------------------------------------
<C> <S>
315(b) Notice of default from the Trustee to Holders
315(c) Duties of the Trustee in case of default
315(d) Provisions relating to responsibility of the
Trustee
315(e) Assessment of costs against litigating Holders
in certain circumstances
316(a) Directions and waivers by Holders in certain
circumstances
316(b) Prohibition of impairment of right of Holders
to payment
316(c) Right of the Company to set record date for
certain purposes
317(a) Special powers of the Trustee
317(b) Duties of paying agents
318(a) Provisions of Trust Indenture Act of 1939 to
control in case of conflict
</TABLE>
- ------------------
* This reference sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
ARTICLE ONE
DEFINITIONS
<C> <S> <C>
Section 1.01. Definitions........................................ 1
Authenticating Agent............................... 1
Board of Directors................................. 1
Company............................................ 1
Company Request.................................... 1
Debt Security...................................... 1
Designated Officers................................ 2
Dollars............................................ 2
Event of Default................................... 2
Holder............................................. 2
Indenture.......................................... 2
Interest........................................... 2
Officers' Certificate.............................. 2
Opinion of Counsel................................. 2
Original Issue Discount Security................... 2
Outstanding........................................ 2
Person............................................. 3
Place of Payment................................... 3
Principal Office of the Trustee.................... 3
Responsible Officer................................ 3
Senior Indebtedness................................ 3
Subsidiary......................................... 3
Trustee............................................ 3
Trust Indenture Act of 1939........................ 3
U.S. Government Obligations........................ 3
Yield to Maturity.................................. 4
ARTICLE TWO
DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
Section 2.01. Forms.............................................. 4
Section 2.02. Amount Unlimited; Issuable in Series............... 5
Section 2.03. Authentication..................................... 6
Section 2.04. Date and Denomination of Debt Securities........... 7
Section 2.05. Execution of Debt Securities....................... 7
Section 2.06. Exchange and Registration of Transfer of
Debt Securities.................................... 7
Section 2.07. Mutilated, Destroyed, Lost or Stolen Debt
Securities......................................... 8
Section 2.08. Temporary Debt Securities.......................... 9
Section 2.09. Cancellation of Debt Securities Paid .............. 9
Section 2.10. Computation of Interest............................ 9
</TABLE>
- --------
*This table of contents shall not, for any purpose, be deemed to be a part of
the Indenture.
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
ARTICLE THREE
REDEMPTION OF DEBT SECURITIES; SINKING FUNDS
<C> <S> <C>
Section 3.01. Applicability of Article................................. 10
Section 3.02. Notice of Redemption; Selection of Debt Securities....... 10
Section 3.03. Payment of Debt Securities Called for Redemption......... 10
Section 3.04. Satisfaction of Mandatory Sinking Fund Payments with Debt
Securities............................................... 11
Section 3.05. Redemption of Debt Securities for Sinking Fund........... 11
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. Payment of Principal, Premium and Interest............... 13
Section 4.02. Offices for Notices and Payments ........................ 13
Section 4.03. Appointments to Fill Vacancies in Trustee's Office....... 13
Section 4.04. Provisions as to Paying Agent............................ 13
Section 4.05. Statement as to Compliance............................... 14
ARTICLE FIVE
HOLDER LISTS
AND REPORTS BY THE TRUSTEE
Section 5.01. Holder Lists............................................. 14
Section 5.02. Delivery of Reports by the Trustee....................... 14
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND
HOLDERS ON EVENT OF DEFAULT
Section 6.01. Events of Default........................................ 15
Section 6.02. Payment of Debt Securities on Default; Suit Therefor..... 16
Section 6.03. Application of Moneys Collected by Trustee............... 18
Section 6.04. Proceedings by Holders of Debt Securities................ 18
Section 6.05. Proceedings by Trustee................................... 19
Section 6.06. Remedies Cumulative and Continuing....................... 19
Section 6.07. Direction of Proceedings and Waiver of Defaults by
Holders of Debt Securities............................... 19
</TABLE>
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<TABLE>
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ARTICLE SEVEN
CONCERNING THE TRUSTEE
<C> <S> <C>
Section 7.01. Reliance on Documents and Opinions........................ 20
Section 7.02. Responsibility for Recitals............................... 20
Section 7.03. Ownership of Debt Securities.............................. 20
Section 7.04. Moneys to be Held in Trust................................ 21
Section 7.05. Compensation and Expenses of Trustee...................... 21
Section 7.06. Officers' Certificate as Evidence......................... 21
Section 7.07. Eligibility of Trustee.................................... 21
Section 7.08. Resignation or Removal of Trustee......................... 21
Section 7.09. Acceptance by Successor Trustee........................... 22
Section 7.10. Succession by Merger...................................... 23
Section 7.11. Authenticating Agents..................................... 23
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. Action by Holders......................................... 24
Section 8.02. Proof of Execution by Holders............................. 24
Section 8.03. Who Are Deemed Absolute Owners............................ 25
Section 8.04. Company-Owned Debt Securities Disregarded................. 25
Section 8.05. Revocation of Consents; Future Holders Bound.............. 25
ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. Purposes of Meetings...................................... 25
Section 9.02. Call of Meetings by Trustee............................... 26
Section 9.03. Call of Meetings by the Company or Holders................ 26
Section 9.04. Qualifications for Voting................................. 26
Section 9.05. Regulations............................................... 26
Section 9.06. Voting.................................................... 27
Section 9.07. No Delay of Rights by Meeting............................. 27
</TABLE>
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ARTICLE TEN
SUPPLEMENTAL INDENTURES
<C> <S> <C>
Section 10.01. Supplemental Indentures without Consent of Holders....... 27
Section 10.02. Supplemental Indentures with Consent of Holders.......... 28
Section 10.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures.................................. 29
Section 10.04. Notation on Debt Securities.............................. 29
Section 10.05. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee........................................ 29
ARTICLE ELEVEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 11.01. Company May Not Consolidate Except Under Certain
Conditions.............................................. 29
Section 11.02. Successor Corporation to be Substituted.................. 29
Section 11.03. Documents to be Given Trustee............................ 30
ARTICLE TWELVE
SATISFACTION AND DISCHARGE OF INDENTURE OR CERTAIN OBLIGATIONS
Section 12.01. Discharge of Indenture................................... 30
Section 12.02. Discharge of Obligations................................. 30
Section 12.03. Deposited Moneys to be Held in Trust by Trustee.......... 31
Section 12.04. Paying Agent to Repay Moneys Held........................ 31
Section 12.05. Return of Unclaimed Moneys............................... 31
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 13.01. Indenture and Debt Securities Solely Corporate
Obligations............................................. 32
</TABLE>
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ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
<C> <S> <C>
Section 14.01. Provisions Binding on Company's Successors............... 32
Section 14.02. Official Acts by Successor Corporation................... 32
Section 14.03. Addresses for Notices.................................... 32
Section 14.04. Governing Law............................................ 32
Section 14.05. Legal Holidays........................................... 32
Section 14.06. Table of Contents and Headings........................... 33
Section 14.07. Execution in Counterparts................................ 33
Section 14.08. Separability............................................. 33
Section 14.09. Benefits................................................. 33
ARTICLE FIFTEEN
SUBORDINATION
Section 15.01. Subordination in Right of Payment to All Senior
Indebtedness............................................ 33
Section 15.02. Trustee May Rely on Certificate of Liquidating Agent..... 34
Section 15.03. Company Obligation to Pay Unconditional.................. 34
Section 15.04. Notice to Trustee of Effectuation of Subordination....... 34
Section 15.05. Senior Indebtedness Held by Trustee...................... 35
EXHIBIT A Form of Subordinated Note
</TABLE>
<PAGE>
This Indenture, dated as of October 18, 1996 between McDonald's Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), and First Union National Bank, a national banking association
(the "Trustee").
WITNESSETH:
Whereas, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated bonds, debentures, notes and other evidences of indebtedness to be
issued in one or more series as in this Indenture provided;
Whereas, all acts and things necessary to make this Indenture, when duly
executed and delivered by the parties hereto, a valid agreement of the Company
according to its terms, have been done and performed, and the execution and
delivery by the Company of this Indenture have in all respects been duly
authorized;
Now, therefore:
In order to declare the terms and conditions upon which the Debt Securities
are authenticated, issued and received, and in consideration of the premises and
the purchase of the Debt Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Debt Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. The terms defined in this Section 1.01 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture shall have the respective meanings specified
in this Section 1.01. All other terms used in this Indenture which are defined
in the Trust Indenture Act of 1939, as amended, or which are by reference
therein defined in the Securities Act of 1933, as amended (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture as originally executed.
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.
"Authenticating Agent" means any agent or agents of the Trustee which at the
time shall be appointed and acting pursuant to Section 7.11.
"Board of Directors" means the Board of Directors of the Company, or any duly
authorized committee of that Board including, without limitation, the Executive
Committee of the Board of Directors.
"Company" means McDonald's Corporation, a Delaware corporation, until any
successor corporation shall have become such pursuant to the provisions of
Article Eleven, and thereafter "Company" shall mean such successor, except as
otherwise provided in Article Eleven.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by the Chairman of the Board, Vice
Chairman of the Board, President or any Vice President, and by its Chief
Financial Officer, Treasurer, an Assistant Treasurer, Controller, an Assistant
Controller, Secretary, or an Assistant Secretary, and delivered to the Trustee.
"Debt Security" or "Debt Securities" means any debt security or debt
securities of the Company, as the case may be, issued, authenticated and
delivered under this Indenture.
<PAGE>
"Designated Officers" means such officers of the Company as are authorized
pursuant to a resolution of the Board of Directors to issue Debt Securities, to
the extent authorized by such resolution and applicable law.
"Dollars" and "$" mean the lawful currency of the United States of America.
"Event of Default" has the meaning specified in Section 6.01.
"Holder", or other similar terms, means any person in whose name at the time
a particular Debt Security is registered on the books of the Company kept for
that purpose in accordance with the terms hereof.
"Indenture" means this instrument as originally executed or as it may be
amended or supplemented from time to time as herein provided, and shall include
the form and terms of particular series of Debt Securities established as
contemplated hereunder.
"interest" when used with respect to a non-interest bearing Debt Security,
means interest payable after the principal thereof has become due and payable
whether at maturity, by declaration of acceleration, by call for redemption,
pursuant to a sinking fund, or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or any Vice President and
by the Chief Financial Officer, Controller, an Assistant Controller, Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company.
Each such certificate shall comply with Section 314(c) of the Trust Indenture
Act of 1939, to the extent applicable.
"Opinion of Counsel" means an opinion in writing signed by legal counsel, who
may be an employee of or of counsel to the Company or the Trustee, or may be
other counsel satisfactory to the Trustee. Each such opinion shall comply with
Section 314(c) of the Trust Indenture Act of 1939, to the extent applicable.
"Original Issue Discount Security" means any Debt Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.01.
"Outstanding", when used with reference to Debt Securities, shall, except as
otherwise required by the Trust Indenture Act of 1939 and subject to the
provisions of Section 8.04, mean, as of any particular time, all Debt
Securities authenticated and delivered by the Trustee or any duly appointed
Authenticating Agent under this Indenture, except
(a) Debt Securities theretofore cancelled by the Trustee, Authenticating
Agent or paying agent or delivered to the Trustee for cancellation;
(b) Debt Securities, or portions thereof, for the payment or redemption
of which moneys in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company for the Holders
of such Debt Securities (if the Company shall act as its own paying agent),
provided that if such Debt Securities are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been mailed as in
Article Three provided, or provision satisfactory to the Trustee shall have
been made for mailing such notice; and
(c) Debt Securities in lieu of or in substitution for which other Debt
Securities shall have been authenticated and delivered, or which shall have
been paid, pursuant to the terms of Section 2.07, unless proof satisfactory
to the Company is presented that any such Debt Securities are held by
persons in whose hands any of such Debt Securities is a valid, binding and
legal obligation of the Company.
In determining whether the Holders of the requisite principal amount of
Outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding for
such purposes shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon a declaration of
acceleration of the maturity thereof pursuant to Section 6.01.
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<PAGE>
In determining whether the Holders of the requisite principal amount of all
series of Outstanding Debt Securities denominated in a currency other than U.S.
Dollars have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, and for the purpose of Section 9.05 herein, the
principal amount of such Outstanding Debt Securities shall be deemed to be that
amount of U.S. Dollars that could be obtained for such principal amount on the
basis of the spot rate of exchange for purchasing U.S. Dollars with such
currency as of the date of determination.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means a city or any political subdivision thereof
designated as such pursuant to Sections 2.02 and 4.02.
"Principal Office of the Trustee", or other similar term, means the office of
the Trustee at which at any particular time its corporate trust business shall
be principally administered, which office at the date hereof is located at 123
South Broad Street, Philadelphia, Pennslyvania 19109, Attention: Corporate
Trust Administration.
"Responsible Officer" when used with respect to the Trustee means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the
president, any executive vice president, any senior vice president, any vice
president, any assistant vice president, the cashier, any assistant cashier,
the secretary, any assistant secretary, the treasurer, any assistant treasurer,
any senior trust officer, any trust officer, any assistant trust officer, or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Senior Indebtedness" means all indebtedness for borrowed money of the
Company, whether outstanding on the date of this Indenture or incurred after
the date of this Indenture, which is not by its terms subordinate to other
indebtedness of the Company; provided, however, that Senior Indebtedness shall
not include amounts owed to trade creditors in the ordinary course of business.
"Subsidiary" means any corporation or other Person of which the Company, or
the Company and one or more Subsidiaries, or any one or more Subsidiaries,
directly or indirectly owns voting securities or other similar equity interests
entitling the owners thereof to elect a majority of the directors or
individuals holding similar positions in other Persons, either at all times or
so long as there is no default or contingency which permits the owners of any
other class or classes of securities or other interests to vote for the
election of one or more directors or individuals holding similar positions in
other Persons, but shall not include any corporation or other Person with
respect to which the Company or any other Subsidiary has become entitled to
elect a majority of the directors or individuals holding similar positions in
other Persons solely due to a default or other contingency which is temporary
in character and has had a continuous existence of less than one year.
"Trustee" means First Union National Bank and, subject to the provisions of
Article Seven hereof, shall also include its successors and assigns as Trustee
hereunder. If pursuant to the provisions of this Indenture there shall be at
any time more than one Trustee hereunder, the term "Trustee" as used with
respect to Debt Securities of any series shall mean the Trustee with respect to
Debt Securities of that series.
"Trust Indenture Act of 1939" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of execution of this Indenture, except
as provided in Section 10.03.
"U.S. Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case under clause (i) or (ii) are not callable or redeemable at the option of
3
<PAGE>
the issuer thereof, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Yield to Maturity" means the yield to maturity, calculated at the time of
issuance of Debt Securities or, if applicable, at the most recent
redetermination of interest on such series and calculated in accordance with
accepted financial practice.
ARTICLE TWO
DESCRIPTION, EXECUTION
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.01. FORMS. (a) The Debt Securities of each series shall be in
substantially the form of Exhibit A to this Indenture or in substantially such
other form as shall be established by or pursuant to a resolution of the Board
of Directors of the Company 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
legends or endorsements placed thereon as the officers executing the same may
approve (execution thereof to be conclusive evidence of such approval) and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Debt
Securities of such series may be listed, or to conform to usage.
The Trustee's Certificate of Authentication on all Debt Securities shall be in
substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein provided
for in the within-mentioned Indenture.
First Union National Bank,
as Trustee
By __________________________________
Authorized Representative
An Authenticating Agent's certificate of authentication on all Debt Securities
which may be authenticated by an Authenticating Agent shall be in substantially
the following form:
AUTHENTICATING AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein provided
for in the within-mentioned Indenture.
[Name of Authenticating Agent],
as Authenticating Agent for the
Trustee
By __________________________________
Authorized Representative
4
<PAGE>
(b) The resolutions adopted by the Board of Directors, or the indenture
supplemental hereto, establishing the form and terms of the Debt Securities of
any series pursuant to Sections 2.01 and 2.02, respectively, of this Indenture,
may provide for issuance of the Debt Securities in global form. If Debt
Securities of a series are so authorized to be issued in global form, any such
global Debt Security may provide that it shall represent the aggregate amount of
Debt Securities from time to time endorsed thereon and may also provide that the
aggregate amount of outstanding Debt Securities represented thereby may from
time to time be reduced. Any endorsement of a Debt Security in global form to
reflect any decrease in the amount or changes in the rights of Holders of Debt
Securities represented thereby shall be made in such manner and by such person
or persons as shall be specified therein.
