<PAGE>
As filed with the Securities and Exchange Commission on July 22, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
NATIONAL SERVICE INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 58-0364900
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1420 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309-3002
(404) 853-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
KENYON W. MURPHY
VICE PRESIDENT AND ASSOCIATE COUNSEL
1420 PEACHTREE STREET, N.E.
ATLANTA, GA 30309-3002
(404) 853-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
JEFFREY M. STEIN JOHN W. WHITE
KING & SPALDING CRAVATH, SWAINE & MOORE
191 PEACHTREE STREET WORLDWIDE PLAZA, 825 EIGHTH AVENUE
ATLANTA, GEORGIA 30303-1763 NEW YORK, NEW YORK 10019
(404) 572-4600 (212) 474-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED UNIT PRICE(1)(2) REGISTRATION FEE
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<S> <C> <C> <C>
Debt Securities(3)......
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Common Stock(3).........
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Preferred Stock(3)......
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Warrants(3).............
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Total................... $400,000,000 $118,000(4)
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</TABLE>
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(1) In no event will the aggregate maximum offering price of all securities
registered under this Registration Statement exceed $400,000,000. Such
amount includes any consideration to be received for Securities issued
upon exercise of the Warrants. Any securities registered hereunder may be
sold separately or as units with other securities registered hereunder.
(2) The proposed maximum offering price per unit (a) has been omitted pursuant
to Instruction II.D. of Form S-3 and (b) will be determined, from time to
time, by the Registrant in connection with the issuance by the Registrant
of the securities registered hereunder.
(3) Subject to footnote (1), there is being registered hereunder an
indeterminate number of shares of Common Stock, Preferred Stock, Warrants
and Debt Securities as may be sold, from time to time, by National Service
Industries, Inc. National Service Industries, Inc. also is registering
hereunder an indeterminate number of shares of Common Stock, Preferred
Stock and Debt Securities as may be issued upon conversion or exchange of
any Debt Securities or Preferred Stock or upon exercise of the Warrants
registered hereby. If any Debt Securities are being issued at an original
issue discount, then the offering price shall be in such greater principal
amount as shall result in an aggregate initial offering price not to
exceed $400,000,000, less the dollar amount of any securities previously
issued hereunder. In no event will the aggregate initial offering price of
all securities issued from time to time pursuant to this Registration
Statement exceed $400,000,000, or its equivalent if some or all of the
securities are denominated in one or more foreign currencies.
(4) Fee calculated pursuant to Rule 457(o) under the Securities Act.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED 22, 1998
PROSPECTUS
NATIONAL SERVICE INDUSTRIES, INC.
[LOGO] DEBT SECURITIES
PREFERRED STOCK
WARRANTS
COMMON STOCK
National Service Industries, Inc. (the "Company") may offer from time to
time: (i) its unsecured debt securities ("Debt Securities") consisting of
debentures, notes and/or other evidences of unsecured indebtedness in one or
more series, which may be either senior ("Senior Securities") or subordinated
("Subordinated Securities") and which may be convertible into or exchangeable
for shares of its common stock, par value $1.00 per share ("Common Stock"),
shares of its preferred stock, no par value ("Preferred Stock"), or other Debt
Securities, (ii) Preferred Stock, which may be convertible into or exchangeable
for shares of Common Stock or shares of Preferred Stock or Debt Securities;
(iii) warrants to purchase shares of Preferred Stock (the "Preferred Stock
Warrants") or Debt Securities (the "Debt Warrants"); and (iv) Common Stock
issuable upon the conversion or exchange of Debt Securities or Preferred Stock
offered hereunder, to the extent such Debt Securities or Preferred Stock are,
by their terms, convertible into or exchangeable for shares of Common Stock, in
amounts, at prices and on terms to be determined by market conditions at the
time of offering. The Debt Warrants and Preferred Stock Warrants are
collectively referred to herein as the "Warrants" and the Debt Securities,
Preferred Stock, Common Stock and Warrants are collectively referred to herein
as the "Securities."
The Securities may be issued in one or more series or issuances and will be
limited to $400,000,000 in aggregate public offering price (or its equivalent,
based on the applicable exchange rate, to the extent Debt Securities are issued
for one or more foreign currencies or currency units).
Specific terms of the particular Securities in respect of which this
Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the
terms of the offering of the Securities and the initial price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Securities, without limitation, the
following: (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking as Senior Securities or Subordinated
Securities, authorized denomination, maturity, rate or method of calculation of
interest and dates for payment thereof, any exchangeability, conversion,
redemption, prepayment or sinking fund provisions, the currency or currencies
or currency unit or currency units in which principal, premium, if any, or
interest, if any, is payable, any modifications of or additions to the
covenants described in this Prospectus and any other specific terms thereof;
(ii) in the case of Preferred Stock, the designation, number of shares,
liquidation preference per share, initial public offering price, dividend rate
(or method of calculation thereof), dates on which dividends will be payable
and dates from which dividends will accrue, any redemption or sinking fund
provisions, any conversion or exchange rights, and any other relative rights;
and (iii) in the case of Warrants, the number and terms thereof, the
designation and the number of Securities issuable upon their exercise, the
exercise price, the terms of the offering and sale thereof and, where
applicable, the duration and detachability thereof.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
<PAGE>
The Company's obligations under the Debt Securities will not be guaranteed
by any of its subsidiaries. The Securities may be sold for U.S. dollars, or
any foreign currency or currencies or currency units, and the principal of,
any premium on, and any interest on, the Debt Securities may be payable in
U.S. dollars, or any foreign currency or currencies or currency units. The
amounts payable by the Company in respect of Debt Securities may be calculated
by reference to the value, rate or price of one or more specified commodities,
currencies or indices to the extent set forth in the Prospectus Supplement.
The Prospectus Supplement will also contain information, where applicable,
about certain United States federal income tax considerations relating to the
Securities covered by the Prospectus Supplement.
The outstanding Common Stock is listed on the New York Stock Exchange under
the symbol "NSI." The applicable Prospectus Supplement will contain
information about any listing of the other Securities on a securities
exchange.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------
The Company may sell the Securities directly, through agents designated from
time to time or through underwriters or dealers. If any agents of the Company
or any underwriters or dealers are involved in the sale of the Securities, the
names of such agents, underwriters or dealers, any applicable commissions and
discounts, and the net proceeds to the Company will be set forth in the
applicable Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for agents, underwriters and dealers.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
The date of this Prospectus is , 1998
2
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IN
CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT, AND, IF GIVEN OR MADE, ANY SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE.
----------------
AVAILABLE INFORMATION
National Service Industries, Inc. is subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), and
in accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
certain of the Commission's Regional Offices located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission maintains
a Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Commission. The address of the Commission's Web site is http://www.sec.gov.
Copies of such materials can be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, at prescribed rates. In addition, the Company's Common
Stock is listed on the New York Stock Exchange. The Company's reports, proxy
statements and other information filed under the Exchange Act may also be
inspected and copied at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act"). This Prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement and to the exhibits and
schedules filed therewith. All of these documents may be inspected without
charge at the Commission's principal office in Washington, D.C., and copies
thereof may be obtained from the Commission at the prescribed rates or may be
examined without charge at the public reference facilities of the Commission.
3
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-3208) pursuant to the Exchange Act are incorporated herein by reference: the
Company's Annual Report on Form 10-K for the year ended August 31, 1997; its
Quarterly Reports on Form 10-Q for the quarters ended November 30, 1997,
February 28, 1998 and May 31, 1998; and the description of capital stock
(including Common Stock) of the Company that is contained in the registration
statement filed under the Exchange Act under File No. 1-3208, including all
amendments or reports filed for the purpose of updating such description.
All other documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
all or a portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified shall not be deemed to constitute a part of this Prospectus except as
so modified, and any statement so superseded shall not be deemed to constitute
part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all documents
which are incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference
into such documents). Requests should be directed to the Company at its
principal executive offices at 1420 Peachtree Street, N.E., Atlanta, Georgia
30309-3002, Attention: Corporate Secretary, telephone (404) 853-1000.
4
<PAGE>
THE COMPANY
National Service Industries, Inc. (the "Company") is a diversified service
and manufacturing company that, through its subsidiaries, operates in four
business segments--lighting equipment, textile rental, chemicals and
envelopes. Lithonia Lighting is a manufacturer of lighting fixtures, serving
the commercial, industrial, institutional and residential markets. The
Company's chemical segment serves both the institutional and industrial and
retail markets in North America and Western Europe with products including
cleaners, sanitizers, polishes, degreasers, pesticides, insecticides,
herbicides and water treatments. National Linen Service is a multi-service
textile rental supplier, serving the hospitality, healthcare, industrial,
commercial and institutional markets. Atlantic Envelope is a leading producer
of custom envelopes and office products, serving primarily the southeastern
United States. For the fiscal year ended August 31, 1997, the Company had
total revenues of $2.0 billion and net income of $107.3 million.
As used herein, the "Company" means National Service Industries, Inc. and
its subsidiaries unless the context requires otherwise. The address and
telephone number of the Company's principal executive offices are 1420
Peachtree Street, N.E., Atlanta, Georgia 30309-3002, (404) 853-1000.
USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, which may include working capital increases,
capital expenditures, acquisitions, repayment of outstanding indebtedness and
repurchases of Company Common Stock. Any specific allocations of the proceeds
to a particular purpose that have been made at the date of any Prospectus
Supplement will be described therein.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges was as follows for the
years and periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
FISCAL YEARS ENDED AUGUST 31, MAY 31,
----------------------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997 1997 1998
---- ----- ----- ----- ----- ----- -----
13.51 16.51 19.13 19.95 19.09 16.82 16.34
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of pretax income plus fixed charges (excluding interest capitalized
during the period). Fixed charges consist of interest expense, amortization of
financing costs and the portion of rent expense which is deemed to be
representative of the interest component of rent expense.
RISK FACTORS RELATING TO CURRENCIES
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets. These risks will
vary depending upon the currency or currencies involved and will be more fully
described in a Prospectus Supplement relating thereto.
HOLDING COMPANY STRUCTURE
The Company is a holding company and its assets consist primarily of
investments in its subsidiaries. The Company's rights and the rights of its
creditors, including holders of Debt Securities, to participate in the
5
<PAGE>
distribution of assets of any subsidiary upon the liquidation or
reorganization of the subsidiary will be subject to prior claims of the
creditors of the subsidiary, including trade creditors, except to the extent
that the Company may itself be a creditor with recognized claims against such
subsidiary (in which case the claims of the company would still be subject to
the prior claims of any secured creditor of such subsidiary and of any holder
of indebtedness of such subsidiary that is Senior to that held by the
Company). In addition, the Company's current Credit Agreement, dated July 23,
1996, among the Company, Wachovia Bank of Georgia, N.A., and other banks (the
"Credit Agreement") provides that certain subsidiaries of the Company may
borrow directly under the Credit Agreement up to $250.0 million and the
Company guarantees any borrowings of such subsidiaries under the Credit
Agreement. As of June 30, 1998, the Company's subsidiaries had approximately
$65 million of borrowings outstanding under the Credit Agreement, and these
subsidiaries may borrow additional amounts under the Credit Agreement from
time to time. The holder of Debt Securities may be deemed to be effectively
subordinated to such claims. See "--General," "--Provisions Applicable to Both
Senior and Subordinated Debt Securities" and "--Provisions Applicable Solely
to Senior Debt Securities."
DESCRIPTION OF THE DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities and the extent to
which such general provisions may apply will be described in a Prospectus
Supplement relating to such Debt Securities.
The Debt Securities will be general unsecured obligations of the Company and
will constitute either senior debt securities or subordinated debt securities.
In the case of Debt Securities that will be senior debt securities ("Senior
Debt Securities"), the Debt Securities will be issued under an Indenture (the
"Senior Indenture") between the Company and SunTrust Bank, Atlanta, as trustee
under the Senior Indenture. In the case of Debt Securities that will be
subordinated debt securities ("Subordinated Debt Securities"), the Debt
Securities will be issued under an Indenture (the "Subordinated Indenture") to
be entered into between the Company and SunTrust Bank, Atlanta, as trustee
under the Subordinated Indenture. The Senior Indenture and the Subordinated
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures." Copies of the form of the Senior
Indenture and the form of the Subordinated Indenture have been filed as
exhibits to the Registration Statement. SunTrust Bank, Atlanta, as trustee
under each of the Indentures (and any successor thereto under each Indenture),
is referred to herein as the "Trustee." The statements under this caption
relating to the Debt Securities and the Indentures are summaries only and do
not purport to be complete. Such summaries make use of terms defined in the
Indentures. Wherever such terms are used herein or particular provisions of an
Indenture are referred to, such terms or provisions, as the case may be, are
incorporated by reference as part of the statements made herein, and such
statements are qualified in their entirety by such reference. Certain defined
terms in the Indentures are capitalized herein. The italicized references
below apply to the article or section numbers in the Senior Indenture and
Subordinated Indenture, respectively, or to both Indentures if only one
reference is provided, unless otherwise indicated.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
The Indentures do not limit the aggregate principal amount of Debt
Securities that can be issued thereunder and provide that Debt Securities may
be issued from time to time thereunder in one or more series, each in an
aggregate principal amount authorized by the Company prior to issuance. The
Debt Securities may be issued at various times with different maturity dates
and different principal repayment provisions, may bear interest at different
rates, may be payable in currencies other than United States dollars, in
composite currencies or in amounts determined by reference to the price, rate
or value of one or more specified commodities, currencies or indices, and may
otherwise vary, all as provided in the Indentures. The Company has from time
to time entered into, and will in the future enter into, credit or other
financing agreements to fund its operations, herein referred to collectively
as the "Credit Facilities." Such credit or other financing agreements may be
secured by the assets of the Company, secured by the assets of subsidiaries of
the Company or guaranteed by subsidiaries of the
6
<PAGE>
Company. To the extent that the Credit Facilities are so secured or
guaranteed, the lenders under such Credit Facilities may have priority over
the holders of the Debt Securities with respect to the assets of the Company
or its subsidiaries that secure such Credit Facilities and may have priority
over the holders of the Debt Securities.