SECTION 2.02. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal
amount of Debt Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to a resolution or established in one or more
indentures supplemental hereto, prior to the issuance of Debt Securities of any
series,
(1) the title of the Debt Securities of the series (which shall distinguish
the Debt Securities of the series from all other Debt Securities);
(2) any limit upon the aggregate principal amount of the Debt Securities
of the series which may be authenticated and delivered under this Indenture
(except for Debt Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Debt Securities of
the series pursuant to Section 2.06, 2.07, 2.08, 3.03 or 10.04);
(3) the date or dates on which the principal and premium, if any, of the
Debt Securities of the series is payable;
(4) the rate or rates, or the method of determination thereof, at which
the Debt Securities of the series shall bear interest, if any, the date or
dates from which such interest shall accrue, the interest payment dates on
which such interest shall be payable and, if other than as set forth in
Section 2.04, the record dates for the determination of Holders to whom
interest is payable;
(5) if an Original Issue Discount Security, the Yield to Maturity;
(6) the place or places (the "Place of Payment") where the principal of,
and premium, if any, and any interest on Debt Securities of the series
shall be payable;
(7) the price or prices at which, the period or periods within which and
the terms and conditions upon which Debt Securities of the series may be
redeemed, in whole or in part, at the option of the Company, pursuant to
any sinking fund or otherwise;
(8) the obligation, if any, of the Company to redeem, purchase or repay
Debt Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at
which and the period or periods within which and the terms and conditions
upon which Debt Securities of the series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 6.01;
(11) the non-application of, addition to, or change in, any of the Events
of Default with respect to the Debt Securities, and the remedies with
respect thereto;
(12) in the case of any series of non-interest bearing Debt Securities,
the "stated intervals" for purposes of Section 312(a) of the Trust
Indenture Act of 1939;
5
<PAGE>
(13) the currency or currencies in which payments on the Debt Securities
are payable, which may include United States or any foreign currency and
any unit of two or more currencies; and
(14) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Debt Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such resolution of the Board of Directors or in any such indenture supplemental
hereto.
SECTION 2.03. AUTHENTICATION. The Debt Securities of each series shall be
issuable in such form and in such denominations as shall be specified as
contemplated by Section 2.02. In the absence of any such specification with
respect to the Debt Securities of any series, the Debt Securities of such
series shall be issuable in denominations of $1,000 and any integral multiple
thereof.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debt Securities of any series executed by
the Company to the Trustee for authentication. Except as otherwise provided in
this Article Two, the Trustee shall thereupon authenticate, or cause the
Authenticating Agent to authenticate, and deliver said Debt Securities to or
upon Company Order. In authenticating, or causing to be authenticated, such
Debt Securities, and accepting the additional responsibilities under this
Indenture in relation to such Debt Securities, the Trustee and the
Authenticating Agent shall be entitled to receive and (subject to the
requirements of Section 315 of the Trust Indenture Act of 1939) shall be fully
protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of Directors,
certified by the Secretary or an Assistant Secretary of the Company;
(2) an executed supplemental indenture, if any, relating thereto;
(3) an Officers' Certificate prepared in accordance with the requirements
of Section 314(c) of the Trust Indenture Act of 1939 and setting forth the
terms of the Debt Securities as required pursuant to Sections 2.01 and
2.02, respectively;
(4) an Opinion of Counsel for the Company prepared in accordance with the
requirements of Section 314(c) of the Trust Indenture Act of 1939 which
shall also state:
(a) that the form of such Debt Securities has been established by or
pursuant to a resolution of the Board of Directors or by a supplemental
indenture as permitted by Section 2.01 in conformity with the
provisions of this Indenture;
(b) that the terms of such Debt Securities have been established by
or pursuant to a resolution of the Board of Directors or by a
supplemental indenture as permitted by Section 2.02 in conformity with
the provisions of this Indenture;
(c) that such Debt Securities, when authenticated and delivered by
the Trustee or the Authenticating Agent and issued by the Company in
the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting the enforcement of creditors' rights and to
general equity principles;
(d) that all applicable laws and requirements in respect of the
execution and delivery by the Company of the Debt Securities have been
complied with and that authentication and delivery of the Debt
Securities by the Trustee or the Authenticating Agent will not violate
the terms of the Indenture; and
(e) such other matters as the Trustee may reasonably request.
The Trustee shall have the right to decline to authenticate and deliver, or
to cause the Authenticating Agent to decline to authenticate and deliver, any
Debt Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken.
6
<PAGE>
SECTION 2.04. DATE AND DENOMINATION OF DEBT SECURITIES. The Debt Securities of
each series shall be issuable in registered form without coupons in such
denominations as shall be specified as contemplated by Section 2.02. In the
absence of any such specification with respect to the Debt Securities of any
series, the Debt Securities of such series shall be issuable in denominations of
$1,000 and any multiple of $1,000. Debt Securities of each series shall be
numbered, lettered or otherwise distinguished in such manner or in accordance
with such plan as the officers of the Company executing the same may determine
with the approval of the Trustee.
The person in whose name any Debt Security of a particular series is
registered at the close of business on any record date (as hereinafter defined)
with respect to any interest payment date for such series shall be entitled to
receive the interest payable on such interest payment date notwithstanding the
cancellation of such Debt Security upon any registration of transfer or exchange
subsequent to the record date and prior to such interest payment date; provided,
however, that if and to the extent that the Company shall default in the payment
of the interest due on such interest payment date, such defaulted interest shall
be paid to the persons in whose names Outstanding Debt Securities of such series
are registered on a subsequent record date established by notice given by mail
by or on behalf of the Company to the Holders of such Debt Securities not less
than 15 days preceding such subsequent record date, such record date to be not
less than five days preceding the date of payment of such defaulted interest.
Except as otherwise specified as contemplated by Section 2.02 for Debt
Securities of a particular series, the term "record date" as used in this
Section with respect to any regular interest payment date, shall mean the last
day of the calendar month preceding such interest payment date if such interest
payment date is the fifteenth day of the calendar month, and shall mean the
fifteenth day of the calendar month preceding such interest payment date if such
interest payment date is the first day of a calendar month, whether or not such
day shall be a day on which banking institutions in The City of New York are
authorized or required by law or executive order to close or remain closed.
Interest on the Debt Securities may at the option of the Company be paid by
check mailed to the persons entitled thereto at their respective addresses as
such appear on the registry books of the Company or by wire transfer payable to
an account specified by such persons.
SECTION 2.05. EXECUTION OF DEBT SECURITIES. The Debt Securities shall be
signed in the name and on behalf of the Company by the manual or facsimile
signature of its Chairman of the Board, its Vice Chairman of the Board, or
President or a Vice President and by its Treasurer or its Secretary or an
Assistant Treasurer or Assistant Secretary, under its corporate seal (which may
be printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise). Only such Debt Securities as shall bear thereon a certificate of
authentication substantially in the form herein recited, executed by the Trustee
or the Authenticating Agent, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee or
the Authenticating Agent upon any Debt Security executed by the Company shall be
conclusive evidence that the Debt Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any of the Debt
Securities shall cease to be such officer before the Debt Securities so signed
shall have been authenticated and delivered by the Trustee or the Authenticating
Agent, or disposed of by the Company, such Debt Securities nevertheless may be
authenticated and delivered or disposed of as though the person who signed such
Debt Securities had not ceased to be such officer of the Company; and any Debt
Security may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Debt Security, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBT SECURITIES. Debt
Securities of any series may be exchanged for a like aggregate principal amount
and maturity of Debt Securities of the same series in other authorized
denominations. Debt Securities to be exchanged shall be surrendered, at the
option of the Holders thereof, at any of the offices or agencies as may be
designated and maintained by the Company for such purpose in accordance with the
provisions of Section 4.02, and the Company shall execute and register and the
Trustee shall authenticate and deliver in exchange therefor the Debt Security or
Debt Securities which
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the Holder making the exchange shall be entitled to receive. Each person
designated by the Company pursuant to the provisions of Section 4.02 as a person
authorized to register and register transfer of the securities is sometimes
herein referred to as a "Debt Security registrar".
The Company shall keep, at each such office or agency, a register for each
series of Debt Securities issued hereunder (the registers of all Debt Security
registrars being herein sometimes collectively referred to as the "Debt Security
register" or the "registry books of the Company") in which, subject to such
reasonable regulations as it may prescribe, the Company shall register
securities and shall register the transfer of Debt Securities as in this Article
Two provided. The Debt Security register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the Debt Security register shall be open for
inspection by the Trustee and any security registrar other than the Trustee.
Upon due presentment for registration of transfer of any Debt Security of any
series at any designated office or agency, the Company shall execute and
register and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Debt Security or Debt Securities of the same
series for an equal aggregate principal amount. Registration or registration of
transfer of any Debt Security by any Debt Security registrar in the registry
books of the Company maintained by such Debt Security registrar, and delivery of
such Debt Security, duly authenticated, shall be deemed to complete the
registration or registration of transfer of such Debt Security.
The Company will at all times designate one person (who may be the Company and
who need not be a Debt Security registrar) to act as repository of a master list
of names and addresses of the Holders of the Debt Securities. The Company shall
act as such repository unless and until some other person is, by written notice
from the Company to the Trustee and each Debt Security registrar, designated by
the Company to act as such. The Company shall cause each Debt Security registrar
to furnish to such repository, on a current basis, such information as to all
registrations of transfer and exchanges effected by such registrar, as may be
necessary to enable such repository to maintain such master list on as current a
basis as is practicable.
No person shall at any time be designated as or act as a Debt Security
registrar unless such person is at such time empowered under applicable law to
act as such and duly registered to act as such under and to the extent required
by applicable law and regulations.
All Debt Securities presented for registration of transfer or for exchange,
redemption or payment shall (if so required by the Company or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer or exchange in form satisfactory to the Company and the Trustee duly
executed by, the Holder or his attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of transfer
of Debt 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
therewith.
The Company shall not be required to exchange or register a transfer of (a)
any Debt Securities of any series for the period of 15 days next preceding the
selection of Debt Securities of that series to be redeemed and thereafter until
the day of the mailing of a notice of redemption of Debt Securities of that
series selected for redemption, or (b) any Debt Securities selected, called or
being called for redemption in whole or in part except, in the case of any Debt
Security to be redeemed in part, the portion thereof not so to be redeemed.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES. In case
any temporary or definitive Debt Security shall become mutilated or be
destroyed, lost or stolen, the Company in the case of a mutilated Debt Security
shall, and in the case of a lost, stolen or destroyed Debt Security may in its
discretion, execute and, upon the written request or authorization of any
officer of the Company, the Trustee or the Authenticating Agent shall
authenticate and deliver, a new Debt Security of the same series, bearing a
number not contemporaneously outstanding in exchange and substitution for the
mutilated Debt Security, or in lieu of and in substitution for the Debt
Security so destroyed, lost or stolen. In every case the applicant for a
substituted Debt Security shall furnish to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company and the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Debt Security and of the ownership thereof.
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Upon the issuance of any substitute Debt Security, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
In case any Debt Security which has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debt Security, pay or authorize the payment of such Debt Security
(without surrender thereof except in the case of a mutilated Debt Security) if
the applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless
and, in case of destruction, loss or theft, evidence satisfactory to the Company
and the Trustee of the destruction, loss or theft of such Debt Security and the
ownership thereof.
Every substitute Debt Security issued pursuant to the provisions of this
Section 2.07 by virtue of the fact that any Debt Security is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company as
herein provided, whether or not the destroyed, lost or stolen Debt Security
shall be found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debt Securities of
the same series duly issued hereunder. All Debt Securities shall be held and
owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Debt Securities and shall preclude (to the extent lawful) any and all
other rights or remedies with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.08. TEMPORARY DEBT SECURITIES. Pending the preparation of definitive
Debt Securities of any series the Company may execute and the Trustee or
Authenticating Agent shall authenticate and deliver temporary Debt Securities
(printed, lithographed or typewritten). Temporary Debt Securities shall be
issuable in any authorized denomination and substantially in the form of the
definitive Debt Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security shall be authenticated by the Trustee or the Authenticating Agent upon
the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities in lieu of which they are issued.
Without unreasonable delay the Company will execute and deliver to the Trustee
definitive Debt Securities of such series and thereupon any or all temporary
Debt Securities of such series may be surrendered in exchange therefor, at the
option of the Holders thereof, at any offices or agencies as may be designated
and maintained by the Company for such purpose in accordance with the provisions
of Section 4.02, and the Trustee or the Authenticating Agent shall authenticate
and deliver in exchange for such temporary Debt Securities an equal aggregate
principal amount and maturity of definitive Debt Securities of the same series.
Such exchange shall be made by the Company at its own expense and without any
charge therefor. Until so exchanged, the temporary Debt Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities of the same series.
SECTION 2.09. CANCELLATION OF DEBT SECURITIES PAID. All Debt Securities
surrendered for the purpose of payment, redemption, repayment, exchange or
registration of transfer or for credit against any sinking fund shall, if
surrendered to the Company, any Debt Security registrar, any Authenticating
Agent, any paying agent or any other agent of the Company or of the Trustee, be
delivered to the Trustee and promptly cancelled by it, or, if surrendered to
the Trustee, shall be promptly cancelled by it, and no Debt Securities shall be
issued in lieu thereof except as expressly permitted by any of the provisions
of this Indenture. The Trustee may dispose of cancelled Debt Securities in
accordance with its standard procedures and deliver a certificate of such
disposition to the Company or, at the written request of the Company, shall
deliver cancelled Debt Securities to the Company. If the Company shall acquire
any of the Debt Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debt
Securities unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.10. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 2.02 for Debt Securities of any series, interest on the
Debt Securities of each series shall be computed on the basis of a 360-day year
of twelve 30-day months.
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ARTICLE THREE
REDEMPTION OF DEBT SECURITIES; SINKING FUNDS
SECTION 3.01. APPLICABILITY OF ARTICLE. The provisions of this Article Three
shall be applicable, as the case may be, (i) to the Debt Securities of any
series which are redeemable before their maturity and (ii) to any sinking fund
for the retirement of Debt Securities of any series, in either case except as
otherwise specified as contemplated by Section 2.02 for Debt Securities of such
series.
The minimum amount of any sinking fund payment provided for by the terms of
Debt Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Debt Securities of any series is herein referred to as an "optional
sinking fund payment".
SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES. In case the
Company shall desire to exercise any right to redeem all, or, as the case may
be, any part of, the Debt Securities of any series in accordance with their
terms, it shall fix a date for redemption and shall mail or cause to be mailed a
notice of such redemption at least 30 and not more than 60 days prior to the
date fixed for redemption to the Holders of Debt Securities of such series so to
be redeemed as a whole or in part at their last addresses as the same appear on
the registry books of the Company and to the Trustee, except as the resolution
adopted by the Board of Directors or the provisions of an indenture supplemental
hereto to establish the terms of any series of Debt Securities may otherwise
provide. Such mailing shall be by first class mail. The notice if mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the Holder of any Debt
Security of a series designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Debt
Security of such series.
Each such notice of redemption shall specify the date fixed for redemption,
the redemption price at which the Debt Securities of such series are to be
redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Debt Securities, that any interest accrued to
the date fixed for redemption will be paid as specified in said notice, and that
on and after said date any interest thereon or on the portions thereof to be
redeemed will cease to accrue. If less than all the Debt Securities of a series
are to be redeemed the notice of redemption shall specify the number or numbers
of the Debt Securities of that series to be redeemed. In case any Debt Security
of a series is to be redeemed in part only, the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state that
on and after the date fixed for redemption, upon surrender of such Debt
Security, a new Debt Security or Debt Securities of that series in principal
amount equal to the unredeemed portion thereof will be issued.
On or before the redemption date specified in the notice of redemption given
as provided in this Section 3.02, the Company will deposit with the Trustee or
with one or more paying agents (or if the Company is acting as its own paying
agent will segregate and hold in trust as provided in Section 4.04) an amount of
money sufficient to redeem on the redemption date all the Debt Securities or
portions thereof so called for redemption, together with accrued interest
thereon to the date fixed for redemption. If less than all the Debt Securities
of a series are to be redeemed the Company will give the Trustee notice not less
than 50 days prior to the redemption date as to the aggregate principal amount
and maturity of Debt Securities of such series to be redeemed. The Trustee shall
select in such manner as it shall deem appropriate and fair or cause to be
selected by lot, the Debt Securities of that series or portions thereof to be
redeemed and shall promptly notify the Company in writing of the Debt Securities
to be redeemed. Debt Securities of a series may be redeemed in part only in
multiples of the smallest authorized denomination of that series.