GENERAL
Unless otherwise indicated in a Prospectus Supplement, the Debt Securities
will not benefit from any covenant or other provision that would afford
holders of such Debt Securities special protection in the event of a
restructuring or highly leveraged transaction involving the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms of the particular series of Debt Securities offered hereby: (i) the
title and aggregate principal amount of the Debt Securities; (ii) whether such
Debt Securities will be issued in the form of one or more global securities;
(iii) the date or dates on which the Debt Securities will mature; (iv) the
rate or rates (which may be fixed or variable) per annum, if any, at which the
Debt Securities will bear interest or the method of determining such rate or
rates, and the date or dates from which such interest, if any, will accrue and
the date or dates at which such interest, if any, will be payable; (v) the
place or places where the principal of premium, if any, and any interest on
the Debt Securities shall be payable; (vi) the terms for redemption or early
payment, if any, including any mandatory or optional sinking fund or analogous
provision; (vii) if other than denominations of $1,000 or any integral
multiple thereof, the denominations in which Debt Securities of the series
shall be issuable; (viii) the currency, currencies (including composite
currencies), or current unit or units in which such Debt Securities will be
denominated and in which the principal of, and premium interest, if any, on
such Debt Securities will be payable; (ix) whether, and the terms and
conditions on which, the Company or a holder may elect that, or the other
circumstances under which, payment of principal of, or premium or interest, if
any on such Debt Securities is to be made in a currency or currencies or
currency unit or units other than that in which such Debt Securities are
denominated; (x) any index or formula to be used to determine the amount of
payments of principal of (and premium, if any) and interest on such Debt
Securities and any commodities, currencies, currency units or indices, or
value, rate or price, relevant to such determination; (xi) if other than the
principal amount thereof, the portion of the principal amount of Debt
Securities of the series that shall be payable upon declaration of
acceleration of the maturity thereof or provable in bankruptcy; (xii) any
additional means of satisfaction and discharge; (xiii) any deletions or
modifications of or additions to the Events of Default or covenant of the
Company; (xiv) the terms for conversion or exchange, if any, of the Debt
Securities; (xv) the terms, if any, upon which such Debt Securities may be
convertible into Common Stock, Preferred Stock, other Debt Securities or other
securities or property of the Company and the terms and conditions upon which
such conversion may be effected, including the initial conversion price or
rate and any other provision in addition to or in lieu of those described
herein; (xvi) information with respect to book-entry procedures; and (xvii)
any other specific terms of the Debt Securities. (Section 301)
The Company currently conducts substantially all of its operations through
subsidiaries, and the holders of Debt Securities will generally have a junior
position to any claims of creditors and any preferred stockholders of the
Company's subsidiaries. Claims of creditors of such subsidiaries, including
banks, trade creditors, secured creditors, taxing authorities and
beneficiaries of subsidiary guarantees, and claims of holders of any preferred
stock issued by such subsidiaries will generally have priority as to the
assets of such subsidiaries over the claims and equity interests of the
Company and, thereby, indirectly, the holders of indebtedness of the Company,
including the Debt Securities. In addition, the Credit Agreement provides that
certain subsidiaries of the Company may borrow directly under the Credit
Agreement up to $250.0 million and the Company guarantees any borrowings of
such subsidiaries under the Credit Agreement. See "Holding Company Structure."
Debt Securities may be sold at a discount (which may be substantial) below
their stated principal amount bearing no interest or interest at a rate which
at the time of issuance is below market rates. Any material United States
federal income tax consequences and other special considerations applicable
thereto will be described in the Prospectus Supplement relating to any such
Debt Securities.
7
<PAGE>
If any of the Debt Securities are sold for any foreign currency or currency
unit or if the principal of, or premium or interest, if any, on any of the
Debt Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other
information with respect to such Debt Securities and such foreign currency or
currency unit will be set forth in the Prospectus Supplement relating thereto.
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets. These risks will
vary depending upon the currency or currencies involved. If applicable, these
risks will be more fully described in the Prospectus Supplement relating
thereto.
COVENANTS
The Indentures require the Company to covenant, among other things, with
respect to each series of Debt Securities: (i) to duly and punctually pay the
principal of (and premium, if any) and interest, if any, on such series of
Debt Securities; (ii) to maintain an office or agency in each Place of Payment
where Debt Securities may be presented or surrendered for payment, transferred
or exchanged and where notices to the Company may be served; (iii) if the
Company shall act as its own Paying Agent for any series of Debt Securities,
to segregate and hold in trust for the benefit of the Persons entitled thereto
a sum sufficient to pay the principal (and premium, if any) or interest, if
any, so becoming due; (iv) to preserve its corporate existence; (v) to
maintain its properties; (vi) to pay taxes and other claims, in each case, as
required by the Indentures; and (vii) to deliver to the Trustee, within 120
days after the end of each fiscal year, a written statement to the effect that
the Company has fulfilled all its obligations under the Indentures throughout
such year. (Article Ten)
EVENTS OF DEFAULT
Unless otherwise provided with respect to any series of Debt Securities, the
following are Events of Default under each Indenture with respect to the Debt
Securities of such series issued under the Indenture: (a) failure to pay any
interest on any Debt Security of such series when due, continued for 30 days;
(b) failure to pay principal of (or premium, if any, on) any Debt Security of
such series when due; (c) failure to deposit any mandatory sinking fund
payment, when due, in respect of the Debt Securities of such series; (d)
failure to perform any other covenant of the Company in the applicable
Indenture (other than a covenant included in the applicable Indenture for the
benefit of a series of Debt Securities other than such series), continued for
60 days after written notice as provided in the applicable Indenture; (e)
certain events of bankruptcy, insolvency or reorganization; and (f) any other
Event of Default as may be established with respect to Debt Securities of such
series (including, without limitation, any Event of Default arising out of a
default which results in the acceleration of certain Indebtedness or a default
in the payment of any amounts due on certain Indebtedness). (Sections 301 and
501) If an Event of Default with respect to any outstanding series of Debt
Securities occurs and is continuing, either the Trustee or the holders of at
least 25% in principal amount of the outstanding Debt Securities of such
series (subject to the next following sentence, in the case of an Event of
Default described in clause (a), (b), (c) or (d) above) or at least 25% in
principal amount of all outstanding Debt Securities under the Indenture
(subject to the next following sentence, in the case of other Events of
Default) may declare the principal amount of all the Debt Securities of the
applicable series (or of all outstanding Debt Securities under the applicable
Indenture, as the case may be) to be due and payable immediately. If an Event
of Default described in clause (e) or (f) shall occur, the principal amount of
the outstanding Debt Securities of all series ipso facto shall become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or any holder. At any time after a declaration of acceleration
has been made, but before a judgment has been obtained, the holders of a
majority in principal amount of the outstanding Debt Securities of such series
(or all outstanding Debt Securities under the applicable Indenture, as the
case may be) may, under certain circumstances, rescind and annul such
acceleration. (Section 502) Depending on the terms of other Indebtedness of
the Company outstanding from time to time, an Event of Default under an
Indenture may give rise to cross defaults on such other Indebtedness of the
Company.
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, give to
the holders of the Debt Securities of such series notice of all uncured and
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unwaived defaults known to it; provided, however, that, except in the case of
a default in the payment of the principal of (or premium, if any) or any
interest on, or any sinking fund installment with respect to, any Debt
Securities of such series, the Trustee will be protected in withholding such
notice if it in good faith determines that the withholding of such notice is
in the interest of the holders of the Debt Securities of such series; and
provided, further, that such notice shall not be given until at least 30 days
after the occurrence of a default in the performance, or breach, of any
covenant or warranty of the Company under such Indenture other than for the
payment of the principal of (or premium, if any) or any interest on, or any
sinking fund installment with respect to, any Debt Securities of such series.
For the purpose of this provision, "default" with respect to Debt Securities
of any series means any event which is, or after notice or lapse of time, or
both, would become, an Event of Default with respect to the Debt Securities of
such series. (Section 602)
The holders of a majority in principal amount of the outstanding Debt
Securities of any series (or, in certain cases, all outstanding Debt
Securities under the applicable Indenture) have the right, subject to certain
limitations, 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
(or of all outstanding Debt Securities under the applicable Indenture).
(Section 512) Each Indenture provides that in case an Event of Default shall
occur and be continuing with respect to the Debt Securities of any series, the
Trustee shall exercise such of its rights and powers under the applicable
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs. (Section 701; Section 601) Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under either Indenture at the request of any of the holders of the Debt
Securities unless they shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request. (Section 603) The holders of a
majority in principal amount of the outstanding Debt Securities of any series
(or, in certain cases, all outstanding Debt Securities under the applicable
Indenture) may on behalf of the holders of all Debt Securities of such series
(or of all outstanding Debt Securities under the applicable Indenture) waive
any past default under the Indenture, except a default in the payment of the
principal of (or premium, if any) or interest on any Debt Security or in
respect of a provision which under the applicable Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debt Security
affected. (Section 513) The holders of a majority in principal amount of the
outstanding Debt Securities affected thereby may on behalf of the holders of
all such Debt Securities waive compliance by the Company with certain
restrictive provisions of the Indenture. (Section 1008 of the Subordinated
Indenture; Section 1010 of the Senior Indenture)
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under each
Indenture and as to any default in such performance. (Section 1007 of the
Subordinated Indenture; Section 1009 of the Senior Indenture)
MODIFICATION
Modifications and amendments of each Indenture may be made by the Company
and the Trustee with the consent of the holders of a majority in principal
amount of the outstanding Debt Securities under the Indenture affected
thereby, provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding Debt Security affected
thereby, (a) change the stated maturity date of the principal of, or any
installment of interest on, any Debt Security, (b) reduce the percentage in
principal amount of outstanding Debt Securities the consent of whose holders
is required for modification or amendment of the Indentures or for waiver of
compliance with certain provisions of the Indentures or for waiver of certain
defaults, (c) reduce the principal amount of, or the premium (if any) or
interest on, any Debt Security, (d) change the Place of Payment or currency,
currencies, or currency unit or units of payment of principal of, or premium
(if any) or interest on, any Debt Security or (e) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Debt Security. (Section 902)
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Each Indenture provides that the Company and the Trustee may, without the
consent of any holders of Debt Securities, enter into supplemental indentures
for the purposes, among other things, of evidencing the succession of another
Person to the Company and the assumption by any such successor of the
covenants of the Company, adding to the Company's covenants, securing the Debt
Securities, adding additional Events of Default, establishing the form or
terms of Debt Securities or curing ambiguities or inconsistencies in the
applicable Indenture, provided such action to cure ambiguities or
inconsistencies shall not adversely affect the interests of the holders of the
Debt Securities in any material respect. (Section 901)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any holders of outstanding Debt
Securities, may consolidate with or merge into, or convey, transfer or lease
its assets substantially as an entirety to, any Person, provided that the
Person formed by such consolidation or into which the Company is merged or
which acquires or leases the assets and properties of the Company
substantially as an entirety is a corporation, partnership or trust organized
under the laws of any United States jurisdiction and assumes by supplemental
indenture the Company's obligations on the Debt Securities and under the
Indenture, that after giving effect to the transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing, and that certain
other conditions are met. Upon compliance with these provisions by a successor
Person, the Company will (except in the case of a lease) be relieved of its
obligations under the Indenture and the Debt Securities. (Article Eight)
DISCHARGE AND DEFEASANCE
Unless otherwise provided with respect to any series of Debt Securities, the
Company may terminate its obligations under each Indenture with respect to
Debt Securities of any series, other than its obligation to pay the principal
of (and premium, if any) and interest on such Debt Securities and certain
other obligations, if it (i) irrevocably deposits or causes to be irrevocably
deposited with the Trustee as trust funds money or U.S. Government Obligations
maturing as to principal and interest sufficient to pay the principal of, any
interest on, and any mandatory sinking funds in respect of, all outstanding
Debt Securities of such series on the stated maturity of such payments or on
any redemption date, (ii) has delivered to the Trustee an opinion of counsel
to the effect that the holders of Debt Securities of such series will not
recognize income, gain or loss for United States federal income tax purposes
as a result of such discharge and will be subject to United States federal
income tax on the same amount and in the same manner and at the same time as
would have been the case if such discharge had not occurred, and (iii)
complies with any additional conditions specified to be applicable with
respect to the covenant defeasance of Debt Securities of such series, and no
default or Event of Default with respect to the Debt Securities of such series
shall have occurred and be continuing on the date of such deposit or, insofar
as they relate to certain events of bankruptcy or insolvency, at any time in
the period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period). (Section 401)
The terms of any series of Debt Securities may also provide for legal
defeasance pursuant to each Indenture. In such case, if the Company (i)
irrevocably deposits or causes to be irrevocably deposited money or U.S.
Government Obligations as described above and complies with the other
provisions described above (except that the opinion referred to in clause (ii)
above must be based on a ruling by the Internal Revenue Service or other
change under applicable United States federal income tax law), (ii) makes a
request to the Trustee to be discharged from its obligations on the Debt
Securities of such series and (iii) complies with any additional conditions
specified to be applicable with respect to legal defeasance of Debt Securities
of such series, then the Company shall be deemed to have paid and discharged
the entire indebtedness on all the outstanding Debt Securities of such series,
and the obligations of the Company under the applicable Indenture and the Debt
Securities of such series to pay the principal of (and premium, if any) and
interest on the Debt Securities of such series shall cease, terminate and be
completely discharged and the holders thereof shall thereafter be entitled
only to payment out of the money or U.S. Government Obligations deposited with
the Trustee as aforesaid,
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unless the Company's obligations are revived and reinstated because the
Trustee is unable to apply such trust fund by reason of any legal proceeding,
order or judgment. (Sections 403 and 404)
CONVERSION RIGHTS
The terms on which Debt Securities of any series are convertible into or
exchangeable for Common Stock or other securities or property of the Company
will be set forth in the Prospectus Supplement relating thereto. Such terms
shall include provisions as to whether conversion or exchange is mandatory, at
the option of the holder or at the option of the Company, and may include
provisions pursuant to which the number of shares of Common Stock or other
securities of the Company to be received by the holders of Debt Securities
would be calculated according to the market price of Common Stock or other
securities of the Company as of a time stated in the Prospectus Supplement.
The conversion price of any Debt Securities of any series that is convertible
into Common Stock or other securities of the Company may be adjusted for any
stock dividends, stock splits, reclassification, combinations or similar
transactions, as set forth in the applicable Prospectus Supplement. (Article
Fourteen)
EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of any series will be exchangeable for other Debt Securities
of the same series and of a like aggregate principal amount and tenor of
different authorized denominations. Debt Securities may be presented for
exchange and for registration of transfer (with the form of transfer endorsed
thereon duly executed), at the office of the Security Registrar or at the
office of any transfer agent designated by the Company for such purpose with
respect to any series of Debt Securities and referred to in an applicable
Prospectus Supplement, without a service charge and upon payment of any taxes
and other governmental charges as described in the applicable Indenture. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the document of title
and identity of the Person making the request. The Company has appointed the
Trustee as Security Registrar. (Section 305) If a Prospectus Supplement refers
to any transfer agents (in addition to the Security Registrar) initially
designated by the Company with respect to any series of Debt Securities, the
Company may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that the Company will be required to maintain a transfer agent in each
Place of Payment for such series. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 1002)
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
mailing of notice of redemption of Debt Securities of that series for
redemption and ending on the close of business on the day of mailing of the
relevant notice of redemption or (ii) register the transfer of or exchange any
Registered Debt Security, or portion thereof, called for redemption, except
the unredeemed portion of any Registered Debt Security being redeemed in part.
(Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Debt Securities
will be made in the designated currency or currency unit at the office of such
Paying Agent or Paying Agents as the Company may designate from time to time,
except that at the option of the Company payment of any interest may be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Debt Securities will be made to the Person in whose name such
Registered Debt Security is registered at the close of business on the Regular
Record Date for such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York will be designated as a Paying Agent for the
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Company for payments with respect to Debt Securities which are issuable solely
as Registered Debt Securities. Any other Paying Agents in the United States
initially designated by the Company for the Debt Securities will be named in
an applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except
that the Company will be required to maintain a Paying Agent in each Place of
Payment for such series. (Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed at the end of three years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company, and the holder of such Debt Security will thereafter as
an unsecured general creditor look only to the Company for payment thereof.