SECTION 3.03. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION. If notice of
redemption has been given as provided in Section 3.02 or Section 3.05, the Debt
Securities or portions of Debt Securities of the series with respect to which
such notice has been given shall become due and payable on the date and at the
place or places stated in such notice at the applicable redemption price,
together with any interest accrued to
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the date fixed for redemption, and on and after said date (unless the Company
shall default in the payment of such Debt Securities or portions of such Debt
Securities, together with any interest accrued to said date) any interest on the
Debt Securities of such series or portions of Debt Securities of such series so
called for redemption shall cease to accrue. On presentation and surrender of
such Debt Securities at a place of payment in said notice specified, such Debt
Securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with any interest accrued
thereon to the date fixed for redemption; provided, however, that any
installment of interest becoming due on or prior to the date fixed for
redemption shall be payable to Holders of such Debt Securities registered as
such on the relevant record date according to their terms.
Upon presentation of any Debt Security redeemed in part only, the Company
shall execute a new Debt Security or Debt Securities and the Trustee or the
Authenticating Agent shall authenticate and deliver to the Holder thereof, at
the expense of the Company, such new Debt Security or Debt Securities of the
same series, of authorized denominations, in an aggregate principal amount equal
to the unredeemed portion of the Debt Security so presented.
SECTION 3.04. SATISFACTION OF MANDATORY SINKING FUND PAYMENTS WITH DEBT
SECURITIES. In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Debt Securities of a series in cash, the Company may
at its option (a) deliver to the Trustee Debt Securities of that series
theretofore purchased or otherwise acquired by the Company, or (b) receive
credit for the principal amount of Debt Securities of that series which have
been redeemed either at the election of the Company pursuant to the terms of
such Debt Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Debt Securities; provided that such
Debt Securities have not been previously so credited. Such Debt Securities shall
be received and credited for such purpose by the Trustee at the redemption price
specified in such Debt Securities for redemption through operation of the
sinking fund and the amount of such mandatory sinking fund payment shall be
reduced accordingly.
SECTION 3.05. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not less than 50
days prior to each sinking fund payment date for any series of Debt Securities,
the Company will deliver to the Trustee a certificate signed by a Vice President
or the Treasurer or any Assistant Treasurer of the Company 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 (which cash may be deposited with the Trustee or with one or more paying
agents, or if the Company is acting as its own paying agent segregated and held
in trust as provided in Section 4.04) and the portion thereof, if any, which is
to be satisfied by delivering and crediting Debt Securities of that series
pursuant to Section 3.04 (which Debt Securities, if not theretofore delivered,
will accompany such certificate, such certificate to set forth the basis for
such credit and to state that such Debt Securities have not been previously so
credited) and whether the Company intends to exercise its right to make a
permitted optional sinking fund payment with respect to such series. Such
certificate shall also state that no Event of Default has occurred and is
continuing with respect to such series. Such certificate shall be irrevocable
and upon its delivery the Company shall be obligated to make the cash payment or
payments therein referred to, if any, on or before the next succeeding sinking
fund payment date. In the case of the failure of the Company to deliver such
certificate (or to deliver the Debt Securities specified in this paragraph), the
sinking fund payment due on the next succeeding sinking fund payment date for
that series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of such Debt Securities subject to a mandatory sinking fund
payment without the option to deliver or credit Debt Securities as provided in
Section 3.04 and without the right to make any optional sinking fund payment, if
any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in cash plus
any unused balance of any preceding sinking fund payments made in cash which
shall equal or exceed $100,000 (or a lesser sum if the Company shall so request
or determine) with respect to the Debt Securities of any particular series shall
be applied by the Trustee (or by the Company if the Company is acting as its own
paying agent) on the sinking fund payment date on which such payment is made
(or, if such payment is made before a sinking
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fund payment date, on the next sinking fund payment date following the date of
such payment) to the redemption of such Debt Securities at the redemption price
specified in such Debt Securities for operation of the sinking fund together
with accrued interest, if any, to the date fixed for redemption. Any sinking
fund moneys not so applied or allocated by the Trustee (or by the Company if
the Company is acting as its own paying agent) to the redemption of Debt
Securities shall be added to the next cash sinking fund payment received by the
Trustee (or if the Company is acting as its own paying agent, segregated and
held in trust as provided in Section 4.04) for such series and, together with
such payment (or such amount so segregated), shall be applied in accordance
with the provisions of this Section 3.05. Any and all sinking fund moneys with
respect to the Debt Securities of any particular series held by the Trustee (or
if the Company is acting as its own paying agent, segregated and held in trust
as provided in Section 4.04) on the last sinking fund payment date with respect
to Debt Securities of such series and not held for the payment or redemption of
particular Debt Securities of such series shall be applied by the Trustee (or
by the Company if the Company is acting as its own paying agent), together with
other moneys, if necessary, to be deposited (or segregated) sufficient for the
purpose, to the payment of the principal of the Debt Securities of that series
at maturity.
The Trustee shall select or cause to be selected the Debt Securities to be
redeemed upon such sinking fund payment date in the manner specified in the
last paragraph of Section 3.02 and the Company shall cause notice of the
redemption thereof to be given in the manner provided in Section 3.02 except
that the notice of redemption shall also state that the Debt Securities are
being redeemed by operation of the sinking fund. Such notice having been duly
given, the redemption of such Debt Securities shall be made upon the terms and
in the manner stated in Section 3.03.
On or before each sinking fund payment date, the Company shall pay to the
Trustee in cash (or if the Company is acting as its own paying agent will
segregate and hold in trust as provided in Section 4.04) a sum equal to any
interest accrued to the date fixed for redemption of Debt Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section.
Neither the Trustee nor the Company shall redeem any Debt Securities of a
series with sinking fund moneys or mail any notice of redemption of such Debt
Securities by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on such Debt
Securities or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to such Debt Securities,
except that if the notice of redemption of any such Debt Securities shall
theretofore have been mailed in accordance with the provisions hereof, the
Trustee (or the Company if the Company is acting as its own paying agent) shall
redeem such Debt Securities if cash sufficient for that purpose shall be
deposited with the Trustee (or segregated by the Company) for that purpose in
accordance with the terms of this Article. Except as aforesaid, any moneys in
the sinking fund for such series at the time when any such default or Event of
Default shall occur and any moneys thereafter paid into such sinking fund
shall, during the continuance of such default or Event of Default, be held as
security for the payment of such Debt Securities; provided, however, that in
case such default or Event of Default shall have been cured or waived as
provided herein, such moneys shall thereafter be applied on the next sinking
fund payment date for such Debt Securities on which such moneys may be applied
pursuant to the provisions of this Section.
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ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees for the benefit of each series of Debt Securities that it
will duly and punctually pay or cause to be paid the principal of, premium, if
any, and interest, if any, on each of the Debt Securities of that series at the
places, at the respective times and in the manner provided in such Debt
Securities.
SECTION 4.02. OFFICES FOR NOTICES AND PAYMENTS. As long as any of the Debt
Securities of a series remain outstanding, the Company will designate and
maintain, an office or agency in such Place of Payment where the Debt Securities
of that series may be presented for payment, an office or agency where the Debt
Securities of that series may be presented for registration of transfer and for
exchange as in this Indenture provided and an office or agency where notices and
demands to or upon the Company in respect of the Debt Securities of that series
or this Indenture may be served. In addition to such office or offices or agency
or agencies, the Company may from time to time designate and maintain one or
more additional offices or agencies, where the Debt Securities of that series
may be presented for registration of transfer or for exchange, and the Company
may from time to time rescind such designation, as it may deem desirable or
expedient. The Company will give to the Trustee written notice of the location
of each such office or agency and of any change of location thereof. In case the
Company shall fail to maintain such office or agency, or shall fail to give such
notice of the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Principal Office of the
Trustee.
The Company hereby initially designates the offices of the Trustee located at
Corporate Trust Operations NC 1153, Main Building 11th Floor, 230 South Tryon
Street, Charlotte, North Carolina 28288 and 40 Broad Street, 5th Floor - Suite
550, New York, New York 10004, as the offices or agencies of the Company, where
the Debt Securities of each series may be presented for payment, for
registration of transfer and for exchange as in this Indenture provided and
where notices and demands to or upon the Company in respect of the Debt
Securities of each series or this Indenture may be served. The Trustee is also
designated as repository pursuant to Section 2.06 for the master list of the
names and addresses of the Holders of the Debt Securities of each series.
SECTION 4.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The Company,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 7.08, a successor trustee, so that
there shall at all times be a Trustee with respect to each series of Debt
Securities hereunder.
SECTION 4.04. PROVISIONS AS TO PAYING AGENT. (a) If the Company shall appoint
a paying agent other than the Trustee with respect to the Debt Securities of any
series, it will cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 4.04,
(1) that it will hold all sums held by it as such agent for the payment of
the principal of, premium, if any, or interest, if any, on the Debt Securities
of such series (whether such sums have been paid to it by the Company or by
any other obligor on the Debt Securities of such series) in trust for the
benefit of the Holders of the Debt Securities of such series or of the
Trustee, as the case may be, until such sums shall be paid to the Holders or
to the Trustee, and will notify the Trustee of the receipt of sums to be so
held;
(2) that it will give the Trustee notice of any failure by the Company (or
by any other obligor on the Debt Securities of such series) to make any
payment of the principal of, premium, if any, or interest, if any, on the Debt
Securities of such series when the same shall be due and payable; and
(3) that at any time during the continuance of any failure by the Company
(or by any other obligor on the Debt Securities of such series) specified in
the preceding paragraph (2), such paying agent will, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by it.
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(b) If the Company shall act as its own paying agent with respect to the Debt
Securities of any series, it will, on or before each due date of the principal
of, premium, if any, or interest, if any, on the Debt Securities of such series,
set aside, segregate and hold in trust for the benefit of the Holders of such
Debt Securities a sum sufficient to pay such principal, premium, if any, or
interest, if any, so becoming due and will promptly notify the Trustee of any
failure to take such action and of any failure by the Company (or by any other
obligor on the Debt Securities of such series) to make any payment of the
principal of, premium, if any, or interest, if any, on the Debt Securities of
such series when the same shall become due and payable.
(c) Anything in this Section 4.04 to the contrary notwithstanding the Company
may, at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by it, or any paying agent hereunder, as required by this
Section, such sums to be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section 4.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.04 is subject to
Sections 12.03 and 12.04.
(e) Whenever the Company shall have one or more paying agents with respect to
the Debt Securities of any series, it will, prior to each due date of the
principal of, premium, if any, or interest, if any, on the Debt Securities of
such series, deposit with a designated paying agent a sum sufficient to pay the
principal, premium, if any, and interest, if any, so becoming due, such sum to
be held in trust for the benefit of the persons entitled to such principal,
premium, if any, or interest, if any, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of any failure so to act.
SECTION 4.05. STATEMENT AS TO COMPLIANCE. The Company will deliver to the
Trustee on or before January 1 in each year (beginning with the first January 1
which is not less than 60 days following the first date of issuance of any
series of Debt Securities under this Indenture) a certificate complying with
Section 314(a)(4) of the Trust Indenture Act of 1939.
ARTICLE FIVE
HOLDER LISTS AND REPORTS BY THE TRUSTEE
SECTION 5.01. HOLDER LISTS. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee with respect to the Debt
Securities of each series, (i) semiannually, not more than 15 days after each
July 1 and January 1 and (ii) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Company of any such request, a list
in such form as the Trustee may reasonably require of the names and addresses of
the Holders of Debt Securities of such series as of a date not more than 15 days
prior to the time such information is furnished; provided, however, that if and
so long as the Trustee shall be designated by the Company to act as repository
in accordance with the provisions of Section 2.06, such list shall not be
required to be furnished.
SECTION 5.02. DELIVERY OF REPORTS BY THE TRUSTEE. The reports to be
transmitted by the Trustee pursuant to the requirements of Section 313 of the
Trust Indenture Act of 1939 shall be required to be transmitted on or before the
first July 15 which is not less than sixty days following the first date of
issuance of any series of Debt Securities under this Indenture, and on or before
July 15 in every year thereafter, so long as any Debt Securities are outstanding
hereunder, each such report to be dated as of the preceding May 15.
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ARTICLE SIX
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. "Event of Default" whenever used herein with
respect to Debt Securities of any series means any one of the following events
and such other events as may be established with respect to the Debt Securities
of such series as contemplated by Section 2.02 hereof, continued for the period
of time, if any, and after the giving of notice, if any, designated in this
Indenture or as may be established with respect to such Debt Securities as
contemplated by Section 2.02 hereof, as the case may be, unless it is either
inapplicable or is specifically deleted or modified in the applicable resolution
of the Board of Directors or in the supplemental indenture under which such
series of Debt Securities is issued, as the case may be, as contemplated by
Section 2.02:
(a) default in the payment of any installment of interest upon any Debt
Security of such series as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of, or premium, if any, on any
Debt Security of such series as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration, repayment or otherwise,
and continuance of such default for a period of 10 days; or
(c) default in the making or satisfaction of any sinking fund payment as and
when the same shall become due and payable by the terms of the Debt Securities
of such series, and continuance of such default for a period of 10 days; or
(d) failure on the part of the Company, duly to observe or perform any other
of the covenants or agreements on the part of the Company in respect of the
Debt Securities of such series contained in this Indenture (other than a
covenant or agreement in respect of the Debt Securities of such series in
default in whose observance or performance is elsewhere in this Section
specifically dealt with) continued for a period of 60 days after the date on
which written notice of such failure, requiring the Company to remedy the
same, shall have been given by registered mail to the Company by the Trustee,
or to the Company and the Trustee by the Holders of at least twenty-five
percent in aggregate principal amount of the Debt Securities of all series at
the time Outstanding; provided that such a default or breach shall not be an
Event of Default if it cannot with due diligence be cured within such 60-day
period due to causes beyond the control of the Company, unless the Company
shall fail to proceed promptly to cure the same and thereafter prosecute the
curing of such default or breach with diligence and continuity. (In the event
that such default or breach cannot be cured within such 60-day period, before
the expiration of such 60-day period the Company shall furnish an Officers'
Certificate, upon which the Trustee may conclusively rely notwithstanding such
default or breach, to the effect that such default or breach cannot with due
diligence be cured within such 60-day period due to causes beyond the control
of the Company and that the Company has not failed to proceed promptly to cure
the same. Thereafter, from time to time at the request of the Trustee, the
Company shall furnish an Officers' Certificate to the effect that the Company
is prosecuting the curing of such default or breach with diligence and
continuity.); or
(e) a decree or order by a court having jurisdiction in the premises shall
have been entered adjudging the Company a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization of the Company, under the
Federal Bankruptcy Code or any other similar applicable Federal or State law,
and such decree or order shall have continued undischarged and unstayed for a
period of 60 days; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver or liquidator or trustee or
assignee (or other similar official) in bankruptcy or insolvency of the
Company, or of all or substantially all of the property of the Company, or for
winding up or liquidation of the affairs of the Company shall have been
entered, and such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or
(f) the Company shall institute proceedings to be adjudicated a voluntary
bankrupt, or shall consent to the filing of a bankruptcy proceeding against
it, or shall file a petition or answer or consent seeking reorganization under
the Federal Bankruptcy Code or any other similar applicable Federal or State
law,
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or shall consent to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee (or other
similar official), in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due; or
(g) any other Event of Default provided in the applicable resolution of the
Board of Directors or in the supplemental indenture under which such series of
Debt Securities is issued, as the case may be, as contemplated by Section
2.02.
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Debt Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than twenty-five percent in aggregate principal amount of the Outstanding Debt
Securities of such series or, in the case of an Event of Default specified in
clause (d), (e) or (f) of this Section 6.01, of all series (voting as a class)
with respect to which such Event of Default has occurred and is continuing, by
notice in writing to the Company (and to the Trustee if given by Holders), may
declare the principal amount (or, if the Debt Securities of such series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of such series) of all the Debt Securities of that
series (or, in the case of an Event of Default specified in clauses (d), (e) or
(f) of this Section 6.01, of all of the Debt Securities of all series with
respect to which such Event of Default has occurred and is continuing) and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Debt Securities of such series
contained to the contrary notwithstanding. This provision, however, is subject
to the condition that if, at any time after the principal amount (or, if the
Debt Securities of such series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such series)
of the Debt Securities of any series shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest, if any, upon all of the Debt Securities of such series
and the principal of, and premium, if any, on any and all Debt Securities of
such series which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest (to the extent that payment of such
interest is enforceable under applicable law) and on such principal at the same
rate as the rate of interest specified in the Debt Securities of such series, to
the date of such payment or deposit) and all amounts payable to the Trustee
pursuant to the provisions of Section 7.05 and any and all defaults under this
Indenture with respect to such series of Debt Securities, other than the
nonpayment of principal of and accrued interest on Debt Securities of such
series which shall have become due solely by acceleration, shall have been
remedied or cured or waived or provision shall have been made therefor to the
satisfaction of the Trustee, then and in every such case the Holders of a
majority in aggregate principal amount of the Debt Securities of such series
then Outstanding, by written notice to the Company and to the Trustee, may waive
all defaults with respect to such series and rescind and annul such declaration
and its consequences; but no such waiver or recission or annulment shall extend
to or shall affect any subsequent default or shall impair any right consequent
thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company and the
Trustee and the Holders shall continue as though no such proceedings had been
taken.