(Section 1003)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depositary or its nominee
identified in the applicable Prospectus Supplement. In such a case, one or
more Global Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
Outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part
for Debt Securities in definitive registered form, a Global Security may not
be registered for transfer or exchange except as a whole by the Depositary for
such Global Security to a nominee for such Depositary and except in the
circumstances described in the Applicable Prospectus Supplement. (Sections
204)
The Company expects that the following provisions will apply to depositary
arrangements with respect to any portion of a series of Debt Securities to be
represented by a Global Security. Any additional specific terms of the
depositary arrangement will be described in the applicable Prospectus
Supplement.
Upon the issuance of any Global Security, and the deposit of such Global
Security with or on behalf of the Depositary for such Global Security, the
Depositary will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of institutions ("Participants") that have
accounts with the Depositary or its nominee. The accounts to be credited will
be designated by the underwriters or agents engaging in the distribution of
such Debt Securities or by the Company, if such Debt Securities are offered
and sold directly by the Company. Ownership of beneficial interests in a
Global Security will be limited to Participants or persons that may hold
interest through Participants. Ownership of beneficial interests by
Participants in such Global Security will be shown on, and the transfer of
such beneficial interests will be effected only through, records maintained by
the Depositary for such Global Security or by its nominee. Ownership of
beneficial interests in such Global Security by persons that hold through
Participants will be shown on, and the transfer of such beneficial interests
within such Participants will be effected only through, records maintained by
such Participants. The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indentures. Unless otherwise specified in the applicable Prospectus Supplement
and except as specified below, owners of beneficial interests in such Global
Security will not be entitled to have Debt Securities of the series
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of Debt Securities of such
series in certificated form and will not be considered the holders thereof for
any purposes under the Indentures. Accordingly, each person owning a
beneficial interest in such Global Security must rely on the procedures of the
Depositary and, if such person is not a Participant, on the procedures of the
Participant through which such person owns their interest, to exercise any
rights of a holder under the Indentures.
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The Depositary may grant proxies and otherwise authorize Participants to
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action which a holder is entitled to give or take under the
Indentures. The Company understands that, under existing industry practices,
if the Company requests any action of holders or any owner of a beneficial
interest in such Global Security desires to give any notice or take any action
a holder is entitled to give or take under the Indentures, the Depositary
would authorize the Participants to give such notice or take such action, and
Participants would authorize beneficial owners owning through such
Participants to give such notice or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable Prospectus Supplement, payments
with respect to principal, premium, if any, and interest on Debt Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made by the Company to such Depositary or its nominee, as the
case may be, as the registered owner of such Global Security.
The Company expects that the Depositary for any Debt Securities represented
by a Global Security, upon receipt of any payment of principal, premium or
interest, will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of such Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in such Global Security held through such Participants will be
governed by standing instructions and customary practices, as is now the case
with the securities held for the accounts of customers registered in "street
names," and will be the responsibility of such Participants. None of the
Company, the Trustee or any agent of the Company or the Trustee shall have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests. (Section 308)
Unless otherwise specified in the applicable Prospectus Supplement, a Global
Security of any series will be exchangeable for certificated Debt Securities
of the same series only if (i) the Depositary for such Global Securities
notifies the Company that it is unwilling or unable to continue as Depositary
or such Depositary ceases to be a clearing agency registered under the
Exchange Act (if so required by applicable law or regulation) and, in either
case, a successor Depositary is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such ineligibility,
(ii) the Company in its sole discretion determines that such Global Securities
shall be exchangeable for certificated Debt Securities or (iii) there shall
have occurred and be continuing an Event of Default under the Indenture with
respect to the Debt Securities of such series. Upon any such exchange, owners
of beneficial interests in such Global Security or Securities will be entitled
to physical delivery of individual Debt Securities in certificated form of
like tenor and terms equal in principal amount to such beneficial interests,
and to have such Debt Securities in certificated form registered in the names
of the beneficial owners, which names are expected to be provided by such
Depositary's relevant Participants (as identified by such Depositary) to the
Trustee.
The following is based on information furnished to the Company:
In the event that the Depositary Trust Company ("DTC") acts as Depositary
for the Global Securities of any series, such Global Securities will be issued
as fully registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully registered Global Security will be issued with
respect to each $200 million (or such other amount as shall be permitted by
DTC from time to time) of principal amount of the Debt Securities of a series,
and an additional certificate will be issued with respect to any remaining
principal amount of such series.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions,
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such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to
others, such as securities brokers and dealers and banks and trust companies
that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the Commission.
To facilitate subsequent transfers, the Debt Securities are registered in
the name of DTC's nominee, Cede & Co. The deposit of the Debt Securities with
DTC and their registration in the name of Cede & Co. will effect no change in
beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the Debt Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts Debt Securities are credited, which may or may
not be the beneficial owners. The Participants remain responsible for keeping
account of their holdings on behalf of their customers.
Delivery of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants
and Indirect Participants to beneficial owners of Debt Securities is governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. consents or votes with respect to the Debt
Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus Proxy")
to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts the Debt Securities are credited on the record date
(identified on a list attached to the Omnibus Proxy).
If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the Debt Securities of a series represented by Global Securities are
being redeemed, DTC's practice is to determine by lot the amount of the
interest of each Direct Participant in such issue to be redeemed.
To the extent that any Debt Securities provide for repayment or repurchase
at the option of the holders thereof, a beneficial owner shall give notice of
any option to elect to have its interest in the Global Security repaid by the
Company, through its Participant, to the Trustee, and shall effect delivery of
such interest in a Global Security by causing the Direct Participant to
transfer the Direct Participant's interest in the Global Security or
Securities representing such interest, on DTC's records, to the Trustee. The
requirement for physical delivery of Debt Securities in connection with a
demand for repayment or repurchase will be deemed satisfied when the ownership
rights in the Global Security or Securities representing such Debt Securities
are transferred by Direct Participants on DTC's records.
DTC may discontinue providing its services as securities depositary with
respect to the Debt Securities at any time. Under such circumstances, in the
event that a successor securities depositary is not appointed, Debt Security
certificates are required to be printed and delivered as described above.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Debt Security certificates will be printed and delivered as described above.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but
the Company takes no responsibility for the accuracy thereof.
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MEETINGS
The Indentures contain provisions for convening meetings of the holders of
Debt Securities of a series. A meeting may be called at any time by the
Trustee, and also, upon request, by the Company or the holders of at least 25%
in principal amount of the Outstanding Debt Securities of such series, in any
such case upon notice given as described under "--Notices" below. Except for
any consent that must be given by the holder of each Outstanding Debt Security
affected thereby, as described under "--Modification" above, any resolution
presented at a meeting or adjourned meeting at which a quorum is present may
be adopted by the affirmative vote of the holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of that series; provided,
however, that except for any consent that must be given by the holder of each
Outstanding Debt Security affected thereby, as described under "--
Modification" above, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that may be
made, given or taken by the holders of a specified percentage, which is less
than a majority in principal amount of the Outstanding Debt Securities of a
series may be adopted at a meeting or adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the holders of such
specified percentage in principal amount of the Outstanding Debt Securities of
that series. Subject to the proviso set forth above, any resolution passed or
action taken at any meeting of holders of Debt Securities of any series duly
held in accordance with each Indenture will be binding on all holders of Debt
Securities of that series and any related coupons. The quorum at any meeting
called to adopt a resolution, and at any reconvened meeting, will be Persons
holding or representing a majority in principal amount of the Outstanding Debt
Securities of a series. (Article Thirteen)
NOTICES
Notices to holders of Debt Securities will be given by mail to the addresses
of such holders as they appear in the Security Register. (Section 107)
THE TRUSTEE
The Indentures provide that the Trustee shall authenticate and deliver Debt
Securities of a particular series in accordance with a Company Order. Each
Indenture contains certain limitations on the right of the Trustee, should it
become a creditor of the Company, to obtain payment of claims in certain cases
and to realize certain property received with respect to any such claims, as
security or otherwise. (Section 613) The Trustee is one of the lenders under
certain of the Company's Credit Facilities. The Trustee is permitted to engage
in other transactions, except that, if it acquires any conflicting interest
and there is a default under the Debt Securities, it must eliminate such
conflict or resign. (Section 608)
GOVERNING LAW
The Indentures are, and the Debt Securities will be, governed by and
construed in accordance with the laws of the State of New York, but without
giving effect to principles of conflicts of law. (Section 113)
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
Senior Debt Securities will be issued under the Senior Indenture and will
rank pari passu in right of payment with the Company's obligations under its
Credit Facilities and all other unsecured and unsubordinated debt of the
Company, and will be senior in right of payment to all existing and future
debt of the Company that is, by its terms, expressly subordinated to the
Senior Debt Securities. The Senior Debt Securities issued under this
Prospectus will not be guaranteed by any subsidiary of the Company and will
not rank pari passu with any debt of such subsidiary, but will be senior in
right of payment to all existing and future debt of such subsidiary that is,
by its terms, expressly subordinated to the Senior Debt Securities.
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COVENANT PROVIDING FOR LIMITATION ON LIENS
Nothing in the Senior Indenture or the Senior Debt Securities will in any
way restrict or prevent the Company or any Restricted Subsidiary from issuing,
assuming, guaranteeing or otherwise incurring any Indebtedness, provided,
however, the Senior Indenture will provide that the Company will not, and will
not permit any Restricted Subsidiary to, issue, assume or guarantee any
Indebtedness for borrowed money secured by any Lien on any property or asset
now owned or hereafter acquired by the Company or such Restricted Subsidiary
without making effective provision whereby any and all Senior Debt Securities
then or thereafter outstanding will be secured by a Lien equally and ratably
with any and all other obligations thereby secured for so long as any such
obligations shall be so secured.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary may,
without so securing the Senior Debt Securities, issue, assume or guarantee
Indebtedness secured by the following Liens:
(a) Liens existing on the date on which the Senior Debt Securities are
originally issued or provided for under the terms of agreements existing on
such date;
(b) Liens on property securing (i) all or any portion of the cost of
acquiring, constructing, altering, improving or repairing any property or
assets, real or personal, or improvements used or to be used in connection
with such property of the Company or Restricted Subsidiaries or (ii)
Indebtedness incurred by the Company or any Restricted Subsidiary to
provide funds for the activities set forth in clause (i) above;
(c) Liens securing Indebtedness owed by a Restricted Subsidiary to the
Company or to any other Restricted Subsidiary;
(d) Liens on the property of any Person existing at the time such Person
becomes a Subsidiary of the Company and not incurred as a result of (or in
connection with or in anticipation of) such Person becoming a Subsidiary of
the Company, provided that such Liens do not extend to or cover any
property or assets of the Company or any of its Subsidiaries other than the
property so acquired;
(e) Liens on any property securing (i) Indebtedness incurred in
connection with the construction, installation or financing of pollution
control or abatement facilities or other forms of industrial revenue bond
financing or (ii) Indebtedness issued or guaranteed by the United States or
any State thereof or any department, agency or instrumentality of either;
(f) any Lien extending, renewing or replacing (or successive extensions,
renewals or replacements of) any Lien of any type permitted under clauses
(a) through (e) above, provided that such Lien extends to or covers only
the property that is subject to the Lien being extended, renewed or
replaced;
(g) certain Liens arising, but only so long as continuing, in the
ordinary course of business of the Company and the Restricted Subsidiaries;
or
(h) Liens (exclusive of any Lien of any type otherwise permitted under
clauses (a) through (g) above) securing Indebtedness of the Company or any
Restricted Subsidiary in an aggregate principal amount which, together with
the aggregate amount of Attributable Indebtedness deemed to be outstanding
in respect of all Sale/Leaseback Transactions entered into pursuant to
clause (a) of the covenant described under "Limitation on Sale/Leaseback
Transactions" below (exclusive of any such Sale/Leaseback Transactions
otherwise permitted under clauses (a) through (g) above), does not at the
time such Indebtedness is incurred exceed 15% of the Consolidated Net
Tangible Assets of the Company (as shown in the most recent audited
consolidated balance sheet of the Company and its Subsidiaries). (Section
1007 of the Senior Indenture)
COVENANT PROVIDING FOR LIMITATION ON SALE/LEASEBACK TRANSACTIONS
The Senior Indenture will provide that the Company will not, and will not
permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction
with any Person (other than the Company or a Restricted Subsidiary) unless:
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(a) the Company or such Restricted Subsidiary would be entitled to incur
Indebtedness, in a principal amount equal to the Attributable Indebtedness
with respect to such Sale/Leaseback Transaction, secured by a Lien on the
property subject to such Sale/Leaseback Transaction pursuant to the
covenant described under "Limitation on Liens" above without equally and
ratably securing the Senior Debt Securities pursuant to such covenant;
(b) after the date on which the Senior Debt Securities are originally
issued and within a period commencing six months prior to the consummation
of such Sale/Leaseback Transaction and ending six months after the
consummation thereof, the Company or such Restricted Subsidiary shall have
expended for property used or to be used in the ordinary course of business
of the Company and the Restricted Subsidiaries an amount equal to all or a
portion of the net proceeds of such Sale/Leaseback Transaction and the
Company shall have elected to designate such amount as a credit against
such Sale/Leaseback Transaction (with any such amount not being so
designated to be applied as set forth in clause (c) below); or
(c) the Company, during the 12-month period after the effective date of
such Sale/Leaseback Transaction, shall have applied to the voluntary
defeasance or retirement of any Pari Passu Indebtedness an amount equal to
the greater of the net proceeds of the sale or transfer of the property
leased in such Sale/Leaseback Transaction and the fair value, as determined
by the Board of Directors of the Company, of such property at the time of
entering into such Sale/Leaseback Transaction (in either case adjusted to
reflect the remaining term of the lease and any amount expended by the
Company as set forth in clause (b) above), less an amount equal to the
principal amount of Debt Securities and Pari Passu Indebtedness voluntarily
defeased or retired by the Company within such 12-month period and not
designated as a credit against any other Sale/Leaseback Transaction entered
into by the Company or any Restricted Subsidiary during such period.
(Section 1106 of the Senior Indenture)
The term "Attributable Indebtedness," when used with respect to any
Sale/Leaseback Transaction, is defined in the Senior Indenture as at the time
of determination, the present value (discounted at a rate equivalent to the
Company's then current weighted average cost of funds for borrowed money as at
the time of determination, compounded on a semi-annual basis) of the total
obligations of the lessee for rental payments (other than amounts required to
be paid or account of maintenance and repairs, reconstruction, insurance,
taxes, assessments, water rates, and similar charges are contingent rates
(such as those based on sales)) during the remaining term of the lease
included in such Sale/Leaseback Transaction (including any period for which
such lease has been extended).
The term "Capitalized Lease Obligation" of any Person is defined in the
Senior Indenture as any obligation of such Person to pay rent or other amounts
under a lease of property, real or personal, that is required to be
capitalized for financial reporting purposes in accordance with generally
accepted accounting principles; and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with generally accepted
accounting principles.
The term "Consolidated Net Tangible Assets" of the Company is defined in the
Senior Indenture as the aggregate amount of assets (less applicable reserves
and other properly deductible items) after deducting therefrom (i) all current
liabilities, and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like tangibles, all as set
forth on the most recent quarterly balance sheet of the Company and its
consolidated subsidiaries and computed in accordance with generally accepted
accounting principles.