SECTION 6.02. PAYMENT OF DEBT SECURITIES ON DEFAULT; SUIT THEREFOR. The
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon any Debt Security of any series as and when the
same shall become due and payable, and such default shall have continued for a
period of 30 days, or (b) in case default shall be made in payment of the
principal of, or premium, if any, on any Debt Security of any series as and when
the same shall become due and payable, whether at maturity of the Debt
Securities of that series or upon redemption or by declaration, repayment or
otherwise, and such default
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shall have continued for a period of ten days or (c) in case of default in the
making or satisfaction of any sinking fund payment when the same becomes due by
the terms of the Debt Securities of any series, and such default shall have
continued for a period of ten days--then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the Holder of any such Debt
Security (or Holders of any series of Debt Securities in the case of clause (c)
above) the whole amount that then shall have become due and payable on any such
Debt Security (or securities of any such series in the case of clause (c)
above) for principal, premium, if any, and interest, if any, with interest upon
the overdue principal and premium, if any, and (to the extent that payment of
such interest is enforceable under applicable law) upon the overdue
installments of interest, if any, at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the Debt Security of that series (or Debt Securities of any such series in
the case of clause (c) above); and, in addition thereto, such further amount as
shall be sufficient to cover costs and expenses of collection, and any further
amounts payable to the Trustee pursuant to the provisions of Section 7.05.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Company, or any other obligor upon
such Debt Securities, and collect in the manner provided by law out of the
property of the Company or any other obligor on such Debt Securities, wherever
situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Debt Securities of
any series, under the Federal Bankruptcy Code or any other similar applicable
Federal or State law, or in case a receiver or trustee (or other similar
official) shall have been appointed for the property of the Company, or such
other obligor upon such Debt Securities, or in the case of any other similar
judicial proceedings relative to the Company, or other obligor on the Debt
Securities of any series, or to the creditors or property of the Company or
such other obligor upon such Debt Securities, the Trustee, irrespective of
whether the principal of the Debt Securities of any series shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to the
provisions of this Section 6.02, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal (or, if the Debt Securities of any
series are Original Issue Discount Securities, such portion of the principal
amount as may be due and payable with respect to such series pursuant to a
declaration in accordance with Section 6.01), premium, if any, and interest, if
any, owing and unpaid in respect of the Debt Securities of any series and, in
case of any judicial proceedings, to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of
the Trustee and of the Holders of Debt Securities of any series allowed in such
judicial proceedings relative to the Company, or any other obligor on the Debt
Securities of any series, its or their creditors, or its or their property, and
to collect and receive any moneys or other property payable or deliverable on
any such claims, and to distribute the same after the deduction of costs and
expenses of collection, and any further amounts payable to the Trustee pursuant
to the provisions of Section 7.05 and incurred by it up to the date of such
distribution; and any receiver, assignee or trustee (or other similar official)
in bankruptcy or reorganization is hereby authorized by each of the Holders 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 costs and expenses of collection and any further amounts payable to the
Trustee pursuant to the provisions of Section 7.05 and incurred by it up to the
date of such distribution.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of Debt
Securities any plan of reorganization, arrangement, adjustment or composition
affecting any of the Debt Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect to the claim of any
Holder of Debt Securities in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under
the Debt Securities of any series, may be enforced by the Trustee without the
possession of any of the Debt Securities of such series or
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the production thereof in any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall be
for the ratable benefit of the Holders of the Debt Securities in respect of
which such action was taken. In any proceedings brought by the Trustee (and
also any proceedings in which a declaratory judgment of a court may be sought
as to the interpretation or construction of any provision of this Indenture, to
which the Trustee shall be a party) the Trustee shall be held to represent all
the Holders of the Debt Securities to which such proceedings relate, and it
shall not be necessary to make any Holders of such Debt Securities parties to
any such proceedings.
SECTION 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
collected by the Trustee pursuant to this Article shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Debt Securities in respect of
which moneys have been collected, and the notation thereon of the payment, if
only partially paid, and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee pursuant to the
provisions of Section 7.05;
Second: In case the principal of the Outstanding Debt Securities in
respect of which such moneys have been collected shall not have become due
(at maturity, upon redemption, by declaration, repayment or otherwise) and
be unpaid, to the payment of interest, if any, on such Debt Securities, in
the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in such Debt Securities, such payments to be
made ratably to the persons entitled thereto;
Third: In case the principal of the Outstanding Debt Securities in
respect of which such moneys have been collected shall have become due (at
maturity, upon redemption, by declaration, repayment or otherwise), to the
payment of the whole amount then owing and unpaid upon such Debt Securities
for principal, premium, if any, and interest, if any, with interest on the
overdue principal, and premium, if any, and (to the extent that such
interest has been collected by the Trustee) upon overdue installments of
interest, if any, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in
such Debt Securities; and in case such moneys shall be insufficient to pay
in full the whole amount so due and unpaid upon such Debt Securities, then
to the payment of such principal, premium, if any, and interest, if any,
without preference or priority of principal, and premium, if any, over
interest, if any, or of interest, if any, over principal, and premium, if
any, or of any installment of interest, if any, over any other installment
of interest, if any, or of any such Debt Security over any other such Debt
Security, ratably to the aggregate of such principal, premium, if any, and
accrued and unpaid interest, if any; and
Fourth: To the payment of the remainder, if any, to the Company, to the
extent such moneys were provided thereby, their respective successors or
assigns, or to whosoever may be lawfully entitled to receive the same, or
as a court of competent jurisdiction may direct.
SECTION 6.04. PROCEEDINGS BY HOLDERS OF DEBT SECURITIES. No Holder of any
Debt Security of any series shall have any right by virtue of or by availing
itself of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee (or other similar official), or
for any other remedy hereunder, unless such Holder previously shall have given
to the Trustee written notice of default with respect to Debt Securities of
such series and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of not less than twenty-five percent in aggregate
principal amount of the Debt Securities of such series then Outstanding or, in
the case of an Event of Default specified in clause (d), (e) or (f) of Section
6.01, of all series (voting as a class) with respect to which such Event of
Default has occurred and is continuing, shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
security and indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60
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days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding, it
being understood and intended, and being expressly covenanted by the taker and
Holder of every Debt Security with every other taker and Holder and the
Trustee, that no one or more Holders of Debt Securities of such series 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 Holder of Debt Securities of such series, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Debt Securities of such series.
SECTION 6.05. PROCEEDINGS BY TRUSTEE. In case of an Event of Default
hereunder the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 6.06. REMEDIES CUMULATIVE AND CONTINUING. All powers and remedies
given by this Article Six to the Trustee or to the Holders of Debt Securities
of any series shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any thereof or of any other powers and remedies available to
the Trustee or the Holders of such Debt Securities, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Holder of any such Debt Securities to exercise any right or power
accruing upon any default occurring and continuing as aforesaid shall impair
any such right or power, or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to the provisions of Section
6.04, every power and remedy given by this Article Six or by law to the Trustee
or to the Holders of Debt Securities of any series may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee or by the
Holders of Debt Securities of such series.
SECTION 6.07. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY HOLDERS OF
DEBT SECURITIES. The Holders of a majority (voting as one class) in aggregate
principal amount of the Debt Securities of each series affected at the time
Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Debt Securities of such series; provided, however, that (subject to the
requirements of Section 315 of the Trust Indenture Act of 1939) the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, determines that the action or proceeding so directed
may not lawfully be taken or if the Trustee in good faith by a Responsible
Officer shall determine that the action or proceeding so directed could involve
the Trustee in personal liability or expense materially in excess of any
indemnity offered pursuant to Section 7.05 hereof. The Holders of a majority in
aggregate principal amount of the Debt Securities of such series at the time
Outstanding may on behalf of the Holders of all of the Debt Securities of such
series waive any past default or Event of Default with respect to such series
and its consequences except a default in the payment of interest, if any, on,
or the principal of or premium, if any, on any Debt Security of such series, or
in the payment of any sinking fund installment with respect to Debt Securities
of such series. Upon any such waiver the Company, the Trustee and the Holders
of the Debt Securities of that series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section 6.07, said default or Event of
Default shall for all purposes of the Debt Securities of such series and this
Indenture be deemed to have been cured and to be not continuing.
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ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. RELIANCE ON DOCUMENTS AND OPINIONS. Subject to the requirements
of Section 315 of the Trust Indenture Act of 1939:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, omitted or suffered to be taken by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of 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 therein or thereby;
(e) the Trustee shall not be liable for any action taken, omitted or
suffered by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(f) the Trustee shall not be bound to make any inquiry or investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, note, or other paper or document unless requested in writing to do so
by the Holders of a majority in aggregate principal amount of the Debt
Securities of any series affected then outstanding; provided, however, that
if the payment within a reasonable time to the Trustee of the costs and
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security conferred upon it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding; and the reasonable
expense of such investigation shall be paid by the Company or, if paid by
the Trustee, shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 7.02. RESPONSIBILITY FOR RECITALS. The recitals contained herein and
in the Debt Securities (except in the certificates of authentication of the
Trustee and the Authenticating Agent) shall be taken as the statements of the
Company, and the Trustee and the Authenticating Agent assume no responsibility
for the correctness of the same. The Trustee and the Authenticating Agent make
no representations as to the validity or sufficiency of this Indenture or the
Debt Securities, provided that neither the Trustee nor the Authenticating Agent
shall be relieved of its duty to authenticate Debt Securities only as
authorized by this Indenture. The Trustee and the Authenticating Agent shall
not be accountable for the use or application by the Company of any of the Debt
Securities or of the proceeds thereof.
SECTION 7.03. OWNERSHIP OF DEBT SECURITIES. The Trustee or any Authenticating
Agent and any agent of the Company or of the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Debt Securities with the
same rights it would have if it were not Trustee, Authenticating Agent or such
agent.
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SECTION 7.04. MONEYS TO BE HELD IN TRUST. Subject to the provisions of
Sections 12.03 and 12.04 hereof, all moneys received by the Trustee or any
paying agent shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. Neither the Trustee nor any
paying agent shall be under any liability for interest on any moneys received by
it hereunder except such as it may agree with the Company to pay thereon. So
long as no Event of Default shall have occurred and be continuing, all interest
allowed on any such moneys shall be paid from time to time upon Company Order.
SECTION 7.05. COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants and
agrees to pay the Trustee from time to time, and the Trustee shall be entitled
to, reasonable compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) and, except as
otherwise expressly provided, the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
agents or counsel and of all persons not regularly in its employ) except any
such expense, disbursement or advance as may be attributable to its negligence
or bad faith. If any property other than cash shall at any time be subject to
the lien of this Indenture, the Trustee, if and to the extent authorized by a
receivership or bankruptcy court of competent jurisdiction or by the
supplemental instrument subjecting such property to such lien, shall be entitled
to make advances for the purpose of preserving such property or of discharging
tax liens or other prior liens or encumbrances thereon. The Company also
covenants to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on the part
of the Trustee, arising out of or in connection with the acceptance or
administration of this trust and its duties hereunder, including the costs and
expenses of defending itself against any claim of liability in the premises. The
obligations of the Company under this Section 7.05 to compensate the Trustee, to
pay or reimburse the Trustee for expenses, disbursements and advances and to
indemnify the Trustee shall constitute additional indebtedness hereunder. Such
additional indebtedness shall be secured by a lien prior to that of the Debt
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 Debt
Securities.
SECTION 7.06. OFFICERS' CERTIFICATE AS EVIDENCE. Subject to the requirements
of Section 315 of the Trust Indenture Act of 1939, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking,
omitting or suffering any action to be taken hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved by an Officers' Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, omitted or
suffered by it under the provisions of this Indenture upon the faith thereof.
SECTION 7.07. ELIGIBILITY OF TRUSTEE. The Trustee hereunder shall at all times
be a corporation organized and doing business under the laws of the United
States or any State, which (a) is authorized under such laws to exercise
corporate trust powers, (b) is subject to supervision or examination by Federal
or State authority, (c) shall have at all times a combined capital and surplus
of not less than ten million dollars and (d) is eligible under the provisions of
the Trust Indenture Act of 1939. If such corporation publishes reports of
condition at least annually, pursuant to law, or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 7.07, the combined capital and surplus of such corporation at any time
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 7.07, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 7.08.
SECTION 7.08. RESIGNATION OR REMOVAL OF TRUSTEE. (a) The Trustee, or any
trustee or trustees hereafter appointed, may at any time resign with respect to
any one or more or all series of Debt Securities by giving written notice of
resignation to the Company and by mailing notice thereof to the Holders of the
applicable series of Debt Securities at their addresses as they shall appear on
the registry books of the Company. Upon receiving such notice of resignation,
the Company shall promptly appoint a successor trustee or trustees with
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respect to the applicable series by written instrument, in duplicate, executed
under authority of the Board of Directors of the Company, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 60 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, or
any Holder who has been a bona fide Holder of a Debt Security or Debt Securities
of the applicable series for at least six months may, subject to the
requirements of Section 315(e) of the Trust Indenture Act of 1939, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall cease to be eligible in accordance with the provisions
of Section 7.07 with respect to any series of Debt Securities and shall fail
to resign after written request therefor by the Company or by any such Holder,
or
(2) the Trustee shall become incapable of acting with respect to any series
of Debt Securities, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then,
in any such case, the Company may remove the Trustee with respect to such
series and appoint a successor trustee with respect to such series by written
instrument, in duplicate, executed under authority of the Board of Directors
of the Company, one copy of which instrument shall be delivered to the Trustee
so removed and one copy to the successor trustee, or, subject to the
requirements of Section 315(e) of the Trust Indenture Act of 1939, any Holder
who has been a bona fide Holder of a Debt 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 removal of the Trustee
and the appointment of a successor trustee with respect to such series. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee with respect to
such series.
(c) The Holders of 66 2/3% in aggregate principal amount of the Debt
Securities of one or more series (each series voting as a class) or all series
at the time Outstanding may at any time remove the Trustee with respect to the
applicable series or all series, as the case may be, and appoint with respect to
the applicable series or all series, as the case may be, a successor trustee by
written notice of such action to the Company, the Trustee and the successor
trustee which shall be deemed appointed as successor trustee with respect to the
applicable series of Debt Securities or all series, as the case may be, unless
within ten days after such nomination the Company objects thereto, in which case
the Trustee so removed or any Holder of a Debt Security of the applicable series
(in the case of any such objection to a nomination of a successor trustee with
respect to such series) or any Holder (in the case of any such objection to a
nomination of a successor trustee with respect to all series), upon the terms,
and conditions and otherwise as in subsection (a) of this Section 7.08 provided,
may petition any court of competent jurisdiction for the appointment of a
successor trustee with respect to such series of Debt Securities or all series,
as the case may be.
(d) Any resignation or removal of the Trustee with respect to any series and
any appointment of a successor trustee with respect to such series pursuant to
any of the provisions of this Section 7.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 7.09.
SECTION 7.09. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee appointed
as provided in Section 7.08 shall execute, acknowledge and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
with respect to any or all applicable series shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations with respect to such
series of its predecessor hereunder, with like effect as if originally named as
trustee herein; but, nevertheless, on the written request of the Company, or of
the successor trustee, the trustee ceasing to
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act shall, upon payment (or due provision therefor) of any amounts then due it
pursuant to the provisions of Section 7.05, execute and deliver an instrument
transferring to such successor trustee all the rights and powers with respect to
such series of the trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing in order
more fully and certainly to vest in and confirm to such successor trustee all
such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
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 7.05.
In case of the appointment hereunder of a successor trustee with respect to
the Debt Securities of one or more (but not all) series, the Company, the
predecessor trustee and each successor trustee with respect to the Debt
Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the predecessor trustee with respect to the Debt Securities of any series as
to which the predecessor trustee is not retiring shall continue to be vested in
the predecessor trustee, and shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such trustee.
No successor trustee with respect to a series of Debt Securities shall accept
appointment as provided in this Section 7.09 unless at the time of such
acceptance such successor trustee shall, with respect to such series, be
qualified under the requirements of the Trust Indenture Act of 1939 and eligible
under the provisions of Section 7.07.
Upon acceptance of appointment by a successor trustee with respect to any
series as provided in Section 7.09, the Company shall mail notice of the
succession of such trustee hereunder to the Holders of Debt Securities of such
series at their addresses as they shall appear on the registry books of the
Company. If the Company fails to mail such notice within ten days after the
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Company.