The term "Funded Indebtedness" is defined in the Senior Indenture as all
Indebtedness (including Indebtedness incurred under any revolving credit,
letter of credit or working capital facility) that matures by its terms, or
that is renewable at the option of any obligor thereon to a date, more than
one year after the date on which such Indebtedness is originally incurred.
The term "Hedging Obligations" of any Person is defined in the Senior
Indenture as the obligations of such Person pursuant to any interest rate swap
agreement, foreign currency exchange agreement, interest rate
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collar agreement, option or future contract or other similar agreement or
arrangement relating to interest rates or foreign exchange rates.
The term "Indebtedness" of any Person at any date is defined in the Senior
Indenture as, without duplication, (i) all indebtedness of such Person for
borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such Person or only to a portion thereof), (ii) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person in respect of letters of
credit or other similar instruments (or reimbursement obligations with respect
thereto), other than standby letters of credit incurred by such Person in the
ordinary course of business, (iv) all obligations of such Person to pay the
deferred and unpaid purchase price of property or services, except trade
payables and accrued expenses incurred in the ordinary course of business, (v)
all Capitalized Lease Obligations of such Person, (vi) all Indebtedness of
others secured by a lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person, (vii) all Indebtedness of others
guaranteed by such Person to the extent of such guarantee and (viii) all
Hedging Obligations of such Person.
The term "Lien" is defined in the Senior Indenture as, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law. For the purposes of the Senior Indenture, the
Company or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, Capitalized Lease Obligation (other than
any Capitalized Lease Obligation relating to any building, structure,
equipment or other property used or to be used in the ordinary course of
business of the Company and the Restricted Subsidiaries) or other title
retention agreement relating to such asset.
The term "Pari Passu Indebtedness" is defined in the Senior Indenture as any
Indebtedness of the Company, whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
be subordinated in right of payment to the Securities.
The term "Restricted Subsidiary" is defined in the Senior Indenture as any
Subsidiary of the Company (i) substantially all the property of which is
located, or substantially all the business of which is carried on, within the
United States of America (not including its territories and possessions) and
(ii) that owns a Principal Property; provided, however, that the term
"Restricted Subsidiary" shall not include any Subsidiary that is principally
engaged in financing the operations of the Company, or its Subsidiaries, or
both, outside the United States of America. "Principal Property" means any
manufacturing plant or facility located within the United States of America
(other than its territories or possessions) owned by the Company or any
Restricted Subsidiary which, in the opinion of the Board of Directors, is of
material importance to the total business conducted by the Company and its
Restricted Subsidiaries as a whole.
The term "Sale/Leaseback Transaction" is defined in the Senior Indenture as
any arrangement with any Person providing for the leasing by the Company or
any Restricted Subsidiary, for a period of more than three years, of any real
or tangible personal property, which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person in
contemplation of such leasing.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
GENERAL
Subordinated Debt Securities will be issued under the Subordinated Indenture
and will rank pari passu with certain other subordinated debt of the Company
that may be outstanding from time to time and will rank junior to all Senior
Indebtedness (including any Senior Debt Securities) of the Company that may be
outstanding from time to time.
SUBORDINATION
The payment of the principal of (and premium, if any) and interest on the
Subordinated Debt Securities is expressly subordinated, to the extent and in
the manner set forth in the Subordinated Indenture, in right of payment to the
prior payment in full of all Senior Indebtedness of the Company. (Section 1501
of the Subordinated Indenture)
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In the event of any dissolution or winding up, or total or partial
liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, the holders of
Senior Indebtedness will be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Indebtedness before the
holders of the Subordinated Debt Securities are entitled to receive any
payment on account of principal (or premium, if any) or interest on the
Subordinated Debt Securities. (Section 1502 of the Subordinated Indenture) By
reason of subordination of the Subordinated Debt Securities, in the event of
the insolvency of the Company, holders of the Subordinated Debt Securities may
recover less, ratably, than holders of Senior Indebtedness.
Unless otherwise indicated in the applicable Prospectus Supplement, no
payment in respect of the Subordinated Debt Securities shall be made if, at
the time of such payment, there exists a default in payment of all or any
portion of any Senior Indebtedness, and such default shall not have been cured
or waived in writing or the benefits of such subordination in the Subordinated
Indenture shall not have been waived in writing by or on behalf of the holders
of such Senior Indebtedness. In addition, unless otherwise provided in the
applicable Prospectus Supplement, during the continuance of any event of
default (other than a default referred to in the immediately preceding
sentence) with respect to any Senior Indebtedness permitting the holders to
accelerate the maturity thereof and upon written notice thereof given to the
Trustee, with a copy to the Company (the delivery of which shall not affect
the validity of the notice to the Trustee), by any holder of Senior
Indebtedness or its representative, then, unless and until such an event of
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by the Company with respect to the principal of or
interest on the Subordinated Debt Securities or to acquire any of the
Subordinated Debt Securities or on account of the redemption provisions of the
Subordinated Debt Securities provided, however, that if the holders of the
Senior Indebtedness to which the default relates have not declared such Senior
Indebtedness to be immediately due and payable and within 180 days after the
occurrence of such default (or have declared such Senior Indebtedness to be
immediately due and payable within such period have rescinded such declaration
of acceleration), then the Company shall resume making any and all required
payments in respect of the Securities (including any missed payments). Only
one such payment blockage period may be commenced within any consecutive 365-
day period with respect to the Subordinated Debt Securities. No event of
default which existed or was continuing on the date of the commencement of any
180-day payment blockage period with respect to the Senior Indebtedness
initiating such payment blockage period shall be, or be made, the basis for
the commencement of a second payment blockage period by a holder or
representative of such Senior Indebtedness, whether or not within a period of
365 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (and, in the case of
any such waiver, no payment shall be made by the Company to the holders of
Senior Indebtedness in connection with such waiver other than amounts due
pursuant to the terms of the Senior Indebtedness as in effect at the time of
such default). (1502 of the Subordinated Indenture)
The term "Indebtedness" of any Person at any date is defined in the
Subordinated Indenture as, without duplication, (i) all indebtedness of such
Person for borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (or reimbursement obligations
with respect thereto), other than standby letters of credit incurred by such
Person in the ordinary course of business, (iv) all obligations of such Person
to pay the deferred and unpaid purchase price of property or services, except
trade payables and accrued expenses incurred in the ordinary course of
business, (v) all Capitalized Lease Obligations of such Person, (vi) all
Indebtedness of others secured by a lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person, (vii) all Indebtedness of
others guaranteed by such Person to the extent of such guarantee and (viii)
all Hedging Obligations of such Person.
The term "Senior Indebtedness" is defined in the Subordinated Indenture as
Indebtedness, either outstanding as of the date of the Subordinated Indenture
or issued subsequent to the date of the Subordinated Indenture, unless such
Indebtedness is either subordinated by its terms in right of payment to any
other Indebtedness of the Company or pari passu with subordinated Indebtedness
of any series, provided that the term "Senior Indebtedness" shall not include
(i) Indebtedness of the Company to any Subsidiary for money borrowed or
advanced from such Subsidiary or (ii) amounts owed (except to banks and other
financial institutions) for goods, materials or services purchased in the
ordinary course of business.
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If Subordinated Debt Securities are issued under the Subordinated Indenture,
the aggregate principal amount of Senior Indebtedness outstanding as of a
recent date will be set forth in the applicable Prospectus Supplement. The
Subordinated Indenture does not restrict the amount of Senior Indebtedness
that the Company may incur.
DESCRIPTION OF CAPITAL STOCK
Under the Company's Restated Certificate of Incorporation as amended (the
"Charter"), the Company is authorized to issue 81,000,000 shares of capital
stock ("Capital Stock") consisting of 1,000,000 shares of Preferred Stock, no
par value, and 80,000,000 shares of Common Stock, par value $1.00 per share.
As of June 30, 1998, there were 41,447,354 shares of Common Stock outstanding
and no shares of Preferred Stock outstanding. Of the authorized shares of
Preferred Stock, 500,000 shares have been designated as Series A Participating
Preferred Stock, as described below under "--Stockholders' Rights Plan."
COMMON STOCK
The Common Stock possesses ordinary voting rights for the election of
directors and in respect of other corporate matters, each share being entitled
to one vote. There are no cumulative voting rights, meaning that the holders
of a majority of the shares voting for the election of directors can elect all
the directors if they choose to do so. The Common Stock carries no preemptive
rights and is not convertible, redeemable or assessable. Subject to the prior
rights of any shares of Preferred Stock that may from time to time be
outstanding, the holders of Common Stock are entitled to dividends in such
amounts and at such times as may be declared by the Board of Directors.
Upon liquidation or dissolution, holders of Common Stock are entitled to
share ratably in all net assets available for distribution to stockholders
after payment of preferential amounts to holders of Preferred Stock. All
outstanding shares of Common Stock are, and the shares of Common Stock to be
sold by the Company in connection with any offering pursuant to this
Prospectus and any Prospectus Supplement when issued will be, duly authorized,
validly issued, fully paid and nonassessable.
The outstanding Common Stock is listed on the New York Stock Exchange under
the symbol "NSI." Any Common Stock issuable upon the conversion or exchange of
Debt Securities or Preferred Stock offered hereunder will be listed, subject
to notice of issuance, on such exchange.
The transfer agent and registrar for the Common Stock is First Chicago Trust
Company of New York.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
Section 203 of the Delaware General Corporation Law ("DGCL") prevents an
"interested stockholder" (defined in Section 203, generally, as a person
owning 15% or more of a corporation's outstanding voting stock), from engaging
in a "business combination" (as defined in Section 203) with a publicly-held
Delaware corporation for three years following the date such person became an
interested stockholder unless: (i) before such person became an interested
stockholder, the board of directors of the corporation approved the
transaction in which the interested stockholder became an interested
stockholder or approved the business combination; (ii) upon consummation of
the transaction that resulted in the interested stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding stock held by directors who are also officers of the
corporation and by employee stock plans that do not provide participants with
the rights to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer); or (iii) following the
transaction in which such person became an interested stockholder, the
business combination is approved by the board of directors of the corporation
and authorized at a meeting of stockholders by the affirmative vote of the
holders of two-thirds of the outstanding voting stock of the corporation not
owned by the interested stockholder. The provisions of Section 203 may have
the effect of delaying, deferring or preventing a change of control of the
Company.
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STOCKHOLDERS' RIGHTS PLAN
The Company has a Stockholders' Rights Plan which it first adopted in 1988 and
amended in 1997 (the "Rights Plan"), the terms and conditions of which are set
forth in an Amended and Restated Rights Agreement (the "Rights Agreement"). The
Rights Plan provides that each share of Common Stock has associated with it a
stock purchase right ( a "Right"). Each Right, when exercisable, entitles the
registered holder to purchase from the Company one one-thousandth of a share of
a series of convertible preferred stock, designated as Series A Participating
Preferred Stock, $0.05 par value (the "Series A Preferred Stock"), at a price of
$160 (the "Purchase Price"), subject to adjustment. The Series A Preferred Stock
purchasable upon the exercise of Rights will contain preferential voting,
dividend, liquidation and other economic rights. The Rights become exercisable
only if a person or group acquires, or has obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Common Stock without the
Company's prior consent or commences a tender or exchange offer that would
result in such person or group owning 15% or more of the Common Stock without
the Company's prior consent or if certain business combinations or sales of
assets or earning power of the Company are expected to be consummated. If any
person becomes the beneficial owner of 15% or more of the shares of Common Stock
(an "Acquiring Person"), except pursuant to a Permitted Offer (as defined in the
Rights Agreement), each Right will be exercisable for the number of units of one
one-thousandths of a share of Series A Preferred Stock having an average market
value during a specified period of two times the Purchase Price of the Right. In
addition, if, after a person has become an Acquiring Person, the Company is
involved in a merger or other business combination transaction in which it is
not the surviving corporation or in connection with which the Common Stock is
changed or exchanged (other than a merger which follows a Permitted Offer), or
it sells 50% or more of its assets or earning power, each Right that has not
previously been exercised or voided will entitle its holder to purchase that
number of shares of common stock of such other person which at the time of such
transaction, would have a market value of two times the Purchase Price of the
Right. The Rights expire on May 19, 2008, unless earlier redeemed by the
Company. Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including without limitation the right
to vote or receive dividends. The Rights are designed to protect stockholders of
the Company in the event of unsolicited offers to acquire the Company and other
coercive takeover tactics. The Rights may cause substantial dilution to a person
or group that attempts to acquire the Company on terms not approved by the
Board, and therefore would render an unsolicited takeover of the Company more
difficult or less likely to occur. The Rights should not, however, interfere
with any merger or other business combination approved by the Board because the
rights may generally be redeemed in connection with consensual transactions.
IRECTOR LIABILITY
The Charter contains a provision that limits the liability of the Company's
directors to the fullest extent permitted by the DGCL. The provision
eliminates the personal liability of directors to the Company and its
stockholders for monetary damages for breaches of their fiduciary duty of
care. As a result, stockholders may be unable to recover monetary damages
against directors for negligent or grossly negligent acts or omissions in
violation of their duty of care. The provision does not change the liability
of a director for breach of his duty of loyalty to the Company or to
stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for the declaration or
payment of dividends in violation of Delaware law or in respect of any
transaction from which a director received an improper personal benefit. The
Charter provides that if the DGCL is amended to further limit such liability,
then the liability of Company directors will be limited or eliminated to the
maximum extent permitted by law as so amended.
PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of Preferred Stock, of
which 500,000 shares have been designated as Series A Preferred Stock. Under
the Charter, the Board of Directors may from time to time establish and issue
one or more series of Preferred Stock and fix the designations, powers,
preferences and rights of the shares of such series and the qualifications,
limitations or restrictions thereon, including, but not limited to, dividend
rights, dividend rates, conversion rights, voting rights, rights and terms of
redemption (including
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sinking fund provisions) and liquidation preferences. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the voting power of all of the then outstanding
shares of the Capital Stock of the Company entitled to vote generally in the
election of directors (the "Voting Stock") voting together as a single class,
without a separate vote of the holders of the Preferred Stock, or any series
thereof, unless a vote of any such holders is required pursuant to any
certificate of designation relating to a series of Preferred Stock.
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. Certain other terms of a particular series of Preferred Stock will
be described in the Prospectus Supplement relating to that series. If so
indicated in the Prospectus Supplement, the terms of any such series may
differ from the terms set forth below. The description of certain provisions
of the Preferred Stock set forth below and in any Prospectus Supplement does
not purport to be complete and is subject to and qualified in its entirety by
reference to the Company's Charter and bylaws and the certificate of
designation relating to each such series of Preferred Stock, which will be
filed with the Commission in connection with the offering of such series of
Preferred Stock.
GENERAL
Subject to limitations prescribed by Delaware law and the Company's Charter
and bylaws, the Board of Directors is authorized to fix the number of shares
constituting each series of Preferred Stock and the designations, relative
rights, preferences and limitations thereof, including such provisions as may
be desired concerning voting, redemption, dividends, dissolution, the
distribution of assets, conversion or sinking funds, and such other subjects
or matters as may be fixed by resolution of the Board of Directors or a duly
authorized committee thereof. The Preferred Stock will, when issued, be fully
paid and nonassessable upon issuance against the full payment of the purchase
price therefor, and will not have, or be subject to, any preemptive or similar
rights.
Reference is made to the Prospectus Supplement relating to the series of
Preferred Stock offered thereby for specific terms, including: (i) the class
or series, title and stated value of such Preferred Stock; (ii) the number of
shares of such Preferred Stock offered, the liquidation preference per share
and the offering price of such Preferred Stock; (iii) the dividend rate(s),
period(s) and/or payment date(s) or method(s) of calculation thereof
applicable to such Preferred Stock; (iv) whether dividends on such Preferred
Stock shall be cumulative or not and, if cumulative, the date from which
dividends on such Preferred Stock shall accumulate; (v) the procedures for any
auction and remarketing, if any, for such Preferred Stock; (vi) provisions for
a sinking fund, if any, for such Preferred Stock; (vii) provisions for
redemption, if applicable, of such Preferred Stock; (viii) any listing of such
Preferred Stock on any securities exchange; (ix) the terms and conditions, if
applicable, upon which such Preferred Stock will be convertible into other
securities of the Company, including the conversion price (or manner of
calculation thereof); (x) a discussion of certain federal income tax
considerations applicable to such Preferred Stock; and (xi) any other material
terms, preferences, rights, limitations or restrictions of such Preferred
Stock.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred Stock
will, with respect to (as applicable) dividend rights and rights upon
liquidation, dissolution or winding up of the Company, rank (i) senior to all
classes or series of common stock of the Company and to all equity securities
of the Company the terms of which provide that such equity securities are
subordinated to such Preferred Stock, (ii) on a parity with all equity
securities of the Company other than those referred to in clauses (i) and
(iii) and (iii) junior to all equity securities of the Company which the terms
of such Preferred Stock provide will rank senior to it. For these purposes,
the term "equity securities" does not include convertible debt securities.
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DIVIDENDS
Holders of shares of the Preferred Stock of each series shall be entitled to
receive, when, as and if declared by the Board of Directors of the Company,
out of funds legally available therefor, cash dividends at such rates and on
such dates as will be set forth in the applicable Prospectus Supplement.
Different series of the Preferred Stock may be entitled to dividends at
different rates or based upon different methods of determination. Such rates
may be fixed or variable or both. Each such dividend shall be payable to
holders of record as they appear on the stock transfer books of the Company on
such record dates as shall be fixed by the Board of Directors of the Company
or a duly authorized committee thereof.
Dividends on any series of the Preferred Stock may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will accumulate from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company
fails to declare a dividend payable on a dividend payment date on any series
of the Preferred Stock for which dividends are noncumulative, then the holders
of such series of the Preferred Stock will have no right to receive a dividend
in respect of the dividend period ending on such dividend payment date, and
the Company will have no obligation to pay the dividend accrued for such
period, whether or not dividends on such series are declared payable on any
future dividend payment date.
If any shares of the Preferred Stock of any series are outstanding, no full
dividends shall be declared or paid or set apart for payment on any capital
stock of the Company ranking, as to dividends, on a parity with or junior to
the Preferred Stock of such series for any period, unless (i) if such series
of Preferred Stock has a cumulative dividend, full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Preferred
Stock of such series for all past dividend periods and the then current
dividend period or (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends for the then current dividend period have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Preferred
Stock of such series.
When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the shares of Preferred Stock of any series
and the shares of any other series of preferred stock ranking on a parity as
to dividends with the Preferred Stock of such series, all dividends declared
upon shares of Preferred Stock of such series and any other series of
preferred stock ranking on a parity as to dividends with such Preferred Stock
shall be declared pro rata so that the amount of dividends declared per share
on the Preferred Stock of such series and such other series of preferred stock
shall in all cases bear to each other the same ratio that accrued and unpaid
dividends per share on the shares of Preferred Stock of such series (which
shall not include any accumulation in respect of unpaid dividends for prior
dividend periods if such Preferred Stock does not have a cumulative dividend)
and such other series of preferred stock bear to each other. No interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on Preferred Stock of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for all past dividend periods and the then current
dividend period and (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set aside for payment for the then current
dividend period, no dividends (other than in shares of Common Stock or other
capital stock ranking junior to the Preferred Stock of such series as to
dividends and upon liquidation, dissolution or winding up) shall be declared
or paid or set aside for payment or other distribution shall be declared or
made upon the Common Stock, or any other capital stock of the Company ranking
junior to or on a parity with the Preferred Stock of such series as to
dividends or upon liquidation, nor shall any shares of Common Stock, or any
other capital stock of the Company ranking junior to or on a parity with the
Preferred Stock of such series as to dividends or upon liquidation,
dissolution or winding up be redeemed, purchased or otherwise acquired for
23
<PAGE>
any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such shares) by the Company (except by
conversion into or exchange for other capital stock of the Company ranking
junior to the Preferred Stock of such series as to dividends and upon
liquidation, dissolution or winding up).
REDEMPTION
The terms, if any, on which shares of a series Preferred Stock may be
subject to mandatory redemption or redemption at the option of the Company, in
whole or in part, will be set forth in the Prospectus Supplement relating to
such series.
RIGHTS UPON LIQUIDATION
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, then, before any distribution or payment shall be made to the
holders of any Common Stock, or any other series of capital stock of the
Company ranking junior to such series of Preferred Stock upon liquidation,
dissolution or winding up, the holders of each series of Preferred Stock shall
be entitled to receive out of assets of the Company legally available for
distribution to stockholders liquidating distributions in the amount of the
liquidation preference per share (set forth in the applicable Prospectus
Supplement), plus an amount equal to all accrued and unpaid dividends for the
then current dividend period and, if such series of the Preferred Stock is
cumulative, for all dividend periods prior thereto, all as set forth in the
Prospectus Supplement with respect to such shares.
VOTING RIGHTS
Holders of a series of Preferred Stock will not have any voting rights,
except as from time to time required by law or as indicated in the applicable
Prospectus Supplement; provided, that the holders of shares of any series of
Preferred Stock will not be entitled to more than one vote per share, when
voting as a class with the holders of shares of the Common Stock and if such
Preferred Stock is convertible into Common Stock, then holders can receive one
vote on an as converted basis.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock are convertible into Common Stock, Debt Securities or another
series of Preferred Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock or such other series of Preferred Stock or the principal amount
of Debt Securities into which the Preferred Stock is convertible, the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of
such series of Preferred Stock or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such series of Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Preferred Stock will be set forth
in the applicable Prospectus Supplement.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities or
Preferred Stock. Warrants may be issued independently or together with Debt
Securities or Preferred Stock offered by any Prospectus Supplement and may be
attached to or separate from such Debt Securities or Preferred Stock. Each
series of Warrants will be issued under a separate warrant agreement (a
"Warrant Agreement") to be entered into between the Company and a bank or
trust company, as Warrant Agent (the "Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of offered Warrants.
The Warrant Agent will act solely as an agent of the Company in connection
with the Warrant certificates relating to the Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders of
Warrant certificates or beneficial owners of Warrants. The following summaries
of certain provisions of the Warrant Agreements and Warrants do not purport to
be complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Warrant Agreement and the Warrant
certificates relating to each series of Warrants which will be filed with
24
<PAGE>
the Commission and incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part at or prior to the time of the
issuance of such series of Warrants.
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will describe
the terms of such Warrants, including, the following where applicable: (i) the
offering price; (ii) the denominations and terms of the series of Debt
Securities purchasable upon exercise of such Warrants and whether such Debt
Securities are Senior Debt Securities or Subordinated Debt Securities; (iii)
the designation and terms of any series of Debt Securities or shares of
Preferred Stock with which such Warrants are being offered and the number of
such Warrants being offered with each such Debt Security or shares of
Preferred Stock; (iv) the date, if any, on and after which such Warrants and
any related series of Debt Securities will be transferable separately; (v) the
principal amount of the series of Debt Securities or the aggregate number of
shares of Preferred Stock purchasable upon exercise of each such Warrant and
the price at which such principal amount of Debt Securities of such series or
shares of Preferred Stock may be purchased upon such exercise; (vi) the date
on which the right to exercise such Warrants shall commence and the date (the
"Expiration Date") on which such right shall expire; (vii) whether the
Warrants will be issued in registered or bearer form;(viii) the manner, if
any, in which the exercise price of, and the number of shares covered by, a
Warrant for Preferred Stock is subject to adjustment in certain circumstances;
(ix) any special United States Federal income tax consequences; (x) the terms,
if any, on which the Company may accelerate the date by which the Warrants
must be exercised; and (xi) any other terms of such Warrants.
Warrant certificates may be exchanged for new Warrant certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office
of the applicable Warrant Agent or any other office indicated in the
applicable Prospectus Supplement. Prior to the exercise of any Warrant to
purchase Debt Securities, holders of such Warrants will not have any of the
rights of holders of the Debt Securities purchasable upon such exercise,
including the right to receive payments of principal, premium, if any, or
interest, if any, on such Debt Securities or to enforce covenants in the
applicable Indenture. Prior to the exercise of any Warrants to purchase
Preferred Stock, holders of such Warrants will not have any rights of holders
of such Preferred Stock, including the right to receive payments of dividends,
if any, on such Preferred Stock, or to exercise any applicable right to vote.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of Debt Securities or number of shares of Preferred Stock, as the case
may be, at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the offered Warrants.
After the close of business on the Expiration Date (or such later date to
which such Expiration Date may be extended by the Company), unexercised
Warrants will become void.
Warrants may be exercised by delivering to the applicable Warrant Agent
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities or Preferred Stock purchasable upon
such exercise together with certain information set forth on the reverse side
of the Warrant certificate. Warrants will be deemed to have been exercised
upon receipt of payment of the exercise price in cash or by certified or
official bank check, subject to the receipt within five (5) business days of
the Warrant certificate evidencing such Warrants. Upon receipt of such payment
at the corporate trust office of the applicable Warrant Agent or any other
office indicated in the applicable Prospectus Supplement, the Company will, as
soon as practicable, issue and deliver the Debt Securities or Preferred Stock
purchasable upon such exercise. If fewer than all of the Warrants represented
by such Warrant certificate are exercised, a new Warrant certificate will be
issued for the remaining amount of Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
The Warrant Agreements may be amended or supplemented without the consent of
the holders of the Warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the Warrants and that do not adversely
affect the interests of the holders of the applicable Warrants.
25
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Securities in and/or outside the United States: (i)
through underwriters; (ii) through dealers acting as principal or as agent;
(iii) directly to a limited number of purchasers or to a single purchaser; or
(iv) through agents. The applicable Prospectus Supplement with respect to the
any offering of Securities will set forth the terms of the offering of the
Securities, including the name or names of any underwriters, dealers or
agents, the purchase price of the Securities and the proceeds to the Company
from such sale, any delayed delivery arrangements, any discounts or
commissions and other items constituting compensation allowed or paid to any
underwriters, dealers or agents, any aggregate initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers. Any
aggregate initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to
a particular underwritten offering of Securities will be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth
on the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the underwriters to
purchase the Securities will be subject to conditions precedent, and the
underwriters will be obligated to purchase all the Securities if any are
purchased.
If dealers are utilized in the sale of Securities in respect of which this
Prospectus is delivered, the Company will sell such Securities to the dealers
acting as principals or agents. The dealers may then resell such Securities to
the public at varying prices to be determined by such dealers at the time of
resale. The terms of the transaction will be set forth in the Prospectus
Supplement relating thereto to the extent required by the Securities Act.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of the Securities in respect to which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will
be set forth, in the Prospectus Supplement relating thereto to the extent
required by the Securities Act. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment.
The Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning
of the Securities Act with respect to any resale thereof. The terms of any
such sales, including the terms of any bidding or auction process, will be
described in the Prospectus Supplement relating thereto.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers from certain types
of institutions to purchase Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in
the applicable Prospectus Supplement, and the Prospectus Supplement will set
forth the commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business or otherwise.
26
<PAGE>
Each series of Securities, other than the Common Stock, will be a new issue
with no established trading market. The Common Stock is listed on the New York
Stock Exchange. Any Common Stock issued upon conversion of a Security sold
pursuant to a Prospectus Supplement will be listed on such exchange, subject
to official notice of issuance. The Company may elect to list any series of
Debt Securities, Preferred Stock or Warrants on an exchange, but is not
obligated to do so. If so indicated in the applicable Prospectus Supplement,
any underwriters or agents to or through whom Securities are sold by the
Company may make a market in such Securities, but such underwriters or agents
will not be obligated to do so and may discontinue any market making at any
time without notice. No assurance can be given as to the liquidity of the
trading market for any Securities.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by King &
Spalding, Atlanta, Georgia, and for the underwriters, dealers or other agents
by Cravath, Swaine & Moore, New York, New York.
EXPERTS
The financial statements and schedules incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of National Service Industries,
Inc. for the year ended August 31, 1997 have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of
said firm as experts in giving said reports.
27
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An itemized statement of the estimated amount of all expenses in connection
with the distribution of the securities registered hereby, all of which will
be paid by the Company, is as follows:
<TABLE>
<CAPTION>
Registration fee...................................................... $118,000
<S> <C>
Blue Sky fees and expenses............................................ 15,000
Printing and engraving expenses....................................... 40,000
Legal fees and expenses............................................... 170,000
Accounting fees and expenses.......................................... 165,000
Rating agencies' fees and expenses.................................... 355,000
Trustee's and registrar's fees........................................ 8,000
Miscellaneous fees and expenses....................................... 29,000
--------
Total............................................................... $900,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("Section 145")
generally provides that a director or officer of a corporation: (i) shall be
indemnified by the corporation for expenses in defense of any action or
proceeding in connection with his service to the corporation, if he is
successful in defense of the claims made against him; (ii) may, in actions
other than "derivative" and similar actions, be indemnified for expenses,
judgments and settlements even if he is not successful on the merits, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation (and in a criminal
proceeding, if he had no reasonable cause go believe his conduct was
unlawful); and (iii) may be indemnified by the corporation for expenses (but
not judgments or settlements) incurred to defend or settle any action by the
corporation or a derivative action (such as a suit by a shareholder alleging a
breach by the director or officer of a duty owed to the corporation), even if
he is not successful, provided that he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, provided that no indemnification is permitted without court
approval if the individual was found to be liable to the corporation. Before
the permissive indemnification described in clauses (ii) and (iii) above may
be made pursuant to Section 145, either (i) a majority of disinterested
directors, (ii) a committee of one or more disinterested directors designated
by a majority of disinterested directors, (iii) the stockholders, or (iv)
under certain circumstances, independent legal counsel in a written opinion,
must determine that indemnification is appropriate in the circumstances
because the applicable standards of conduct have been met.
Delaware law permits the advancement of expenses incurred by a proposed
indemnitee by the corporation in advance of final disposition of the action
provided the indemnitee undertakes to repay such advanced expenses if it is
ultimately determined that he is not entitled to indemnification. The
corporation may purchase insurance on behalf of an indemnitee against any
liability asserted against him in his designated capacity, whether or not the
corporation itself would be empowered to indemnify him against such liability.