SECTION 7.10. SUCCESSION BY MERGER. 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 the corporate trust business
of the Trustee, shall be the successor to the Trustee hereunder, provided such
corporation shall be qualified under the requirements of the Trust Indenture Act
of 1939 and eligible under the provisions of Section 7.07, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the trust
created by this Indenture with respect to one or more series of Debt Securities,
any of such Debt Securities shall have been authenticated but not delivered, any
such successor to the Trustee by merger, conversion or consolidation may adopt
the certificate of authentication of any predecessor trustee, and deliver such
Debt Security so authenticated; and in case at that time any of such Debt
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Debt Securities either in the name of such successor to the
Trustee or, if such successor to the Trustee is a successor by merger,
conversion or consolidation, the name of any predecessor hereunder; and in all
such cases such certificate shall have the full force which it is anywhere in
such Debt Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.11. AUTHENTICATING AGENTS. There may be one or more Authenticating
Agents appointed by the Trustee, with the consent of the Company, having power
to act on behalf of the Trustee and subject to its direction in the
authentication and delivery of Debt Securities of one or more series issued upon
exchange or transfer thereof as fully to all intents and purposes as though any
such Authenticating Agent had been expressly authorized to authenticate and
deliver such Debt Securities. Any such Authenticating Agent shall
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at all times be a corporation organized and doing business under the laws of the
United States of America or of any State thereof authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of at least
$5,000,000 and being subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually
pursuant to law or the requirements of such authority, then for the purposes of
this Section 7.11 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 an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect herein specified in this
Section.
Any corporation into which any Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be a
party, or any corporation succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 7.11, without the execution or filing of any paper or any further act on
the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 7.11, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 7.11, and shall give
written notice of such appointment to the Company and to the Holders of Debt
Securities at their addresses as they shall appear on the registry books of the
Company. Any successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent herein.
The Trustee agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services, and the Trustee shall be entitled to
be reimbursed for such payments, subject to Section 7.05. Any Authenticating
Agent shall have no responsibility or liability for any action taken by it as
such in accordance with the directions of the Trustee.
ARTICLE EIGHT
CONCERNING THE HOLDERS
SECTION 8.01. ACTION BY HOLDERS. Whenever in this Indenture it is provided
that the Holders of a specified percentage in aggregate principal amount of the
Debt Securities of any or all series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action) the fact that at the time of taking any such action
the Holders of such specified percentage have joined therein may be evidenced
(a) by any instrument or any number of instruments of similar tenor executed by
such Holders in person or by agent or proxy appointed in writing, or (b) by the
record of such Holders of Debt Securities voting in favor thereof at any meeting
of such Holders duly called and held in accordance with the provisions of
Article Nine, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Holders.
SECTION 8.02. PROOF OF EXECUTION BY HOLDERS. Subject to the requirements of
Section 315 of the Trust Indenture Act of 1939 and Sections 7.01 and 9.05, proof
of the execution of any instrument by a Holder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Debt Securities shall be proved by the registry
books of the Company or by a certificate of the person designated by the Company
to act as repository in accordance with the provisions of Section 2.06.
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The record of any Holders' meeting shall be proved in the manner provided in
Section 9.06.
SECTION 8.03. WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee and any
agent of the Company or of the Trustee may deem the person in whose name a Debt
Security shall be registered upon the books of the Company to be, and may treat
him as, the absolute owner of such Debt Security (whether or not such Debt
Security shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and interest, if any, on such Debt Security and
for all other purposes; and neither the Company nor the Trustee nor any agent of
the Company or the Trustee shall be affected by any notice to the contrary. All
such payments so made to any Holder for the time being, or upon his order, shall
be valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable upon any such Debt Security.
SECTION 8.04. COMPANY-OWNED DEBT SECURITIES DISREGARDED. In determining
whether the Holders of the requisite aggregate principal amount of Debt
Securities have concurred in any demand, request, notice, direction, consent or
waiver under this Indenture, Debt Securities which are owned by the Company or
any other obligor on the Debt Securities with respect to which such
determination is being made, or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any other obligor on the Debt Securities, with respect to which such
determination is being made, shall be disregarded and deemed not to be
Outstanding for the purposes of any such determination; provided, that for the
purposes of determining whether the Trustee shall be protected in relying on any
such demand, request, notice, direction, consent or waiver only Debt Securities
which the Trustee knows are so owned shall be so disregarded.
SECTION 8.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 8.01,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Debt Securities of any or all series, as the case may
be, specified in this Indenture in connection with such action, any Holder of a
Debt Security which is shown by the evidence to be included in the Debt
Securities the Holders of which have consented to such action may, by filing
written notice with the Trustee at its principal office and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Debt Security. Except as aforesaid any such action taken by the Holder of any
Debt Security shall be conclusive and binding upon such Holder and upon all
future Holders of such Debt Security, and any Debt Security issued upon the
registration of transfer thereof, irrespective of whether or not any notation in
regard thereto is made upon such Debt Security or any Debt Security issued in
exchange or substitution therefor.
ARTICLE NINE
HOLDERS' MEETINGS
SECTION 9.01. PURPOSES OF MEETINGS. A meeting of Holders of Debt Securities of
any or all series may be called at any time and from time to time pursuant to
the provisions of this Article Nine for any of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Holders pursuant to any of the provisions of Article Six;
(2) to remove the Trustee and nominate a successor trustee pursuant to the
provisions of Article Seven;
(3) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 10.02; or
(4) to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Debt Securities of
any or all series, as the case may be, under any other provision of this
Indenture or under applicable law.
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SECTION 9.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call a
meeting of Holders of Debt Securities of any or all series to take any action
specified in Section 9.01, to be held at such time and at such place as the
Trustee shall determine. Notice of every meeting of the Holders of Debt
Securities of any or all 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 mailed to Holders of Debt Securities of each series affected at their
addresses as they shall appear on the registry books of the Company. Such notice
shall be mailed not less than 20 nor more than 90 days prior to the date fixed
for the meeting.
SECTION 9.03. CALL OF MEETINGS BY THE COMPANY OR HOLDERS. In case at any time
the Company, pursuant to a resolution of its Board of Directors, or the Holders
of at least twenty-five percent in aggregate principal amount of the Debt
Securities then Outstanding of any series that may be affected by the action
proposed to be taken at the meeting, shall have requested the Trustee to call a
meeting of the Holders of Debt Securities of all series that may be so affected,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within 20 days after receipt of such request, then the Company or such
Holders, in the amount specified above, may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
9.01, by mailing notice thereof as provided in Section 9.02.
SECTION 9.04. QUALIFICATIONS FOR VOTING. To be entitled to vote at any meeting
of Holders a person shall (a) be a Holder of one or more Debt Securities with
respect to which such meeting is being held or (b) be a person appointed by an
instrument in writing as proxy by a Holder of one or more such Debt 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, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 9.05. REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders, in regard to proof of the holding of Debt
Securities 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 think fit.
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 as provided in Section 9.03, in which case the Company or the Holders
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 8.04, at any meeting each Holder of Debt
Securities with respect to which such meeting is being held or proxy shall be
entitled to one vote for each $1,000 principal amount (or in the case of
Original Issue Discount Securities or Debt Securities of such series denominated
in a currency other than Dollars or are denominated in units or composites of
two or more currencies, such principal amount to be determined as of the record
date as provided in the definition of "Outstanding.") of such Debt Securities
held or represented by each Holder; provided, however, that no vote shall be
cast or counted at any meeting in respect of any such Debt Security challenged
as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of such Debt Securities held by him or instruments in writing as
aforesaid duly designating him as the person to vote on behalf of other such
Holders. At any meeting of Holders, the presence of persons holding or
representing Debt Securities in an aggregate principal amount sufficient to take
action on any business for the transaction of which such meeting was called
shall constitute a quorum.
Any meeting of Holders of Debt Securities with respect to which a meeting was
duly called pursuant to the provisions of Section 9.02 or 9.03 may be adjourned
from time to time by a majority of those present, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.
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SECTION 9.06. VOTING. The vote upon any resolution submitted to any meeting of
Holders of Debt Securities with respect to which such meeting is being held
shall be by written ballots on which shall be subscribed the signatures of such
Holders of Debt Securities or of their representatives by proxy and the
principal amount and number or numbers of such Debt Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Holders shall be
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 mailed as provided in Section 9.02. The record shall show the
principal amount of the Debt Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any records so signed and verified shall be conclusive evidence of the matters
therein stated.
SECTION 9.07. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article Nine
shall be deemed or construed to authorize or permit, by reason of any call of a
meeting of Holders of any or all series or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the Holders
of any or all such series under any of the provisions of this Indenture or of
the Debt Securities.
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. The Company
when authorized by resolution of the Board of Directors and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company, as the case may be
pursuant to Article Eleven hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Holders of all or any
series of Debt Securities (and if such covenants are to be for the benefit of
less than all series of Debt Securities, stating that such covenants are
expressly being included for the benefit of such series) as the Board of
Directors of the Company shall consider to be for the protection of the
Holders of such Debt Securities or as may be required by Section 4.03 or
Section 11.02, and to make the occurrence, or the occurrence and continuance,
of a default in any of such additional covenants, restrictions or conditions a
default or an Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction or
condition such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate enforcement
upon such default or may limit the remedies available to the Trustee upon such
default;
(c) to provide for the issuance under this Indenture of Debt Securities in
bearer or coupon form (including securities registrable as to principal only)
and to provide for exchangeability of such Debt Securities with the Debt
Securities of the same series issued hereunder in fully registered form and to
make all appropriate changes for such purpose;
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(d) to establish the form or terms of Debt Securities of any series as
permitted by Sections 2.01 and 2.02;
(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture which shall not adversely affect the interests of
the Holders of any Debt Securities; and
(f) to evidence and provide for the acceptance of appointment hereunder by a
successor trustee with respect to the Debt Securities of one or more series or
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
7.09.
The Trustee is hereby authorized to join with the Company in the execution of
any such supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to, but may in its discretion, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 10.01
may be executed by the Company and the Trustee without the consent of the
Holders of any of the Debt Securities at the time Outstanding, notwithstanding
any of the provisions of Section 10.02.
SECTION 10.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
consent (evidenced as provided in Sections 8.01 and 8.02) of the Holders of not
less than 66 2/3% in aggregate principal amount of the Debt Securities of each
series issued under the Indenture (each series voting as a class) affected by
such supplemental indenture at the time Outstanding, the Company, when
authorized by a resolution of the Board of Directors and the Trustee may from
time to time and at any time 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 any supplemental
indenture or of modifying in any manner the rights of the Holders of the Debt
Securities of each such series; provided, however, that, without the consent of
the Holders of all Debt Securities affected then Outstanding, no such
supplemental indenture shall (i) extend the fixed maturity of any Debt Security,
or reduce the rate or extend the time of payment of interest, if any, thereon,
or reduce the principal amount or premium, if any, thereon, or make the
principal thereof or premium, if any, or interest, if any, thereon payable in
any coin or currency other than that provided in any Debt Security, or reduce
the amount of the principal of an Original Issue Discount Security that would be
due and payable upon an acceleration of the maturity thereof pursuant to Section
6.01 or adversely affect the right of repayment, if any, at the option of the
Holder or (ii) reduce the aforesaid percentage of Debt Securities of any series,
the Holders of which are required to consent to any such supplemental indenture.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Debt Securities, or which modifies
the rights of the Holders of Debt Securities of such series with respect to such
covenant or other provision shall be deemed not to affect the rights under this
Indenture of the Holders of Debt Securities of any other series.
Upon the request of the Company, accompanied by a copy of the resolutions of
the Board of Directors authorizing the execution and delivery of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of Holders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section
10.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such consent shall approve the substance thereof.
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SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL
INDENTURES. Any supplemental indenture executed pursuant to the provisions of
this Article Ten shall comply with the Trust Indenture Act of 1939, as then in
effect. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article Ten, this Indenture shall be deemed to be modified
and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the Holders of Debt Securities shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 10.04. NOTATION ON DEBT SECURITIES. Debt Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Ten may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debt Securities of any series so
modified as to conform, in the opinion of the Trustee and the Board of Directors
of the Company, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company, and such
Debt Securities may be authenticated by the Trustee and delivered in exchange
for the Debt Securities of such series then outstanding.
SECTION 10.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. The Trustee, subject to the requirements of Section 315 of
the Trust Indenture Act of 1939 and Section 7.01, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article Ten.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 11.01. COMPANY MAY NOT CONSOLIDATE EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge or consolidate with any other
Person or sell, convey, transfer or otherwise dispose of all or substantially
all of its assets to any Person, unless (i) the Company shall be the continuing
corporation, or the successor corporation or Person (if other than the Company)
shall, by supplemental indenture satisfactory to the Trustee, executed and
delivered to the Trustee by such corporation or Person, expressly assume the due
and punctual payment of the principal of and, premium, if any, and interest, if
any, on all the Debt Securities, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company, and (ii) the Company or such
successor corporation or Person, as the case may be, shall not, immediately
after such merger or consolidation, or such sale, conveyance, transfer or other
disposition, be in default in the performance of any such covenant or condition.
In the event of any such sale, conveyance (other than by way of lease), transfer
or other disposition, the predecessor company may be dissolved, wound up and
liquidated at any time thereafter.
SECTION 11.02. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any such
consolidation, merger, sale, conveyance (other than by way of lease), transfer
or other disposition, and upon any such assumption by the successor corporation
or Person, such successor corporation or Person shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company and the Company shall be relieved of any further obligation under
this Indenture and under the Debt Securities. Such successor corporation or
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of the Company, any or all of the Debt Securities which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation or Person, instead of the Company
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee or the Authenticating Agent shall authenticate and shall
deliver any Debt Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication, and
any Debt Securities, which such successor corporation or Person thereafter shall
cause to
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be signed and delivered to the Trustee for that purpose. All the Debt Securities
so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Debt Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Debt Securities had been
issued at the date of the execution hereof.
SECTION 11.03. DOCUMENTS TO BE GIVEN TRUSTEE. The Trustee, subject to the
requirements of Section 315 of the Trust Indenture Act of 1939 and Section 7.01,
may receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article Eleven.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE OF INDENTURE OR CERTAIN OBLIGATIONS
SECTION 12.01. DISCHARGE OF INDENTURE. When (a) the Company shall deliver to
the Trustee for cancellation all Debt Securities of a series theretofore
authenticated (other than any Debt Securities of such series which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.07) and not theretofore cancelled; or (b) all Debt
Securities of such series not theretofore cancelled or delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption all of the Debt Securities of
such series (other than any Debt Securities of such series which shall have been
mutilated, destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.07) not theretofore cancelled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest,
if any, due or to become due to such date of maturity or redemption date, as the
case may be, but excluding, however, the amount of any money for the payment of
the principal of and premium, if any, or interest, if any, on the Debt
Securities of such series (1) theretofore deposited with the Trustee with
respect to Debt Securities of such series and repaid by the Trustee to the
Company in accordance with the provisions of Section 12.04 or (2) paid with
respect to Debt Securities of such series to any State or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in either
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect with respect to the Debt Securities of such series except as to (A) the
rights of Holders of Debt Securities of such series to receive solely from funds
deposited by the Company with the Trustee, in trust as described above in this
Section 12.01, payment of the principal of, premium, if any, and the interest,
if any, on such Debt Securities when such payments are due; (B) the Company's
obligations with respect to such Debt Securities under Sections 2.06, 2.07, 4.02
and 12.03; and (C) the rights, powers, duties and immunities of the Trustee
hereunder, and the Trustee, on demand of the Company accompanied by 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 and at the cost and expense of the Company, shall
execute such instruments as may be requested by the Company acknowledging
satisfaction of and discharging this Indenture with respect to such series of
Debt Securities.
SECTION 12.02. DISCHARGE OF OBLIGATIONS. At the Company's option, either (a)
the Company shall be deemed to have been Discharged (as defined below) from its
obligations with respect to any series of Debt Securities on the ninety-first
day after the applicable conditions set forth below have been satisfied or (b)
the Company shall cease to be under any obligation to comply with any term,
provision or condition set forth in Sections 11.01 and 11.02 with respect to any
series of Debt Securities and any other covenants provided in a resolution
delivered to the Trustee pursuant to Section 2.02 hereof or an indenture
supplemental hereto with respect to such series of Debt Securities at any time
after the applicable conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited irrevocably
with the Trustee as trust funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders
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<PAGE>
of the Debt Securities of such series (A) money in an amount, or (B) U.S.