Delaware law also provides that the above rights will not be deemed
exclusive of other rights of indemnification or advancement of expenses
granted by by-law, agreement, vote of stockholders or disinterested directors
or otherwise, as to action in an indemnitee's official capacity and as to
action in another capacity while holding such office. The registrant's
Certificate of Incorporation and By-laws provide such additional rights.
II-1
<PAGE>
Article Fifteenth of the registrant's Certificate of Incorporation, which
provides contractual indemnification rights, was initially approved by the
registrant's stockholders in 1987. It provides for mandatory indemnification
of directors and officers to the full extent now authorized by the Delaware
General Corporation Law (as described above) or to the further extent
indemnification under the Delaware General Corporation Law is broadened in the
future. Article Fifteenth also mandates advancement of expenses incurred by a
proposed indemnitee, provided that, as long as Delaware law so requires, an
undertaking to repay (as described above) is delivered to the registrant.
Article Fifteenth permits persons indemnified thereunder to bring suit
against the registrant to recover unpaid amounts claimed thereunder, with the
expense of bringing a successful suit to be paid by the registrant. Article
Fifteenth also provides that rights conferred therein are nonexclusive and
that the registrant may maintain insurance to protect a director or officer
against any expense, liability, or loss, whether or not the registrant had the
power under the Delaware General Corporation Law to indemnify such person
against that expense, liability, or loss.
Section 7.8 of the registrant's By-laws provides rights to indemnification
with respect to conduct on or before January 5, 1987, when Article Fifteenth
was initially adopted. Section 7.8 provides indemnification rights which are
similar to, but somewhat narrower than, the rights extended by Article
Fifteenth.
The registrant's directors and officers are insured against losses arising
from any claim against them in such capacities for wrongful acts or omissions,
subject to certain limitations.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <C> <S>
*1.1 -- Form of Underwriting Agreement between the Company and the
Underwriter(s) with respect to Debt Securities.
*1.2 -- Form of Underwriting Agreement between the Company and the
Underwriter(s) with respect to the Preferred Stock.
**1.3 -- Form of Agency Agreement.
**1.4 -- Form of Distribution Agreement.
*4.1 -- Form of Indenture as of , 1998, between the Company and
SunTrust Bank, Atlanta, as trustee (the "Senior Indenture"),
with respect to Senior Debt Securities.
*4.2 -- Form of Indenture dated as of , 1998 between the Company and
SunTrust Bank, Atlanta, as trustee (the "Subordinated
Indenture"), with respect to Subordinated Debt Securities.
The Company agrees to furnish to the Commission upon request a
copy of each instrument with respect to issues of such notes of
the Company, the authorized principal amount of which does not
exceed 10% of the consolidated assets of the Company and its
subsidiaries.
**4.3 -- Form of Designating Amendment for Preferred Stock.
**4.4 -- Form of Warrant Agreement between the Company and the Warrant
Agent.
**5.1 -- Opinion of legal counsel regarding legality of securities being
registered.
*12.1 -- Computation of Ratio of Earnings to Fixed Charges.
*23.1 -- Consent of Arthur Andersen LLP.
**23.2 -- Consent of legal counsel (included in Exhibit 5.1).
*24.1 -- Power of Attorney (included in Part II of the Registration
Statement).
*25.1 -- Statement of Eligibility of Trustee on Form T-1 for Senior Debt
Securities.
*25.2 -- Statement of Eligibility of Trustee on Form T-1 for Subordinated
Debt Securities.
</TABLE>
- --------
*Filed herewith.
** To be filed either by amendment or as an exhibit to a report of the Company
filed pursuant to the Exchange Act and incorporated herein by reference.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act.
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The undersigned registrant hereby undertakes that:
(1) For the purpose of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability Under the Securities Act,
each post- effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions in Item 15 above, or otherwise, the
II-3
<PAGE>
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia on July 22, 1998.
National Service Industries, Inc.
/s/ James S. Balloun
By___________________________________
JAMES S. BALLOUN
CHAIRMAN OF THE BOARD, PRESIDENT
AND
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
We the undersigned, directors and officers of National Service Industries,
Inc. (the "Company"), do hereby severally constitute and appoint David Levy
and Brock Hattox and each or any of them, our true and lawful attorneys-in-
fact and agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and
all amendments or post-effective amendments or supplements to this
Registration Statement and any Registration Statement relating to any offering
made pursuant to this Registration Statement that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file
the same with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys and agents, and each or any of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, and each
of them, or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
/s/ James S. Balloun Chairman of the July 13, 1998
- ------------------------------------- Board, President
(JAMES S. BALLOUN) and Chief Executive
Officer (Principal
Executive Officer)
/s/ Brock Hattox Executive Vice July 22, 1998
- ------------------------------------- President and Chief
(BROCK HATTOX) Financial Officer
(Principal
Financial Officer)
/s/ Mark Bachmann Vice President and July 22, 1998
- ------------------------------------- Controller
(MARK BACHMANN) (Principal
Accounting Officer)
/s/ John L. Clendenin Director July 22, 1998
- -------------------------------------
(JOHN L. CLENDENIN)
II-5
<PAGE>
/s/ Thomas C. Gallagher Director July 13, 1998
- -------------------------------------
(THOMAS C. GALLAGHER)
/s/ Robert M. Holder, Jr. Director July 22, 1998
- -------------------------------------
(ROBERT M. HOLDER, JR.)
/s/ James C. Kennedy Director July 22, 1998
- -------------------------------------
(JAMES C. KENNEDY)
/s/ David Levy Director July 22, 1998
- -------------------------------------
(DAVID LEVY)
/s/ Bernard Marcus Director July 22, 1998
- -------------------------------------
(BERNARD MARCUS)
/s/ John G. Medlin, Jr. Director July 22, 1998
- -------------------------------------
(JOHN G. MEDLIN, JR.)
/s/ Samuel A. Nunn Director July 22, 1998
- -------------------------------------
(SAMUEL A. NUNN)
/s/ Herman J. Russell Director July 22, 1998
- -------------------------------------
(HERMAN J. RUSSELL)
/s/ Betty L. Siegel Director July 13, 1998
- -------------------------------------
(BETTY L. SIEGEL)
/s/ Barrie A. Wigmore Director July 14, 1998
- -------------------------------------
(BARRIE A. WIGMORE)
II-6
<PAGE>
EXHIBIT 1.1
National Service Industries, Inc.
% [Debentures/Notes Due]
Underwriting Agreement
New York, New York
[date]
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
National Service Industries, Inc., a Delaware corporation (the
"Company"), proposes to sell to the several underwriters named in Schedule II
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities identified in Schedule I
hereto (the "Securities"), to be issued under an indenture (the "Indenture")
dated as of , between the Company and SunTrust Bank, Atlanta, as
trustee (the "Trustee"). To the extent there are no additional Underwriters
listed on Schedule I other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. 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 Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may 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 or to information set forth or
included therein after the Effective Date of the Registration Statement, or the
issue date of the Basic Prospectus any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by reference.
[The Securities are convertible into shares of Common Stock, $1.00 par value, of
the Company (the "Common Stock").] Certain terms used herein are defined in
Section 17 hereof.
1. Representations and Warranties. The Company represents and
-------------------------------
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under
the Act and has prepared and filed with the Commission a registration
statement (the file number of which is set forth in Schedule I hereto) on
Form S-3, including a related basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company may
<PAGE>
have filed one or more amendments thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to you. The Company
will next file with the Commission one of the following: (1) after the
Effective Date of such registration statement, a final prospectus
supplement relating to the Securities in accordance with Rules 430A and
424(b), (2) prior to the Effective Date of such registration statement, an
amendment to such registration statement (including the form of final
prospectus supplement) or (3) a final prospectus in accordance with Rules
415 and 424(b). In the case of clause (1), the Company has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Final
Prospectus. As filed, such final prospectus supplement or such amendment
and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, and, except
to the extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein. The Registration Statement, at the
Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein),
the Final Prospectus (and any supplements thereto) will, comply in all
material respects with the applicable requirements of the Act, the Exchange
Act and the Trust Indenture Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did
not or will not 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; on the Effective Date and on
the Closing Date, the Indenture did or will comply in all material respects
with the applicable requirements of the Trust Indenture Act and the rules
thereunder; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date, the Final Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, 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 and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement, or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished herein or in writing to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto).
(c) Each of the Company and each subsidiary listed on Schedule
III (which are all the significant subsidiaries as defined in Rule 1-02 to
Regulation S-X of the Commission (the "Significant Subsidiaries")) has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and
2
<PAGE>
to operate its properties and conduct its business as described in the
Final Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse
effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(d) All the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in the
Final Prospectus, all outstanding shares of capital stock of the
Significant Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected security
interest or any other security interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Final Prospectus; the Securities [and the Common Stock]
conform[s] in all material respects to the description thereof contained in
the Final Prospectus; the outstanding shares of Common Stock have been duly
and validly authorized and issued and are fully paid and nonassessable;
[the Securities [and the shares of Common Stock issuable upon conversion of
the Securities] are duly listed, and admitted and authorized for trading
subject to official notice of issuance [and evidence of satisfactory
distribution] on the ,]; [the shares of Common Stock initially
issuable upon conversion of the Securities have been duly and validly
authorized and reserved for issuance upon such conversion and, when issued
upon conversion, will be validly issued, fully paid and nonassessable];
the Indenture has been duly authorized, executed and delivered, has been
duly qualified under the Trust Indenture Act and constitutes a legal, valid
and binding instrument, enforceable against the Company in accordance with
its terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law); and the Securities
have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid
for by the Underwriters in accordance with the terms of this Agreement,
will constitute legal, valid and binding obligations of the Company
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law) entitled to the
benefits of the Indenture;
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required[; and the statements in the Final Prospectus under the
heading "Tax Matters" and, " " fairly summarize the matters therein
described].
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company enforceable in accordance with its terms(subject to applicable
bankruptcy, insolvency, reorganization,
3
<PAGE>
moratorium, creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law).
(h) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and the Trust Indenture Act, and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Final Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Significant Subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or any
of its Significant Subsidiaries is a party or bound or to which its or
their property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
Significant Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its Significant Subsidiaries or any
of its or their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which have
not been waived.
(l) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in the
Final Prospectus and the Registration Statement present fairly in all
material respects the financial condition, results of operations and cash
flows of the Company as of the dates and for the periods indicated, comply
as to form with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under the
caption "Selected Financial Information" in the Final Prospectus and
Registration Statement fairly present, on the basis stated in the Final
Prospectus and the Registration Statement, the information included
therein. [The pro forma financial statements included in the Final
Prospectus and the Registration Statement include assumptions that provide
a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related
pro forma adjustments give appropriate effect to those assumptions, and the
pro forma adjustments reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma financial
statements included in the Final Prospectus and the Registration Statement.
The pro forma financial statements included in the Final
4
<PAGE>
Prospectus and the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X
under the Act and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements.]
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse
effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(n) Each of the Company and each of its subsidiaries owns or
leases all such properties as are necessary to the conduct of its
operations as presently conducted, except to the extent that the failure to
own or lease such properties would not have a material adverse effect on
the financial condition, prospective financial condition, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(o) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or
such subsidiary or any of its properties, as applicable, except in the case
of (ii) and (iii) such as would not reasonably be expected to have a
material adverse effect on the financial condition, prospective financial
condition, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(p) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Final Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(q) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have
a material adverse effect on the financial condition, prospective financial
condition, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus
5
<PAGE>
(exclusive of any supplement thereto)) and has paid all taxes required to
be paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for any
such assessment, fine or penalty that is currently being contested in good
faith or as would not have a material adverse effect on the financial
condition, prospective financial condition, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(r) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or to the knowledge
of the Company is threatened or imminent, and the Company is not aware of
any existing or imminent labor disturbance affecting it or any subsidiary
that would have a material adverse effect on the financial condition,
prospective financial condition, earnings, business, or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(s) The Company and each of its subsidiaries are insured, which
may include self-insurance, in such amounts as are reasonable and in
accordance with sound industry practice taking into account the nature of
their respective businesses, on all of their respective properties in at
least such amounts and against at least such risks as are usually insured
against in the same geographic area by companies of established repute
engaged in the same or similar business; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its subsidiaries or
their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; and there are no material claims by the Company or any of its
subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights
clause; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a material adverse effect on the financial condition,
prospective financial condition, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(t) No subsidiary organized under the laws of any State in the
United States of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Final Prospectus.
(u) The Company and its subsidiaries possess all material
licenses, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the
6
<PAGE>
Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material
adverse effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any material differences.
(w) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(x) The Company and its subsidiaries are (i) in material
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
and (iii) have not received notice of any actual or potential liability for
the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a material adverse change in the financial
condition, prospective financial condition, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto). Except as set forth in the Final Prospectus, neither
the Company nor any of the subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(y) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the financial
condition, prospective financial condition,
7
<PAGE>
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(z) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of
the United States Employee Retirement Income Security Act of 1974 ("ERISA")
and the regulations and published interpretations thereunder with respect
to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and its
subsidiaries are eligible to participate and each such plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations.
The Company and its subsidiaries have not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title
IV of ERISA.
(aa) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of
the Company's business in all material respects as now conducted or as
proposed in the Final Prospectus to be conducted.
(bb) Except as disclosed in the Registered Statement and the
Final Prospectus, the Company (i) does not have any material lending or
other relationship with any bank or lending affiliate of the Underwriters
and (ii) does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any affiliate of
the Underwriters.
(cc) The Company and its subsidiaries are implementing a
comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem"), and
reasonably believes that such risk will be remedied on a timely basis
without material expense and will not have a material adverse effect upon
the financial condition and results of operations of the Company and its
subsidiaries, taken as a whole; and the Company has taken reasonable steps
to provide reasonable assurances that each supplier, vendor, customer or
financial service organization used or serviced by the Company and its
subsidiaries has remedied or will remedy on a timely basis the Year 2000
Problem, except to the extent that a failure to remedy by any such
supplier, vendor, customer or financial service organization would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole. The Company is in compliance with the Commissions staff legal
bulletin No. 5 dated January 12, 1998 related to Year 2000 compliance, as
amended to date.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
8
<PAGE>
2. Purchase and Sale. Subject to the terms and conditions and
-----------------
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, 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.
3. Delivery and Payment. Delivery of and payment for the
--------------------
Securities shall be made on the date and at the time specified in Schedule I
hereto or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, 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 Securities being herein called the "Closing Date"). Delivery of the
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 by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. Offering by Underwriters. It is understood that the several
-------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Agreements. The Company agrees with the several
----------
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Final Prospectus is otherwise
required under Rule 424(b), the Company will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise the
Representatives (1) when the Registration Statement, if not effective at
the Execution Time, and any amendment thereto, shall have become effective,
(2) when the Final Prospectus, and any supplement thereto, shall have been
filed (if required) with the Commission pursuant to Rule 424(b) or when any
Rule 462(b) Registration Statement shall have been filed with the
Commission,(3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective,(4) of any request by the Commission or its staff
for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Final Prospectus or
for any additional information,(5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose and (6)
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 institution or threatening of any proceeding for such
purpose. The Company will use its
9
<PAGE>
best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (1) notify the Representatives of such event; (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance; and (3)
supply any supplemented Final Prospectus to you in such quantities as you
may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives may reasonably
request. The Company will pay the expenses of printing or other production
of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities [and will pay
any fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering]; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where it
is not now so subject.
(f) Until the Business Day set forth on Schedule I hereto, the
Company will not, without the prior written consent of , offer,
sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or
any affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, or announce the
offering of any debt securities issued or guaranteed by the Company (other
than the Securities).
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the
10
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Exchange Act or otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
6. Conditions to the Obligations of the Underwriters. The
--------------------------------------------------
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company shall have caused King & Spalding, counsel for the
Company, to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Company and National Service Industries, Inc., a
Georgia corporation, NSI Enterprises, Inc., a California corporation,
and Zep Manufacturing Company, a Delaware company (individually a
"Subsidiary" and collectively the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the financial
condition, prospective financial condition, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto);
(ii) all the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Final Prospectus, all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance;
11
<PAGE>
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; the Securities [and the Common Stock]
conform[s] in all material respects to the description thereof
contained in the Final Prospectus; [the Securities [and the shares of
Common Stock issuable upon conversion of the Securities] are duly
listed, and admitted and authorized for trading subject to official
notice of issuance [and evidence of satisfactory distribution] on the
,]; [the shares of Common Stock initially issuable upon
conversion of the Securities have been duly and validly authorized and
reserved for issuance upon such conversion and, when issued upon
conversion, will be validly issued, fully paid and nonassessable];
(iv) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable against
the Company in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect); and the Securities have been duly authorized
and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture;
(v) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as
required[; and the statements included or incorporated by reference in
the Final Prospectus under the heading[s] "Tax Matters", " " and
" " fairly summarize the matters therein described];
(vi) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe that on the
Effective Date or at the Execution Time the Registration Statement
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Final Prospectus as
of its date and on the Closing Date included or includes any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in
12
<PAGE>
each case, other than the financial statements and other financial
information contained therein, as to which such counsel need express
no opinion);
(vii) this Agreement has been duly authorized, executed and
delivered by the Company (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, creditors' rights generally
from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law);
(viii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Prospectus, will not be, an
"investment company" as defined in the Investment Company Act of 1940,
as amended;
(ix) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and in the
Final Prospectus and such other approvals (specified in such opinion)
as have been obtained;
(x) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its subsidiaries pursuant to, (i) the charter
or by-laws of the Company or its subsidiaries, (ii) to the knowledge
of such counsel, the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or its subsidiaries is a party or bound or to which its or
their property is subject, or (iii) to the knowledge of such counsel,
any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or its subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or its subsidiaries or
any of its or their properties; and
(xi) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which
have not been waived.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Delaware or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials and, (C) as to such matters as are acceptable
to the Representatives, upon the
13
<PAGE>
opinion of counsel, who may be an employee of the Company. References to
the Final Prospectus in this paragraph (b) include any supplements thereto
at the Closing Date.
(c) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration
Statement, the Final Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board, the
President or any Executive Vice President and the Treasurer or the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any supplements
to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on 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;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no material
adverse effect on the financial condition, prospective financial
condition, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(e) The Company shall have caused Arthur Andersen LLP to have
furnished to the Representatives, at the Execution Time and at the Closing
Date, letters, (which may refer to letters previously delivered to one or
more of the Representatives), dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and that they have performed a
review of the unaudited interim financial information of the Company for
the -month period ended , and as at , in accordance
with Statement on Auditing Standards No. 71 and stating in effect except as
provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and
financial statement schedules [and pro forma financial statements]
included or incorporated by reference in the Registration Statement
and the Final Prospectus and reported on
14
<PAGE>
by them comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for the -month period ended and
as at [as indicated in their report dated incorporated by
reference in the Registration Statement and the Final Prospectus];
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and [the executive, audit and
finance committees, if any] of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to ,
nothing came to their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Final Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act and
with the published rules and regulations of the Commission with
respect to financial statements included or incorporated by
reference in quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus;
(2) with respect to the period subsequent to ,
there were any changes, at a specified date not more than five
days prior to the date of the letter, in the long-term debt of
the Company and its subsidiaries or capital stock of the Company
or decreases in the stockholders' equity of the Company or
decreases in working capital of the Company and its subsidiaries
as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Final Prospectus, or for
the period from to such specified date there were any
decreases, as compared with the corresponding period in the
preceding year or, the corresponding period in the preceding
quarter, in net income before income taxes or in total or per
share amounts of net income of the Company and its subsidiaries,
except in all instances for changes or decreases set forth in
such letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives;
(3) the information included or incorporated by reference in
the Registration Statement and Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial
15
<PAGE>
Information), Item 402 (Executive Compensation) and Item 503(d)
(Ratio of Earnings to Fixed Charges) is not in conformity with
the applicable disclosure requirements of Regulation S-K; or
(4) the unaudited amounts of [describe the capsule
information and its location] do not agree with the amounts set
forth in the unaudited financial statements for the same periods
or were not determined on a basis substantially consistent with
that of the corresponding amounts in the audited financial
statements included or incorporated by reference in the
Registration Statement and the Final Prospectus; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement, including the information
set forth under the captions " " and " " in the Final Prospectus, the
information included or incorporated by reference in Items 1, 2, 6, 7
and 11 of the Company's Annual Report on Form 10-K, incorporated by
reference in the Registration Statement and the Final Prospectus, and
the information included in the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q, incorporated by reference in the Registration Statement and the
Final Prospectus, agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal interpretation;
and
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus (the "pro forma
financial statements"); carrying out certain specified procedures;
inquiries of certain officials of the Company [and [insert name of
acquired company, if appropriate]] who have responsibility for
financial and accounting matters; and proving the arithmetic accuracy
of the application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to their
attention which caused them to believe that the pro forma financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (e) include
any supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of
any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), earnings,
business or properties of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions
16
<PAGE>
in the ordinary course of business, except as set forth in or contemplated
in the Final Prospectus (exclusive of any supplement thereto) the effect of
which, in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto).
(g) Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
[(h) The Securities shall have been listed and admitted and
authorized for trading on the , and satisfactory evidence of such
actions shall have been provided to the Representatives.]
(i) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further information, certificates and documents
as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, NY 10019, on the
Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through [ ] on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
---------------------------------
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law 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
17
<PAGE>
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus, or in any amendment thereof 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 agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, 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 any such 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 inclusion therein;
provided further, that with respect to any untrue statement or omission of
- ----------------
material fact made in any Preliminary Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage or liability
purchased the securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Company had previously furnished copies of
the Prospectus to the Representatives, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, 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 the Representatives
specifically for inclusion in 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 regarding delivery of the
Securities, the legend in block capital letters on page [2] related to
stabilization, syndicate covering transactions and penalty bids and, under the
heading "Underwriting" or "Plan of Distribution", (i) the sentences related to
concessions and reallowances and (ii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids] in any Preliminary Final
Prospectus and the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 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 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided
18
<PAGE>
in paragraph (a) or (b) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
- -------- -------
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, 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 additional to those available to the indemnifying party, (iii) 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 the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that 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
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation
19
<PAGE>
or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 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
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the 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 the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. 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, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule II hereto bears to the
aggregate principal amount of Securities set forth 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 principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal 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
five Business 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.
10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Prospectus (exclusive of
any supplement thereto).
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the 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 or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will
20
<PAGE>
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the General Counsel and confirmed to the General
Counsel, at the address specified in Schedule I hereto, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
(404) 853-1330 and confirmed to it at 1420 Peachtree Street, N.E., Atlanta, GA
50309-3002, attention of the General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
-------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
--------
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
------------
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph
1(a) above contained in the Registration Statement at the Effective Date
including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City or Atlanta,
Georgia.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
21
<PAGE>
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415","Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
National Service Industries, Inc.
By: __________________________
Name:
Title:
22
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the
date specified in
Schedule I hereto.
and
By:
By: ______________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
23
<PAGE>
SCHEDULE I
Underwriting Agreement dated
Registration Statement No.
Representative(s):
Title, Purchase Price and Description of Securities:
Title: % [Debentures/Notes Due]
Principal amount:
Purchase price (include accrued
interest or amortization, if
any):
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Type of Offering: Non-delayed
Date referred to in Section 5(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s):
Modification of items to be covered by the letter from Arthur Andersen LLP
delivered pursuant to Section 6(e) at the Execution Time:
Notices to Underwriters pursuant to Section 12:
24
<PAGE>
SCHEDULE II
UNDERWRITERS PRINCIPAL AMOUNT
- ------------ OF SECURITIES TO
BE PURCHASED
--------------
......................... $
____________________
Total.................... $
============
25
<PAGE>
SCHEDULE III
Significant Subsidiaries
26
<PAGE>
EXHIBIT 1.2
National Service Industries, Inc.
[$ ] [Preferred/Common Stock]
($ par value)
Underwriting Agreement
New York, New York
[date]
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
National Service Industries, Inc., a Delaware corporation (the
"Company"), proposes to sell to the several underwriters named in Schedule II
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, [$] Preferred/Common] Stock, of the Company (the "Securities").
To the extent there are no additional Underwriters listed on Schedule I other
than you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters shall mean either
the singular or plural as the context requires. 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 Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may 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 or to information set forth or included
therein after the Effective Date of the Registration Statement, or the issue
date of the Basic Prospectus any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by reference.
[The Securities are convertible into shares of Common Stock, $1.00 par value, of
the Company (the "Common Stock").] Certain terms used herein are defined in
Section 17 hereof.
1. Representations and Warranties. The Company represents and
------------------------------
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(the file number of which is set forth in Schedule I hereto) on Form S-3,
including a related basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or more
amendments thereto, including a Preliminary Final Prospectus, each of which
has previously been furnished to you. The Company will next file with the
Commission one of the following: (1) after the Effective Date of such
registration statement,
<PAGE>
a final prospectus supplement relating to the Securities in accordance with
Rules 430A and 424(b), (2) prior to the Effective Date of such registration
statement, an amendment to such registration statement (including the form
of final prospectus supplement) or (3) a final prospectus in accordance
with Rules 415 and 424(b). In the case of clause (1), the Company has
included in such registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and the
Final Prospectus. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. The Registration
Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein), the Final
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and
the respective rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did not or will not 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; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date, the Final Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
-------- -------
representations or warranties as to the information contained in or omitted
from the Registration Statement, or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
herein or in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) Each of the Company and each subsidiary listed on Schedule III
(which are all the significant subsidiaries as defined in Rule 1-02 to
Regulation S-X of the Commission (the "Significant Subsidiaries")) has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Final Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse
effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
2
<PAGE>
(d) All the outstanding shares of capital stock of each Significant
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the Final
Prospectus, all outstanding shares of capital stock of the Significant
Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set forth in
the Final Prospectus; the Securities [and the Common Stock] conform[s] in
all material respects to the description thereof contained in the Final
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities [and the shares of Common Stock issuable upon conversion of the
Securities] are duly listed, and admitted and authorized for trading
subject to official notice of issuance [and evidence of satisfactory
distribution] on the ,]: [the shares of Common Stock initially issuable
upon conversion of the Securities] have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters pursuant
to this Agreement, will be fully paid and nonassessable; the Securities are
duly listed, and admitted and authorized for trading, subject to official
notice of issuance and evidence of satisfactory distribution, on the New
York Stock Exchange; the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Final Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are
outstanding;
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required[; and the statements in the Final Prospectus under the heading
"Tax Matters" and, " " fairly summarize the matters therein described].
(g) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, creditors' rights
generally from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether considered in a
proceeding in equity or at law).
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in the
Final Prospectus.
3
<PAGE>
(j) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its Significant Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any of its subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its Significant
Subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its Significant Subsidiaries of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any
of its Significant Subsidiaries or any of its or their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which have
not been waived.
(l) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included in the Final
Prospectus and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of
the Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under the
caption "Selected Financial Information" in the Final Prospectus and
Registration Statement fairly present, on the basis stated in the Final
Prospectus and the Registration Statement, the information included
therein. [The pro forma financial statements included in the Final
Prospectus and the Registration Statement include assumptions that provide
a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related
pro forma adjustments give appropriate effect to those assumptions, and the
pro forma adjustments reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma financial
statements included in the Final Prospectus and the Registration Statement.
The pro forma financial statements included in the Final Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act and the
pro forma adjustments have been properly applied to the historical amounts
in the compilation of those statements.]
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse
effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(n) Each of the Company and each of its subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted, except to the extent that the failure to own or lease
such properties would not have a material adverse
4
<PAGE>
effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(o) Neither the Company nor any subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable, except in the case of
(ii) and (iii) such as would not reasonably be expected to have a material
adverse effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(p) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Final Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(r) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the financial condition, prospective financial
condition, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto)) and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due
and payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have a material
adverse effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(s) No labor problem or dispute with the employees of the Company or
any of its subsidiaries exists or to the knowledge of the Company is
threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance affecting it or any subsidiary that would have a
material adverse effect on the financial condition, prospective financial
condition, earnings, business, or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business,
5
<PAGE>
except as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(t) The Company and each of its subsidiaries are insured, which may
include self-insurance, in such amounts as are reasonable and in accordance with
sound industry practice taking into account the nature of their respective
businesses, on all of their respective properties in at least such amounts and
against at least such risks as are usually insured against in the same
geographic area by companies of established repute engaged in the same or
similar business; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect; the
Company and its subsidiaries are in compliance with the terms of such policies
and instruments in all material respects; and there are no material claims by
the Company or any of its subsidiaries under any such policy or instrument as to
which any insurance company is denying liability or defending under a
reservation of rights clause; and neither the Company nor any such subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a material adverse effect on the financial condition,
prospective financial condition, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(u) No subsidiary organized under the laws of any State in the United
States of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary of the
Company, except as described in or contemplated by the Final Prospectus .
(v) The Company and its subsidiaries possess all material licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the financial condition, prospective financial
condition, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(w) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
material differences.
6
<PAGE>
(x) The Company has not taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(y) The Company and its subsidiaries are (i) in material compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have a
material adverse change in the financial condition, prospective financial
condition, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto). Except as set forth in the
Final Prospectus, neither the Company nor any of the subsidiaries has been named
as a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(z) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a material adverse effect on the financial
condition, prospective financial condition, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(aa) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of the
United States Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its subsidiaries are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. The Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(bb) The Company and its subsidiaries own, possess, license or have
other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual
7
<PAGE>
Property") necessary for the conduct of the Company's business in all
material respects as now conducted or as proposed in the Final Prospectus
to be conducted.
(cc) Except as disclosed in the Registered Statement and the Final
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of the Underwriters and
(ii) does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any affiliate of
the Underwriters.