Government Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms will provide, not later than
one business day before the due date of any payment, money in an amount, or
(C) a combination of (A) and (B), sufficient, in the opinion (with respect to
(A) and (B)) of a nationally recognized firm of independent public accountants
selected by the Company expressed in a written certification thereof delivered
to the Trustee, to pay and discharge each installment of principal (including
mandatory sinking fund payments) of, premium, if any, and interest, if any,
on, the Outstanding Debt Securities of such series on the dates such
installments of principal, premium, if any, and interest, if any, are due
(taking into account any redemption pursuant to optional sinking fund payments
notice of which redemption is provided to the Trustee at the time of the
deposit referred to in this paragraph (1));
(2) if the Debt Securities of such series are then listed on the New York
Stock Exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
paragraph would not cause such Debt Securities to be delisted;
(3) no Event of Default with respect to the Debt Securities of such series
under Sections 6.01(a), 6.01(b), 6.01(c), or 6.01(f) of this Indenture shall
have occurred and be continuing on the date of such deposit and the Company
shall have furnished an Officer's Certificate to such effect;
(4) the Company shall have delivered to the Trustee (a) an Opinion of
Counsel or (b) a ruling from, or published by, the Internal Revenue Service,
whichever of (a) or (b) the Company shall determine, to the effect that
Holders of the Debt Securities of such series will not recognize income, gain
or loss for Federal income tax purposes as a result of the Company's exercise
of its option under this Section 12.02 and will be subject to Federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such option had not been exercised.
"Discharged" means, for purposes of this Section 12.02, that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by,
and obligations under, the Debt Securities of such series and to have satisfied
all the obligations under this Indenture relating to the Debt Securities of such
series (and the Trustee, at the expense of the Company, shall execute such
instruments as may be requested by the Company acknowledging the same), except
(A) the rights of Holders of Debt Securities of such series to receive, solely
from the trust fund described above, payment of the principal of, premium, if
any, and the interest, if any, on such Debt Securities when such payments are
due; (B) the Company's obligations with respect to such Debt Securities under
Sections 2.06, 2.07, 4.02 and 12.03; and (C) the rights, powers, duties and
immunities of the Trustee hereunder.
SECTION 12.03. DEPOSITED MONEYS TO BE HELD IN TRUST BY TRUSTEE. All moneys and
U.S. Government Obligations deposited with the Trustee pursuant to the
provisions of Section 12.01 or 12.02 and the principal and interest in respect
of U.S. Government Obligations shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Company if
acting as its own paying agent), to the Holders of the particular Debt
Securities for payment or redemption of which such moneys have been deposited
with the Trustee, of all sums due and to become due thereon for principal,
premium, if any, and interest, if any.
SECTION 12.04. PAYING AGENT TO REPAY MONEYS HELD. Upon the satisfaction and
discharge of this Indenture all moneys then held by any paying agent of the Debt
Securities (other than the Trustee) shall, upon demand of the Company, be repaid
to the Company (to the extent such money shall have been deposited by the
Company) or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such moneys.
SECTION 12.05. RETURN OF UNCLAIMED MONEYS. Any moneys deposited with or paid
to the Trustee or a paying agent by the Company for payment of the principal of,
premium, if any, or interest, if any, on Debt Securities of any series and not
applied but remaining unclaimed by the Holders of Debt Securities of that
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<PAGE>
series for two years after the date upon which the principal of, premium, if
any, or interest, if any, on such Debt Securities, as the case may be, shall
have become due and payable, shall be repaid to the Company by the Trustee or
such paying agent on written demand and thereupon all liability of the Trustee
or such paying agent with respect to such money shall cease; and the Holder of
any such Debt Securities shall thereafter look only to the Company for any
payment which such Holder may be entitled to collect.
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 13.01. INDENTURE AND DEBT SECURITIES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of, premium, if any, or interest, if
any, on any Debt Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any Debt Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debt Securities.
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
SECTION 14.01. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the covenants,
stipulations, promises and agreements by the Company in this Indenture contained
shall bind their respective successors and assigns whether so expressed or not.
SECTION 14.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or proceeding
by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 14.03. ADDRESSES FOR NOTICES. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders of Debt Securities on the Company may be given or
served by being deposited postage prepaid by first class mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to, McDonald's Corporation, Attention: Treasurer, One McDonald's Plaza,
Oak Brook, IL 60521, with a copy to the Controller. Any notice, direction,
request or demand by any Holder of Debt Securities to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the Principal Office of the Trustee.
SECTION 14.04. GOVERNING LAW. THIS INDENTURE AND EACH DEBT SECURITY SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF ILLINOIS.
SECTION 14.05. LEGAL HOLIDAYS. In any case where the date of maturity of
interest, if any, on or principal of, or premium, if any, on the Debt Securities
or the date fixed for redemption or repayment of any Debt Security will be in
the City of New York, New York, a Saturday, a Sunday, a legal holiday or a day
on which banking institutions are authorized or required by law or executive
order to close or remain closed, then payment of such interest, if any, on or
principal of or premium, if any, on the Debt Securities need not be made on such
date but may be made on the next succeeding day not in such city, a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are authorized or
required by law or executive order to close or remain closed, with the same
force and effect as if made on the date of maturity or a date fixed for
redemption or repayment, and no interest shall accrue for the period from and
after such date.
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SECTION 14.06. TABLE OF CONTENTS AND HEADINGS. The table of contents and the
titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 14.07. EXECUTION IN COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 14.08. SEPARABILITY. In case any provision in this Indenture or in the
Debt Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 14.09. BENEFITS. Nothing in this Indenture or in the Debt Securities,
expressed or implied, shall give to any person, other than the parties hereto
and their successors hereunder, and the Holders of the Debt Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
ARTICLE FIFTEEN
SUBORDINATION
SECTION 15.01. SUBORDINATION IN RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS.
Anything in the Debt Securities or the Indenture to the contrary
notwithstanding, the indebtedness evidenced by the Debt Securities shall be
subordinate in right of payment, to the extent and in the manner hereinafter set
forth, to all Senior Indebtedness. As used herein, "subordinate" shall mean the
following: that (i) in the event of any insolvency or bankruptcy proceedings,
and any receivership, liquidation, reorganization or other similar proceedings
in connection therewith, relative to the Company or its creditors or its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy proceedings, then all principal, premium, if any, and
interest on all Senior Indebtedness shall first be paid in full, or such payment
be provided for, before any payment on account of principal, premium, if any, or
interest, if any, is made by the Company upon the indebtedness evidenced by the
Debt Securities, and in any such proceedings any payment or distribution of
assets of the Company of any kind or character, whether in cash or property or
securities, which may be payable or deliverable in respect of the Debt
Securities (except for the provisions of this Article Fifteen) shall be paid or
delivered directly to the holders of such Senior Indebtedness, or their
representative or representatives or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, pro rata, as their respective interests may
appear, for application in payment thereof, unless and until such Senior
Indebtedness shall have been paid and satisfied in full (after giving effect to
any concurrent payment or distributions, or provisions therefor, to the holders
of such Senior Indebtedness) or such payment and satisfaction shall have been
provided for; provided, however, that in the event that payment or delivery of
such cash, property or securities to the Holders of the Debt Securities is
authorized by an order or decree made by a court of competent jurisdiction in a
reorganization proceeding under any applicable law and giving effect to the
provisions hereinbefore set forth for the subordination of the Debt Securities
to the Senior Indebtedness, no payment or delivery of such cash, property or
securities shall be made to the holders of Senior Indebtedness; provided,
further, that no such delivery shall be made to the holders of Senior
Indebtedness of securities which are issued by the Company, as reorganized, or
by the corporation succeeding to the Company or acquiring its property and
assets, pursuant to a plan of reorganization or upon the dissolution or
liquidation of the Company, and which are subordinate to the payment of all
Senior Indebtedness (or securities substituted therefor) then outstanding; and
provided, further, that the provisions of this clause (i) shall not apply to a
liquidation, dissolution, or other winding up made in connection with a merger,
consolidation, sale, lease, transfer or other disposal not prohibited by Section
11.01 of this Indenture and (ii) in the event that pursuant to Article Six of
this Indenture any Debt Security of any series is declared due and payable
because of the occurrence of an Event of Default (under circumstances when the
provisions
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<PAGE>
of the foregoing clause (i) shall not be applicable), the Holders of the Debt
Securities of such series shall be entitled to payment from the Company only
after there shall have been payment in full on the Senior Indebtedness
outstanding at the time such Debt Security so becomes due and payable because of
such Event of Default, or such payment shall have been provided for.
In the event that, notwithstanding the provisions of this Article Fifteen, the
Trustee or any Holders of Debt Securities shall receive any payment or
distribution on the Debt Securities that because of this Article Fifteen should
not have been made to them, then such payment shall be held in trust for the
benefit of, and shall be paid over and delivered to, the holders of the Senior
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
such Senior Indebtedness may have been issued, pro rata as their respective
interests may appear, for application to the pro rata payment of all Senior
Indebtedness remaining unpaid until all such Senior Indebtedness shall have been
paid in full, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness.
No present or future holder of Senior Indebtedness shall be prejudiced in his
right to enforce the subordination of the Debt Securities by any act or failure
to act on the part of the Company. Each Holder of Debt Securities by his
acceptance thereof authorizes the Trustee in his behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article Fifteen and appoints the Trustee his attorney-in-fact for any and
all such purposes.
Nothing in this Section 15.01 shall apply to claims of, or payments to, the
Trustee under or pursuant to the provisions of Section 7.05.
SECTION 15.02. TRUSTEE MAY RELY ON CERTIFICATE OF LIQUIDATING AGENT. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding up, liquidation or reorganization of the Company within the meaning of
this Article Fifteen, and shall also give prompt written notice to the Trustee
of any event which pursuant to Section 15.01 would prevent payment by the
Company on account of the principal of or premium, if any, or interest on the
Debt Securities. Upon any payment or distribution of assets of the Company
referred to in this Article Fifteen, the Trustee, subject to the requirements of
Section 315 of the Trust Indenture Act of 1939, shall be entitled to rely upon a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the Holders of Debt Securities, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Fifteen.
SECTION 15.03. COMPANY OBLIGATION TO PAY UNCONDITIONAL. The provisions of this
Article Fifteen are solely for the purpose of defining the relative rights of
the holders of Senior Indebtedness on the one hand, and the Holders of the Debt
Securities on the other hand, and nothing contained in this Article Fifteen or
elsewhere in this Indenture, or in the Debt Securities, shall impair, as between
the Company and the Holder of any Debt Security, the obligation of the Company,
which is unconditional and absolute, to pay to the Holder thereof the principal
of, premium, if any, and interest on the Debt Securities in accordance with
their terms and the terms of this Indenture, nor shall anything herein or
therein prevent the Trustee or the Holder of any Debt Security from exercising
all remedies otherwise permitted by applicable law or hereunder or thereunder
upon the occurrence of an Event of Default, subject to the rights, if any, under
this Article Fifteen of holders of Senior Indebtedness to receive cash, property
or securities of the Company otherwise payable or deliverable to the Holders of
the Debt Securities.
SECTION 15.04. NOTICE TO TRUSTEE OF EFFECTUATION OF SUBORDINATION.
Notwithstanding any of the provisions of this Article Fifteen or any other
provision of this Indenture, neither the Trustee nor any paying agent (if the
Company is not acting as its own paying agent) shall 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 the Trustee or any such paying agent, unless and
until the Trustee or such paying agent, as the case may be, shall have
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<PAGE>
received written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any trustee therefor or representative thereof; and,
prior to the receipt of any such written notice, any paying agent and the
Trustee, subject to the requirements of Section 315 of the Trust Indenture Act
of 1939, shall be entitled in all respects to assume that no such facts exist;
provided, however, that, if three business days prior to the date upon which by
the terms hereof any such moneys may become payable for any purpose including,
without limitation, the payment of the principal of or premium, if any, or
interest on any Debt Security, the Trustee or any paying agent, as the case may
be, shall not have received with respect to such moneys the notice provided for
in this Section 15.04, then, anything herein contained to the contrary
notwithstanding, the Trustee or such paying agent shall have full power and
authority to receive such moneys and to apply the same to the purpose for which
they are received, and shall not be affected by any notice to the contrary,
which may be received by it on or after such date.
The Trustee shall not have any fiduciary duty to any holder of Senior
Indebtedness, and shall not be liable to any such holder if it shall pay over or
distribute to the Holders of Debt Securities or the Company or any other person,
money or assets to which any holder of Senior Indebtedness shall be entitled
pursuant to this Article Fifteen or otherwise.
The Trustee shall, subject to the provisions of Section 7.01 and Section 315
of the Trust Indenture Act of 1939, be entitled to rely on the delivery to it of
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) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee or representative on behalf of such holder. In the event that 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 the provisions of this Article Fifteen,
the Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held or
represented by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person pursuant to the provisions of this Article Fifteen, 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 15.05. SENIOR INDEBTEDNESS HELD BY TRUSTEE. The Trustee shall be
entitled to all the rights set forth in this Article Fifteen in respect of any
Senior Indebtedness which may be at any time held by it to the same extent as
any other holder of Senior Indebtedness and, subject to the requirements of
Section 311 of the Trust Indenture Act of 1939, nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
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<PAGE>
In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of October 18, 1996.
MCDONALD'S CORPORATION
By /s/Carleton D. Pearl
__________________________________
Title: Senior Vice President
and Treasurer
[Corporate Seal]
Attest:
By /s/Gloria Santona
__________________________________
Title: Secretary
FIRST UNION NATIONAL BANK
By /s/John Clapham
__________________________________
Title: Vice President
[Corporate Seal]
Attest:
By /s/Terry McPoyle
__________________________________
Title: Assistant Vice President
36
<PAGE>
State of Illinois )ss:
County of DuPage )
On this 18th day of October, 1996, before me personally came Carleton D.
Pearl, to me personally known, who, being by me duly sworn, did depose and say
that he is Senior Vice President and Treasurer of McDonald's Corporation, one of
the corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
/s/ Leona J. Oostman
-------------------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
Commonwealth of Pennsylvania )ss:
County of Philadelphia )
On this 18th day of October, 1996, before me personally came John H. Clapham,
to me personally known, who, being by me duly sworn, did depose and say that he
is Vice President of First Union National Bank, one of the entities described in
and which executed the above instrument; that he knows the corporate seal of
said national banking association; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said national banking association, and that he signed his name
thereto by like authority.
/s/ Aida B. Dales
-------------------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
EXHIBIT A
[FORM OF SUBORDINATED NOTE]
MCDONALD'S CORPORATION
[ADD APPLICABLE LEGENDS]
SUBORDINATED NOTE DUE
NO.............. [SPECIFY AMOUNT AND CURRENCY]
McDONALD'S CORPORATION, a corporation organized and existing under the laws
of the State of Delaware (hereinafter called the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to the Person in whose name this Note is
registered or registered assigns, the principal sum of [SPECIFY AMOUNT AND
CURRENCY] on and to pay interest thereon from or from the
most recent interest payment date to which interest has been paid or duly
provided for, [semi-annually] on [and ], in each year, [at
the rate of % per annum] or [a rate determined by (specify method) until the
principal hereof is paid or such payment is duly provided for. The interest so
payable and punctually paid or duly provided for, on any interest payment date
will, as provided in said Indenture, be paid to the Person in whose name this
Note is registered at the close of business on the record date for such
interest, which shall be the day, whether or not a business day, of
the calendar month next preceding an interest payment date. Payment of the
principal of (and premium, if any, on) and interest on this Note will be made
at the designated office or agency of the Company maintained for such purpose
in , in [SPECIFY CURRENCY] or, at the option of the Company interest so
payable may be paid by check to the order of said Holder mailed to his address
appearing on the Debt Security register. Any interest not so punctually paid or
duly provided for shall be payable as provided in the Indenture.
Reference is hereby made to the further provisions of this Note set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth in this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof (or by an Authenticating Agent, as
provided in the Indenture) by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, McDonald's Corporation has caused this Instrument to be
signed in its corporate name by its Chairman of the Board or its President or
one of its Vice Presidents manually or in facsimile and a facsimile of its
corporate seal to be imprinted hereon and attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries.
Dated: McDonald's Corporation
By __________________________________
Attest:
- -------------------------------------
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein provided
for in the within-mentioned Indenture.
By __________________________________
Authorized Representative
[FORM OF REVERSE OF SUBORDINATED NOTE]
This Note is one of a duly authorized issue of debentures, notes or other
evidences of indebtedness of the Company (herein called "Debt Securities") of a
series hereinafter specified, all issued and to be issued under an Indenture
dated as of , 1996 (herein called the "Indenture"), between the Company
and First Union National Bank, as Trustee (herein called the "Trustee", which
term includes any successor Trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Company, the Trustee and
the Holders of the Debt Securities and the terms upon which the Debt Securities
are, and are to be, authenticated and delivered. The Debt Securities may be
issued in one or more series, which different series may be issued in various
currencies, various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
sinking, purchase or analogous funds (if any), may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This Note is one of a series of the Company designated as its
Subordinated Notes due (herein called the "Notes"), limited in aggregate
principal amount to [SPECIFY AMOUNT AND CURRENCY].
[The Notes may be redeemed, at the option of the Company, as a whole or from
time to time in part, on any date on or after and prior to maturity,
upon mailing a notice of such redemption not less than 30 nor more than 60 days
prior to the date fixed for redemption to the Holders of Notes to be redeemed,
as provided in the Indenture, at % of the principal amount together with
accrued interest to the date fixed for redemption.]
[In the event of redemption of this Note in part only, a new Note or Notes
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.]
If an Event of Default shall occur with respect to the Notes, the principal
of the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
The indebtedness evidenced by this Note is, to the extent and the manner
provided in the Indenture, subordinate in right of payment to the prior payment
in full of all Senior Indebtedness of the Company. Each Holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions of the
Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 66 2/3% in aggregate principal
amount of each series of the Debt Securities at the time outstanding (as
defined in the Indenture) to be affected (each series voting as a class),
evidenced as in the Indenture provided, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in
any manner the rights of the Holders of the Debt Securities of all such series;
provided, however, that no such supplemental indenture shall, among other
things, (i) extend the fixed maturity of any Debt Security, or reduce the rate
or extend the time of payment of interest thereon, or reduce the principal
amount or premium if any, thereon or make the principal thereof, or premium, if
any, or interest, if any, thereon payable in any coin or currency other than
that hereinabove provided, without the consent of the Holder of each Debt
Security so affected or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon acceleration of maturity
thereof, or (ii) reduce the aforesaid percentage of Debt Securities the Holders
of which are required to consent to any such supplemental indenture, without
the
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<PAGE>
consent of the Holders of each Debt Security so affected. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Notes at the time Outstanding, as defined in the Indenture, on
behalf of the Holders of all the Notes, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note or upon any Note issued upon the transfer hereof
or in exchange therefor or in lieu hereof.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the time, place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable on the Debt Security register of the Company,
upon surrender of this Note for transfer at the office or agency as may be
designated or maintained by the Company for such purpose in , duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee, duly executed by the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes are issuable in denominations of [SPECIFY AMOUNT AND CURRENCY] and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, this Note is exchangeable for a like
aggregate principal amount of Notes of different authorized denominations, as
requested by the Holder surrendering the same.
No service charge will be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes
whether or not this Note be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest
or premium, if any, on this Note or for any claim based hereon or otherwise in
any manner in respect hereof, or in respect of the Indenture, against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being expressly waived
and released by the acceptance hereof and as part of the consideration for the
issue hereof.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
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EXHIBIT 4(b)
----------------------------------------------
SUPPLEMENTAL INDENTURE NO. 1
BETWEEN
MCDONALD'S CORPORATION
AND
FIRST UNION NATIONAL BANK
TRUSTEE
---------------------
DATED AS OF NOVEMBER 5, 1996
---------------------
SUPPLEMENTAL TO SUBORDINATED DEBT SECURITIES INDENTURE
DATED AS OF OCTOBER 18, 1996
----------------------------------------------
<PAGE>
MCDONALD'S CORPORATION
SUPPLEMENTAL INDENTURE NO. 1
DATED AS OF NOVEMBER 5, 1996
SERIES OF 7 1/2% SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE 2036
$200,000,000
Supplemental Indenture No. 1, dated as of November 5, 1996, between
McDONALD'S CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (hereinafter sometimes referred to as the "Company"), and
FIRST UNION NATIONAL BANK, a national banking association, authorized to accept
and execute trusts (hereinafter sometimes referred to as the "Trustee"),
W I T N E S S E T H :
WHEREAS, The Company and the Trustee have executed and delivered a
Subordinated Debt Securities Indenture dated as of October 18, 1996 (the
"Indenture").
WHEREAS, Section 10.01 of the Indenture provides for the Company, when
authorized by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to establish the form or terms of any series of
Debt Securities as permitted by Sections 2.01 and 2.02 of the Indenture.
WHEREAS, Sections 2.01 and 2.02 of the Indenture provide for Debt
Securities of any series to be established pursuant to an indenture supplemental
to the Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the series of
Debt Securities provided for herein, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of such series of Debt
Securities, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS.
SECTION 1.01. This Supplemental Indenture No. 1 constitutes an integral
part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture No. 1; and
2
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(3) The terms "hereof", "herein", "hereto", "hereunder" and "herewith"
refer to this Supplemental Indenture.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES.
SECTION 2.01. There shall be a series of Debt Securities designated the "7
1/2% Subordinated Deferrable Interest Debentures due 2036" (the "Debentures").
The Debentures shall be limited to $200,000,000 aggregate principal amount.
SECTION 2.02. The principal amount of the Debentures shall be payable on
September 30, 2036.
SECTION 2.03. The Debentures will be represented by a global security (the
"Global Security"). The Global Security will be executed by the Company,
authenticated by the Trustee and deposited with, or on behalf of, The Depository
Trust Company (the "Depositary") and registered in the name of a nominee of the
Depositary. Except under circumstances described below, the Debentures will not
be issuable in definitive form.
Ownership of beneficial interests in the Global Security will be limited to
persons that have accounts with the Depositary or its nominee ("participants")
or persons that may hold interests through participants. Ownership of a
beneficial interest in the Global Security will be shown on, and the transfer of
that beneficial interest will only be effected through, records maintained by
the Depositary or its nominee (with respect to interests of participants) and on
the records of participants (with respect to interests of persons other than
participants).
So long as the Depositary or its nominee is the registered owner of the
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or Holder of the Debentures represented by the Global
Security for all purposes under the Indenture. Except as provided below, owners
of beneficial interests in the Global Security will not be entitled to have
Debentures represented by the Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debentures in
definitive form and will not be considered the owners or Holders thereof under
the Indenture.
Principal and interest payments on Debentures represented by the Global
Security registered in the name of the Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Security.
If the Depositary notifies the Company that it is at any time unwilling or
unable to continue as Depositary or if at any time the Depositary shall no
longer be eligible to continue as Depositary, the Company shall appoint a
successor Depositary with respect to the Debentures. If a successor Depositary
for the Debentures is not appointed by the Company within 90 days from the date
the Company receives such notice or becomes aware of such ineligibility, the
Company will execute, and the Trustee will authenticate and deliver, Debentures
in definitive form in exchange for the entire Global Security. In addition, the
Company may at any time and
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<PAGE>
in its sole discretion determine not to have the Debentures represented by the
Global Security and, in such event, the Company will execute, and the Trustee
will authenticate and deliver, Debentures in definitive form in exchange for the
entire Global Security. In any such instance, an owner of a beneficial interest
in the Global Security will be entitled to physical delivery in definitive form
of Debentures represented by the Global Security equal in principal amount to
such beneficial interest and to have such Debentures registered in its name.
Debentures so issued in definitive form will be issued as registered Debentures
in denominations of $25 and integral multiples thereof, unless otherwise
specified by the Company.
Upon the exchange of a Global Security for individual Debentures, such
Global Security shall be cancelled by the Trustee. Individual Debentures issued
in exchange for a Global Security shall be registered in such names and in such
authorized denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Debentures to, or in
accordance with the instructions of the persons in whose name such Debentures
are so registered.
Unless and until it is exchanged in whole or in part for the individual
Debentures represented thereby, a Global Security representing all or a portion
of the Debentures may not be transferred except as a whole by the Depositary for
the Debentures to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any such nominee to a successor Depositary for the Debentures or a
nominee of such successor Depositary.
SECTION 2.04. The Debentures shall bear interest at the rate of 7 1/2% per
annum, payable quarterly, in arrears, on March 31, June 30, September 30 and
December 31 of each year (each, an "Interest Payment Date"), commencing December
31, 1996. The Debentures shall be dated the date of authentication and interest
shall be payable on the principal represented thereby from the later of November
5, 1996, or the most recent Interest Payment Date to which interest has been
paid or duly provided for. If any date on which interest is payable is not a
business day, the payment of interest due on such date may be made on the next
succeeding business day (and without any interest or other payment in respect of
such delay).
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Holder in whose name any Debenture is
registered in the Debt Security register at the close of business on the March
15, June 15, September 15 or December 15 (whether or not a business day) next
preceding such Interest Payment Date (each, a "Regular Record Date").
The Company shall have the right upon prior notice by public announcement
given in accordance with New York Stock Exchange rules or the rules of any other
applicable self-regulatory organization, at any time during the term of the
Debentures, prior to an Interest Payment Date, so long as the Company is not in
default in the payment of interest on the Debentures, to extend the interest
payment period for an Extension Period (as defined below). Except as provided in
the next succeeding sentence, no interest shall be due and payable during an
Extension Period, but on the Interest Payment Date occurring at the end of each
Extension
4
<PAGE>
Period the Company shall pay to the Holders of record on the Record Date for
such Interest Payment Date (regardless of who the Holders of record may have
been on other dates during the Extension Period) all interest then accrued but
unpaid on the Debentures, together with interest thereon, compounded quarterly,
at the rate of 7 1/2% per annum, to the extent permitted by law; provided that
during any such Extension Period, the Company shall not declare or pay any
dividend on, or repurchase, redeem or otherwise acquire any of its capital
stock. Prior to the termination of any Extension Period, the Company may (a) on
any Interest Payment Date pay all or any portion of the interest accrued on the
Debentures as provided herein to Holders of record on the Regular Record Date
for such Interest Payment Date or (b) from time to time further extend the
interest payment period as provided in the last sentence of this paragraph,
provided that any such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarterly interest
payment periods from the last date to which interest on the Debentures was paid
in full. If the Company shall elect to pay all of the interest accrued on the
Debentures on an Interest Payment Date during an Extension Period, such
Extension Period shall automatically terminate on such Interest Payment Date.
Upon the termination of any Extension Period and the payment of all amounts of
interest then due, the Company may commence a new Extension Period, subject to
the above requirements. The Company shall cause the Trustee to give notice to
the Holders in the manner provided in the Indenture, not less than five business
days prior to the earlier of (i) the March 15, June 15, September 15 or December
15 next preceding the applicable Interest Payment Date and (ii) the date on
which the Company or the Trustee is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization of the Regular
Record Date and the payment date for such related interest payment period, of
(x) the Company's election to initiate an Extension Period and the
duration thereof,
(y) the Company's election to extend any Extension Period beyond the
Interest Payment Date on which such Extension Period is then scheduled to
terminate, and the duration of such extension, and
(z) the Company's election to make a full or partial payment of
interest accrued on the Debentures of any Interest Payment Date during any
Extension Period and the amount of such payment.
The term "Extension Period" means the period from and including the
Interest Payment Date next following the date of any notice of extension of the
interest payment period on the Debentures given pursuant to the last sentence of
the preceding paragraph (or, in the case of any further extension of the
interest payment period pursuant to the third sentence of the preceding
paragraph before the payment in full of all accrued but unpaid interest on the
Debentures, the Interest Payment Date to which interest was paid in full) to but
excluding the Interest Payment Date to which payment of interest on the
Debentures is so extended, after giving affect to any further extensions of the
interest payment period on the Debentures pursuant to the third sentence of the
preceding paragraph; provided that no Extension Period shall exceed 20
consecutive quarterly interest payment periods from the last date to which
interest on the Debentures was paid in full; and provided, further, that any
Extension Period shall end on an Interest Payment Date. Notwithstanding the
foregoing, in no event shall any Extension Period exceed September 30, 2036.
5
<PAGE>
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Regular Record Date by virtue of 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) and Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Debentures are registered at the close of business on
a Special Record Date (as defined below) 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 Debenture 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 Section
provided. Thereupon the Trustee shall fix a Special Record Date ("Special Record
Date") for the payment of such Defaulted Interest which shall be not more than
15 nor less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefore to be mailed, first class postage prepaid, to each Holder of
Debentures at his address as it appears in the Debt Security register, not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an authorized newspaper in each Place of
Payment, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Debentures are registered 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 in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such payment shall be deemed
practicable by the Trustee.
The Company covenants and agrees that, if at any time it has failed to make
any payment of interest or principal on the Debentures when due (after giving
effect to any grace period for payment thereof as provided in Section 6.01 of
the Indenture), or the Company exercises its option to extend the interest
payment period as provided for above, the Company will not, until all Defaulted
Interest or accrued but unpaid interest, if the Company exercises its option to
extend the interest payment period on the Debentures and all principal, if any,
then due and payable on the Debentures shall have been paid in full, (a)
declare, set aside, or pay any dividend or distribution on any capital stock of
the Company (except for dividends or distributions in shares of
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<PAGE>
its capital stock or rights to acquire shares of its capital stock); or (b)
repurchase, redeem, or otherwise acquire any shares of its capital stock
(except: (i) by conversion into or exchange for shares of its capital stock; or
(ii) for a redemption, purchase or other acquisition of shares of its capital
stock made for the purpose of any employee incentive plan or benefit plan of the
Company or any of its affiliates).
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Supplemental Indenture No. 1 upon transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued but unpaid, and to accrue, which were carried by such other
Debenture.
SECTION 2.05. The Place of Payment for the Debentures shall be both the
City of New York, New York, and the City of Charlotte, North Carolina. The
Trustee shall be the paying agent for the Debentures.
SECTION 2.06. The Debentures may, at the option of the Company, be
redeemed in whole or from time to time in part, upon notice as provided in
Section 3.02 of the Indenture, at any time on or after December 31, 2001, or at
any time upon the occurrence of a Tax Event, at a redemption price equal to 100%
of the principal amount of the Debentures redeemed, together with accrued but
unpaid interest to the date of redemption.
"Tax Event" means that the Company shall have received an opinion of
independent tax counsel (a "Tax Opinion") to the effect that, as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after October 31, 1996), in either case on or
after October 31, 1996, there is more than an insubstantial risk that interest
payable on the Debentures would not be deductible, in whole or in part, by the
Company for United States federal income tax purposes.
SECTION 2.07. The Debentures may be issued in denominations of $25 and any
integral multiples thereof.
SECTION 2.08. The Debentures shall be in the form attached as Exhibit A
hereto.
ARTICLE THREE
MISCELLANEOUS.
SECTION 3.01. The recitals of fact herein and in the Debentures shall be
taken as statements of the Company and shall not be construed as made by the
Trustee.
SECTION 3.02. This Supplemental Indenture No. 1 shall be construed in
connection with and as a part of the Indenture.
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<PAGE>
SECTION 3.03. (a) If any provision of this Supplemental Indenture No. 1
limits, qualifies, or conflicts with another provision of the Indenture required
to be included in indentures qualified under the Trust Indenture Act of 1939 (as
in effect on the date of this Supplemental Indenture No. 1) by any of the
provisions of Sections 310 to 317, inclusive, of said Trust Indenture Act, such
required provisions shall control.
(b) In case any one or more of the provisions contained in this
Supplemental Indenture No. 1 or in the Debentures issued hereunder should be
invalid, illegal, or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected, impaired, prejudiced or disturbed thereby.
SECTION 3.04. Whenever in this Supplemental Indenture No. 1 either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Supplemental Indenture No. 1 contained by or on behalf of the Company or by
or on behalf of the Trustee shall bind and inure to the benefit of the
respective successors and assigns of such parties, whether so expressed or not.
SECTION 3.05. (a) This Supplemental Indenture No. 1 may be simultaneously
executed in several counterparts, and all said counterparts executed and
delivered, each as an original, shall constitute but one and the same
instrument.
(b) The descriptive headings of the several Articles of this Supplemental
Indenture No. 1 were formulated, used and inserted in this Supplemental
Indenture No. 1 for convenience only and shall not be deemed to affect the
meaning or construction of any of the provisions hereof.
8
<PAGE>
IN WITNESS WHEREOF, McDONALD'S CORPORATION has caused this Supplemental
Indenture No. 1 to be signed, acknowledged and delivered by its President,
Executive Vice President and Chief Financial Officer or Senior Vice President
and Treasurer and its corporate seal to be affixed hereunto and the same to be
attested by its Secretary or Assistant Secretary, and FIRST UNION NATIONAL BANK,
as Trustee, has caused this Supplemental Indenture No. 1 to be signed,
acknowledged and delivered by one of its Vice Presidents, and its seal to be
affixed hereunto and the same to be attested by one of its Authorized Officers,
all as of the day and year first written above.
MCDONALD'S CORPORATION
[CORPORATE SEAL]
By: /s/ Carleton D. Pearl
----------------------
Senior Vice President and Treasurer
Attest:
/s/ Gloria Santona
- -------------------
Secretary
FIRST UNION NATIONAL BANK, as Trustee
[CORPORATE SEAL]
By: /s/ John Clapham
----------------
Vice President
Attest:
/s/ Terry McPoyle
- -----------------
Authorized Officer
9
<PAGE>
STATE OF ILLINOIS
SS:
COUNTY OF DuPAGE
On the 5th day of November, in the year one thousand nine hundred ninety
six, before me appeared Carleton D. Pearl to me personally known, who being by
me duly sworn, did say that he resides at McDonald's Corporation, that he is
Senior Vice President and Treasurer of McDONALD'S CORPORATION, one of the
corporations described in and which executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that he signed his name thereto by like authority.
/s/ Mary Velazquez
------------------
Notary Public
COMMONWEALTH OF PENNSYLVANIA
SS:
COUNTY OF PHILADELPHIA
On the 4th day of November, in the year one thousand nine hundred ninety
six, before me appeared John Clapham to me personally known, who, being by me
duly sworn, did say that he resides at 1052 Signal Hill, Berwyn, PA, that he is
Vice President of FIRST UNION NATIONAL BANK, one of the corporations described
in and which executed the above instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal,
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Joann Fantini
-----------------
Notary Public
10
<PAGE>
EXHIBIT 4(C)
THIS DEBENTURE IS A REGISTERED GLOBAL DEBENTURE AND IS REGISTERED IN THE NAME OF
CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"). UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR DEBENTURES IN DEFINITIVE REGISTERED FORM, THIS
REGISTERED GLOBAL DEBENTURE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC, OR BY
DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
[LOGO OF MCDONALD'S]
REGISTERED MCDONALD'S CORPORATION REGISTERED
Number 7 1/2% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE 2036
- ---------------
RU
- ---------------
$200,000,000
SEE REVERSE FOR
CERTAIN DEFINITIONS CUSIP 580 135 804
McDonald's Corporation, a corporation organized and existing under the laws of
the State of Delaware (hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to CEDE & CO. or registered assigns, the
principal sum of TWO HUNDRED MILLION DOLLARS ($200,000,000) on September 30,
2036 and to pay interest thereon to the registered Holder hereof from November
5, 1996, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, quarterly in arrears on March 31, June 30,
September 30 and December 31 in each year, commencing December 31, 1996 at the
rate of 7 1/2% per annum until the principal hereof is paid or such payment is
duly provided for. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in said Indenture, be paid
to the Person in whose name this Debenture is registered at the close of
business on the Regular Record Date for such interest, which shall be the March
15, June 15, September 15 or December 15 (whether or not a business day) next
preceding an Interest Payment Date. Payment of the principal of and interest on
this Debenture will be made at the designated office or agency of the Company
maintained for such purpose in the City of New York, New York, and the City of
Charlotte, North Carolina, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts or, at the option of the Company, interest so payable may be paid
by check to the order of said Holder mailed to said Holder's address appearing
on the Debenture register or by wire transfer payable to an account specified by
said Holder. Any interest not so punctually paid or duly provided for shall be
payable as provided in the Indenture.
Reference is hereby made to the further provisions of this Debenture set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth in this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse hereof (or by an Authenticating Agent, as
provided in the Indenture) by manual signature, this Debenture shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
In Witness Whereof, McDonald's Corporation has caused this Instrument to be
signed in its corporate name by the Chairman of the Board or its President or
one of its Vice Presidents manually or in facsimile and a facsimile of its
corporate seal to be imprinted hereon and attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries.
Dated: November 5, 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated herein
provided for in the withinmentioned Indenture.
FIRST UNION NATIONAL BANK McDONALD'S CORPORATION
as Trustee
By: Attest: By:
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Authorized Officer Secretary Senior Vice President
and Treasurer
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MCDONALD'S CORPORATION
7 1/2% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE 2036
INDENTURE. This Debenture is one of a duly authorized issue of Debt
Securities of the Company designated as its 7 1/2% Subordinated Deferrable
Interest Debentures due 2036 (herein called the "Debentures"), limited in
aggregate principal amount to $200,000,000, issued and to be issued under a
Subordinated Debt Securities Indenture, dated as of October 18, 1996 (herein
called the "Indenture") between the Company and First Union National Bank, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Indebtedness and the Holders of the Debentures and of the
terms upon which the Debentures are, and are to be, authenticated and delivered.
The Debt Securities may be issued in one or more series, which different series
may be issued in various currencies, various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different sinking, purchase or analogous funds (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided.
INTEREST. The Company promises to pay interest on said principal sum from
November 5, 1996 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, quarterly in arrears on March 31, June 30,
September 30 and December 31 in each year commencing December 31, 1996 at the
rate of 7 1/2% per annum until maturity or earlier redemption. If any date on
which interest is payable on this Debenture is not a business day, the payment
of interest due on such date may be made on the next succeeding business day
(and without any interest or other payment in respect of such delay). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date (other than interest payable on redemption or maturity) will, as
provided in such Indenture, be paid to the Person in whose name this Debenture
(or one or more predecessor Debt Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the March
15, June 15, September 15 or December 15 (whether or not a business day), as the
case may be, next preceding such Interest Payment Date. Interest payable on
redemption or maturity will be payable to the Person to whom the principal is
paid. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Debenture (or one or more
predecessor Debt Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Debentures not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which Debentures may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture.
EXTENSION OF INTEREST PAYMENT PERIOD. Notwithstanding anything contained in
the Indenture to the contrary, the Company shall have the right upon prior
notice as provided in the last sentence of this paragraph at any time during the
term of the Debentures prior to an Interest Payment Date, so long as the Company
is not in default in the payment of interest on the Debentures, to extend the
interest payment period for an Extension Period (as defined below). Except as
provided in the next succeeding sentence, no interest shall be due and payable
during an Extension Period, but on the Interest Payment Date occurring at the
end of each Extension Period the Company shall pay to the Holders of record on
the Regular Record Date for such Interest Payment Date (regardless of who the
Holders of record may have been on other dates during the Extension Period) all
interest then accrued but unpaid on the Debentures, together with interest
thereon, compounded quarterly, at the rate of 7 1/2% per annum, to the extent
permitted by law; provided that during any such Extension Period, the Company
shall not declare or pay any dividend on, or repurchase, redeem or otherwise
acquire any of its capital stock. Prior to the termination of any Extension
Period, the Company may (a) on any Interest Payment Date pay all or any portion
of the interest accrued on the Debentures as provided on the face hereof to
Holders of record on the Regular Record Date for such Interest Payment Date or
(b) from time to time further extend the interest payment period as provided in
the last sentence of this paragraph, provided that any such Extension Period,
together with all such previous and further extensions thereof, may not exceed
20 consecutive quarterly interest payment periods from the last date to which
interest on the Debentures was paid in full. If the Company shall elect to pay
all of the interest accrued on the Debentures on an Interest Payment Date during
an Extension Period, such Extension Period shall automatically terminate on such
Interest Payment Date. Upon the termination of any Extension Period and the
payment of all amounts of interest then due, the Company may commence a new
Extension Period, subject to the above requirements. The Company shall cause the
Trustee to give notice to the Holders in the manner provided in the Indenture,
not less than five business days prior to the earlier of (i) the March 15, June
15, September 15 or December 15 next preceding the applicable Interest Payment
Date and (ii) the date on which the Company or the Trustee is required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization of the Regular Record Date and the payment date for such related
interest payment period, of
(x) the Company's election to initiate an Extension Period and the duration
thereof,
(y) the Company's election to extend any Extension Period beyond the
Interest Payment Date on which such Extension Period is then scheduled to
terminate, and the duration of such extension, and
(z) the Company's election to make a full or partial payment of interest
accrued on the Debentures of any Interest Payment Date during any Extension
Period and the amount of such payment.
The term "Extension Period" means the period from and including the Interest
Payment Date next following the date of any notice of extension of the interest
payment period on the Debentures given pursuant to the last sentence of the
preceding paragraph (or, in the case of any further extension of the interest
payment period pursuant to the third sentence of the preceding paragraph before
the payment in full of all accrued but unpaid interest on the Debentures, the
Interest Payment Date to which interest was paid in full) to but excluding the
Interest Payment Date to which payment of interest on the Debentures is so
extended, after giving affect to any further extensions of the interest payment
period on the Debentures pursuant to the third sentence of the preceding
paragraph; provided that no Extension Period shall exceed 20 consecutive
quarterly interest payment periods from the last date to which interest on the
Debentures was paid in full; and provided, further, that any Extension Period
shall end on an Interest Payment Date. Notwithstanding the foregoing, in no
event shall any Extension Period exceed September 30, 2036.
METHOD OF PAYMENT. Payment of the principal of and interest on this Debenture
will be made at the office or agency of the Company in the City of New York, New
York and Charlotte, North Carolina, or at any other office or agency maintained
by the Company for such purpose, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company, payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Debenture register or by wire
transfer payable to an account specified by such Person.
PAYING AGENT AND DEBT SECURITY REGISTRAR. Initially, the Trustee will act as
Debt Security registrar through its office as 123 South Broad Street,
Philadelphia, Pennsylvania 19109, and the Company has appointed the Trustee to
act as Paying Agent through its office or agency in New York, New York, and
Charlotte, North Carolina.
REDEMPTION. The Debentures may be redeemed, at the option of the Company, in
whole or in part (in denominations of $25 or integral multiples thereof), on any
date on or after December 31, 2001, or at any time upon the occurrence of a Tax
Event, upon not less than 30 nor more than 60 days' notice mailed to the
registered Holder thereof at a Redemption Price of 100% of the principal amount,
together with accrued but unpaid interest to the Redemption Date; provided,
however, that installments of interest whose Interest Payment Date is on or
prior to the Redemption Date will be payable to the Holders of such Debentures
of record at the close of business on the relevant Regular Record Dates referred
to on the face hereof, all as provided in the Indenture.
The term "Tax Event" means that the Company shall have received an opinion of
independent tax counsel (a "Tax Opinion") to the effect that, as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after October 31, 1996), in either case after
October 31, 1996, there is more than an insubstantial risk that interest payable
on the Debentures would not be deductible, in whole or in part, by the Company
for United States federal income tax purposes.
In the event of redemption of this Debenture in part only, a new Debenture or
Debentures for the unredeemed portion thereof will be issued in the name of the
Holder thereof upon the cancellation hereof.
SUBORDINATION. The Company and each Holder, by acceptance hereof, agree that
the payment of the principal of and interest on the Debentures is subordinated,
to the extent and in the manner provided in the Indenture, to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, authorizes and expressly directs the Trustee on his
behalf to take such action as may be necessary or appropriate in the discretion
of the Trustee to effectuate the subordination so provided and appoints the
Trustee his attorney-in-fact for such purpose.
INDEBTEDNESS. The Company and, by its acceptance of this Debenture or a
beneficial interest herein, the Holder of, and any Person that acquires a
beneficial interest in, this Debenture agree that for United States federal,
state and local tax purposes it is intended that this Debenture constitute
indebtedness.
DEFAULTS AND REMEDIES. If an Event of Default shall occur and be continuing,
the principal of all the Debentures may be declared due and payable in the
manner and with the effect provided in the Indenture.
AMENDMENTS AND WAIVERS. The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the Holders of not less than 66-
2/3% in aggregate principal amount of each series of Debt Securities at the time
outstanding (as defined in the Indenture) to be affected (each series voting as
a class), evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the Holders of the Debt Securities of all such
series; provided, however, that no such supplemental indenture shall, among
other things, (i) extend the fixed maturity of any Debt Security, or reduce the
rate or extend the time of payment of interest thereon, or reduce the principal
amount or premium, if any, thereon or make the principal thereof, or premium, if
any, or interest, if any, thereon payable in any coin or currency other than
that hereinabove provided, without the consent of the Holder of each Debt
Security so affected or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon acceleration of maturity
thereof, or (ii) reduce the aforesaid percentage of Debt Securities the Holders
of which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Debt Security so affected. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Debentures at the time Outstanding, as defined in the Indenture,
on behalf of the Holders of all the Debentures, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Debenture shall be conclusive and binding upon such Holder and upon all
future Holders of this Debenture and of any Debenture issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Debenture or upon any Debenture issued upon
the transfer hereof or in exchange therefor or in lieu hereof.
OBLIGATION ABSOLUTE. No reference herein to the Indenture and no provision of
this Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
DENOMINATIONS. The Debentures are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth,
Debentures are exchangeable for a like aggregate principal amount of Debentures
of a different authorized denomination, as requested by the Holder surrendering
the same and upon surrender of the Debenture for registration of transfer at the
office or agency of the Company in New York, New York, or Charlotte, North
Carolina, the Company will execute, and the Trustee will authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Debentures, of authorized denominations and of a like aggregate principal
amount and tenor. Every Debenture surrendered for registration of transfer or
exchange will, if required by the Company, the Debt Security registrar or the
Trustee, be duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company, the Debt Security registrar and the Trustee
duly executed by, the Holder hereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
PERSONS DEEMED OWNERS. Prior to due presentment of this Debenture for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Debenture is registered
in the Debt Security register as the owner hereof for all purposes, whether or
not this Debenture is overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
NO RECOURSE AGAINST OTHERS. No recourse for the payment of the principal of
or interest on this Debenture, or for any claim based hereon or on the Indenture
and no recourse under or upon any obligation, covenant or agreement of the
Company in the Indenture or any indenture supplemental thereto or in any
Debenture, or because of the creation of any indebtedness represented hereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
GOVERNING LAW. This Debenture will be governed by and construed and enforced
in accordance with, the internal laws of the State of Illinois.
TERMS. All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The following abbreviations, when used in the inscription on the face of
this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ___________ Custodian _________________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship under Uniform Gifts to Minors
and not as tenants in common Act _________________________
(State)
Additional abbreviations may also be used though not in the above list.
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</TABLE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
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the within Instrument of McDONALD'S CORPORATION and hereby does irrevocably
constitute and appoint
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to transfer the said Instrument on the books of the within-named Company, with
full power of substitution in the premises.
Dated:
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NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Instrument in every particular,
without alteration or enlargement or any change whatever.
<PAGE>
EXHIBIT 8
October 31, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Paine Webber Incorporated
Prudential Securities Incorporated
Salomon Brothers Inc
Smith Barney Inc.
As Representatives of the Several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, NY 10281
Re: McDonald's Corporation
7 1/2% Subordinated Deferrable Interest Debentures Due 2036
Ladies and Gentlemen:
You have requested my opinion relating to certain material United States federal
income tax considerations relevant to certain persons who purchase McDonald's
Corporation 7 1/2% Subordinated Deferrable Interest Debentures Due 2036 (the
"Debentures") upon their original issuance and who hold such Debentures as
capital assets (an "Original Holder").
Based upon the representations of the McDonald's Corporation financial
management, certain facts set forth in the Prospectus Supplement dated October
31, 1996 (the "Prospectus Supplement"), the contents of other documents related
to the issuance of the Debentures and subject to the foregoing, the statements
set forth in the Prospectus Supplement under the heading "Certain United States
Federal Income Tax Considerations," insofar as they relate to matters of law or
legal conclusions with respect to the Federal law of the United States,
accurately reflect, constitute and are consistent with my legal opinion with
respect to the material United States federal income tax considerations
applicable to an Original Holder and as such are correct in all material
respects and are a fair and accurate summary of the material United States
federal income tax considerations concerning an investment by an Original Holder
in the Debentures.
<PAGE>
My opinion is based on the Internal Revenue Code of 1986, as amended, Treasury
regulations thereunder and administrative and judicial interpretations thereof,
all as in effect on the date of this opinion, and all of which are subject to
change, possibly on a retroactive basis, or different interpretations. It does
not discuss all of the United States federal income tax considerations that may
be relevant to each Original Holder in light of such holder's particular facts
and circumstances and such opinion is not intended to be applicable in all
respects to all categories of investors. In particular, my opinion does not
address special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, persons that have a
functional currency other than the U.S. Dollar or persons who hold the
Debentures as part of an integrated transaction (including a "straddle")
consisting of the Debentures and one or more other positions or as other than a
capital asset. In addition, my opinion does not address any state, local or
foreign tax consequences to an Original Holder. As indicated in the Prospectus
Supplement, all holders of the Debentures should consult their own tax advisors
concerning the United States federal, state, local and foreign tax consequences
of the purchase, ownership and disposition of the Debentures in light of their
own particular circumstances.
I am furnishing this opinion to you solely for the purpose of providing an
opinion that may be used, circulated, quoted or otherwise referred to by you
only as part of the filing of the above-referenced Prospectus Supplement with
the United States Securities and Exchange Commission, and my opinion is not to
be relied upon or used for any other purpose without my prior written consent. I
am aware that I am named in the Prospectus Supplement as Federal Tax Counsel to
McDonald's Corporation and hereby consent to such use of my name and the filing
of this opinion with the Securities and Exchange Commission. By giving such
consent, I do not admit that I am an "expert" within the meaning of the
Securities Act of 1933 or the rules and regulations of the Commission issued
thereunder with respect to any part of the Prospectus Supplement.
This opinion is rendered on the date hereof and I have no continuing obligation
hereunder to inform you of any changes of law subsequent to the date hereof.
Very truly yours,
/s/ Paul J. Schaffhausen
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Paul J. Schaffhausen
Assistant Vice President, Federal Tax Counsel
McDonald's Corporation