(dd) The Company and its subsidiaries are implementing a
comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem"), and
reasonably believes that such risk will be remedied on a timely basis
without material expense and will not have a material adverse effect upon
the financial condition and results of operations of the Company and its
subsidiaries, taken as a whole; and the Company has taken reasonably steps
to provide reasonable assurances that each supplier, vendor, customer or
financial service organization used or serviced by the Company and its
subsidiaries has remedied or will remedy on a timely basis the Year 2000
Problem, except to the extent that a failure to remedy by any such
supplier, vendor, customer or financial service organization would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole. The Company is in compliance with the Commissions staff legal
bulletin No. 5 dated January 12, 1998 related to Year 2000 compliance, as
amended to date.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in
------------------
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $ per
share, [plus accrued dividends, if any, with respect to Securities from ,
19 , to the Closing Date,] the amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
---------------------
shall be made on the date and at the time specified in Schedule I hereto or at
such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, 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
Securities being herein called the "Closing Date"). Delivery of the 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 by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Securities shall be made through the facilities
of The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. Offering by Underwriters. It is understood that the several
-------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
8
<PAGE>
5. Agreements. The Company agrees with the several Underwriters that:
----------
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereof, to
become effective. Prior to the termination of the offering of the Securities,
the Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final Prospectus)
to the Basic Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Final Prospectus is
otherwise required under Rule 424(b), the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the Representatives
of such timely filing. The Company will promptly advise the Representatives (1)
when the Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (2) when the Final Prospectus,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission,(3) when, prior to
termination of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective,(4) of any request by the
Commission or its staff for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or for any supplement to the Final
Prospectus or for any additional information,(5) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
and (6) 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 institution or threatening of any proceeding for that purpose and (6) 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
institution or threatening of any proceeding for such purpose. The Company will
use its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Final Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration Statement
or supplement the Final Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1) notify the
Representatives of such event; (2) prepare and file with the Commission, subject
to the second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance; and (3) supply any supplemented Final Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits
9
<PAGE>
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary Final
Prospectus and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the expenses
of printing or other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities [and will pay
any fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering]; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where it
is not now so subject.
(f) Until the Business Day set forth on Schedule I hereto, the
Company will not, without the prior written consent of , offer, sell or
contract to sell, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, or announce the offering
of, any (i) other shares of [Preferred/Common] Stock or any securities
convertible into, or exchangeable for, shares of [Preferred/Common] Stock,
[(ii) debt securities issued or guaranteed by the Company or (iii) shares
of any class of Capital Stock of the Company (other than the Securities)
which is preferred as to the payment of dividends, or as to the
distribution of assets upon any liquidation or dissolution of the Company,
over shares of any other class of capital stock of the Company]; provided,
however, that the Company may issue and sell [Preferred/Common] Stock
pursuant to any long-term incentive plan, stock purchase plan, stock
ownership plan, rights agreement or dividend reinvestment plan of the
Company in effect at the Execution Time and the Company may issue
[Preferred/Common] Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred
10
<PAGE>
after 3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b),
the Final Prospectus, and any such supplement, will be filed in the manner
and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have caused King & Spalding, counsel for the
Company, to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Company and National Service Industries, Inc.,
a Georgia corporation, NSI Enterprises, Inc., a California corporation
and Zep Manufacturing Company, a Delaware company (individually a
"Subsidiary" and collectively the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the financial
condition, prospective financial condition, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto);
(ii) all the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Final Prospectus, all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; the Securities [and the Common Stock]
conform[s] in all material respects to the description thereof
contained in the Final Prospectus; [the Securities [and the shares of
Common Stock issuable upon conversion of the Securities] are duly
listed, and admitted and authorized for trading subject to official
notice of issuance [and evidence of satisfactory distribution] on the
,]; [the shares of Common Stock initially issuable upon conversion of
the Securities have been duly and validly authorized and reserved for
issuance upon such conversion and, when issued upon conversion, will
be validly issued, fully paid and nonassessable]; the Securities [and
the shares of Common Stock issuable upon conversion of the Securities]
have been duly and validly authorized, and, when issued and delivered
to and paid for by the Underwriters pursuant to this Agreement, will
be fully paid and nonassessable; the certificates for the Securities
are in valid and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities; and, except as set forth in
the Final Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any
11
<PAGE>
securities for, shares of capital stock of or ownership interests in
the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as
required; [and the statements included or incorporated by reference in
the Final Prospectus under the heading[s] "Tax Matters", " " and
" " fairly summarize the matters therein described;
(v) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the respective rules thereunder; and such counsel has
no reason to believe that on the Effective Date or at the Execution
Time the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Final Prospectus as of its date and on the
Closing Date included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make
the state ments therein, in the light of the circumstances under which
they were made, not misleading (in each case, other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion);
(vi) this Agreement has been duly authorized, executed and
delivered by the Company (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, creditors' rights generally
from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law);
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Prospectus, will not be, an
"investment company" as defined in the Investment Company Act of 1940,
as amended;
(viii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the
12
<PAGE>
purchase and distribution of the Securities by the Underwriters in the
manner contemplated in this Agreement and in the Final Prospectus and
such other approvals (specified in such opinion) as have been
obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (i) the charter or by-laws of the Company or
its subsidiaries, (ii) to the knowledge of such counsel, the terms of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or its subsidiaries is a
party or bound or to which its or their property is subject, or (iii)
to the knowledge of such counsel, any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or its subsidiaries or any of its or their
properties; and
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which
have not been waived.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Delaware or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials and, (C) as to such matters as are acceptable
to the Representatives, upon the opinion of counsel, who may be an employee
of the Company. References to the Final Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board, the
President or any Executive Vice President and the Treasurer or the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any supplements
to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on 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;
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<PAGE>
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus (exclusive of
any supplement thereto), there has been no material adverse effect on the
financial condition, prospective financial condition, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(e) The Company shall have caused Arthur Andersen LLP to have furnished to
the Representatives, at the Execution Time and at the Closing Date, letters,
(which may refer to letters previously delivered to one or more of the
Representatives), dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and that they have performed a review of the unaudited
interim financial information of the Company for the -month period ended
, and as at , in accordance with Statement on Auditing Standards
No. 71 and stating in effect except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and financial
statement schedules [and pro forma financial statements] included or
incorporated by reference in the Registration Statement and the Final
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
for the -month period ended and as at [as indicated in
their report dated incorporated by reference in the Registration Statement
and the Final Prospectus]; carrying out certain specified procedures (but
not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the minutes
of the meetings of the stockholders, directors and [the executive, audit
and finance committees, if any] of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to , nothing came to their attention
which caused them to believe that:
(1) any unaudited financial statements included or incorporated
by reference in the Registration Statement and the Final Prospectus do
not comply as to form in all material respects with applicable
accounting requirements of the Act and with the published rules and
regulations of the Commission with respect
14
<PAGE>
to financial statements included or incorporated by reference in
quarterly reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement and the Final
Prospectus;
(2) with respect to the period subsequent to , there were
any changes, at a specified date not more than five days prior to the
date of the letter, in the long-term debt of the Company and its
subsidiaries or capital stock of the Company or decreases in the
stockholders' equity of the Company or decreases in working capital of
the Company and its subsidiaries as compared with the amounts shown on
the most recent consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Final Prospectus, or
for the period from to such specified date there were any decreases,
as compared with the corresponding period in the preceding year or,
the corresponding period in the preceding quarter, in net income
before income taxes or in total or per share amounts of net income of
the Company and its subsidiaries, except in all instances for changes
or decreases set forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the
Representatives;
(3) the information included or incorporated by reference in the
Registration Statement and Final Prospectus in response to Regulation
S-K, Item 301 (Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive Compensation) and Item
503(d) (Ratio of Earnings to Fixed Charges) is not in conformity with
the applicable disclosure requirements of Regulation S-K; or
(4) the unaudited amounts of [describe the capsule information
and its location] do not agree with the amounts set forth in the
unaudited financial statements for the same periods or were not
determined on a basis substantially consistent with that of the
corresponding amounts in the audited financial statements included or
incorporated by reference in the Registration Statement and the Final
Prospectus; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Registration Statement
and the Final Prospectus and in Exhibit 12 to the Registration Statement,
including the information set forth under the captions " " and "
" in the Final Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7 and 11 of the Company's Annual Report on Form
10-K, incorporated by reference in the Registration Statement and the Final
Prospectus, and the information included in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly Reports on Form 10-Q,
incorporated by reference in the Registration Statement and the Final
Prospectus, agrees with the accounting records
15
<PAGE>
of the Company and its subsidiaries, excluding any questions of legal
interpretation; and
(iv) on the basis of a reading of the unaudited pro forma financial
statements included or incorporated by reference in the Registration
Statement and the Final Prospectus (the "pro forma financial statements");
carrying out certain specified procedures; inquiries of certain officials
of the Company [and [insert name of acquired company, if appropriate]] who
have responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (e) include
any supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (e) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
[(h) The Securities shall have been listed and admitted and authorized
for trading on the , and satisfactory evidence of such actions shall
have been provided to the Representatives.]
(i) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
[each officer and director of the Company] addressed to the
Representatives.
(j) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
16
<PAGE>
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancelation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, NY 10019, on the
Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through [ ] on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. The Company agrees to indemnify
---------------------------------
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law 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 a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof 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
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the Company will not be liable in any such case to the extent that any such
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 inclusion therein; provided further, that with
----------------
respect to any untrue statement or omission of material fact made in any
Preliminary Prospectus, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the securities concerned, to
the extent that any such loss, claim, damage or liability of such Underwriter
occurs under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company
had previously furnished copies of the Prospectus to the Representatives, (x)
delivery of the Prospectus was required by the Act to be made to such person,
(y) the untrue statement or omission of a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such securities to such
17
<PAGE>
person, a copy of the Prospectus. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with refer
ence to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in 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 regarding delivery
of the Securities, the legend in block capital letters on page [2] related to
stabilization, syndicate covering transactions and penalty bids and, under the
heading "Underwriting" or "Plan of Distribution", (i) the sentences related to
concessions and reallowances and (ii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids] in any Preliminary Final
Prospectus and the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 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 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, 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 additional to those available to the
indemnifying party, (iii) 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 the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
18
<PAGE>
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that 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
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 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
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the 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 the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. 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, 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 bears to the aggregate amount
of Securities set forth 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 I 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 five Business Days, as the Representatives shall determine
19
<PAGE>
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.
10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Prospectus (exclusive of
any supplement thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the 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 or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancelation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the General Counsel and confirmed to the General
Counsel, at the address specified in Schedule I hereto, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
(404) 853-1330 and confirmed to it at 1420 Peachtree Street, N.E., Atlanta, GA
50309-3002, attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
-------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
---------
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
------------
shall have the meanings indicated.
20
<PAGE>
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph
1(a) above contained in the Registration Statement at the Effective Date
including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City or Atlanta,
Georgia.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in para graph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415","Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
21
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
National Service Industries, Inc.
By: __________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date specified in
Schedule I hereto.
and
By:
By: ______________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement
22
<PAGE>
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF CERTAIN OFFICER, DIRECTOR OR MAJOR SHAREHOLDER OF
CORPORATION]
National Service Industries, Inc.
---------------------------------
Public Offering of [Preferred/Common] Stock
-------------------------------------------
, 19
[NAME OF COMANAGERS, IF ANY]
As Representative[s] of the several Underwriters,
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between National Services
Industries, Inc., a Delaware corporation (the "Company"), and [each of] you as
representative[s] of a group of Underwriters named therein, relating to an
underwritten public offering of [Preferred/Common] Stock, $ par value (the
"[Preferred/Common] Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of , offer, sell, contract to sell, pledge or otherwise dispose
of, or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for
such capital stock, or publicly announce an intention to effect any such
transaction, for a period of days after the date of this Agreement, other
than shares of Common Stock disposed of as bona fide gifts approved by .
23
<PAGE>
SCHEDULE I
Underwriting Agreement dated
Registration Statement No.
Representative(s):
Title, Purchase Price and Description of Securities:
Title: [Preferred/Common] Stock
Number of Shares to be sold by the Company:
Price to Public per Share (include accrued dividends, if any):
Price to Public -- total:
Underwriting Discount per Share:
Underwriting Discount -- total:
Proceeds to Company per Share:
Proceeds to Company -- total:
Other provisions:
Closing Date, Time and Location:
Type of Offering: Non-delayed
Date referred to in Section 5(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s):
Modification of items to be covered by the letter from Arthur Andersen LLP
delivered pursuant to Section 6(e) at the Execution Time:
Address for Notices to the Underwriters Pursuant to Section 12:
24
<PAGE>
SCHEDULE II
UNDERWRITERS PRINCIPAL NUMBER
- ------------ OF UNDERWRITTEN
SECURITIES TO
BE PURCHASED
----------------
...................................... $
____________________
Total................................. $
====================
25
<PAGE>
SCHEDULE III
SIGNIFICANT SUBSIDIARIES
------------------------
26
<PAGE>
[Draft--7/08/98]
EXHIBIT 4.1
================================================================================
INDENTURE
Between
NATIONAL SERVICE INDUSTRIES, INC.
and
SUNTRUST BANK, ATLANTA
Dated as of [________], 199[_]
SENIOR DEBT SECURITIES
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties....................................................................
Recitals of the Company....................................................
ARTICLE I
Definitions and Other
---------------------
Provisions of General Application
---------------------------------
SECTION 101. Definitions.................................................
SECTION 102. Incorporation by Reference of Trust
Indenture Act..........................................
SECTION 103. Compliance Certificates and Opinions........................
SECTION 104. Form of Documents Delivered to
Trustee................................................
SECTION 105. Acts of Holders; Record Dates...............................
SECTION 106. Notices, etc., to Trustee and Company.......................
SECTION 107. Notice to Holders; Waiver...................................
SECTION 108. Conflict with Trust Indenture Act...........................
SECTION 109. Effect of Headings and Table
of Contents............................................
SECTION 110. Successors and Assigns......................................
SECTION 111. Separability Clause.........................................
SECTION 112. Benefits of Indenture.......................................
SECTION 113. Governing Law...............................................
SECTION 114. Legal Holidays..............................................
SECTION 115. Corporate Obligation........................................
SECTION 116. Counterpart Originals.......................................
ARTICLE II
Security Forms
--------------
SECTION 201. Forms Generally.............................................
SECTION 202. Form of Trustee's Certificate of
Authentication.........................................
SECTION 203. Securities in Global Form...................................
SECTION 204. Book-Entry Securities.......................................
ARTICLE III
The Securities
--------------
SECTION 301. Amount Unlimited; Issuable in Series........................
SECTION 302. Denominations...............................................
</TABLE>
I
<PAGE>
Contents, p. 2
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 303. Execution, Authentication, Delivery
and Dating.............................................
SECTION 304. Temporary Securities........................................
SECTION 305. Registration, Registration of
Transfer and Exchange..................................
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities.............................................
SECTION 307. Payment of Interest; Interest Rights
Preserved..............................................
SECTION 308. Persons Deemed Owners.......................................
SECTION 309. Cancelation.................................................
SECTION 310. Computation of Interest.....................................
SECTION 311. CUSIP Numbers...............................................
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 401. Satisfaction and Discharge of Indenture.....................
SECTION 402. Application of Trust Money..................................
SECTION 403. Discharge of Liability on Securities
of Any Series..........................................
SECTION 404. Reinstatement...............................................
ARTICLE V
Remedies
--------
SECTION 501. Events of Default...........................................
SECTION 502. Acceleration of Maturity; Rescission and
Annulment..............................................
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.............................
SECTION 504. Trustee May File Proofs of Claim............................
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities...............................
SECTION 506. Application of Money Collected..............................
SECTION 507. Limitation on Suits.........................................
SECTION 508. Unconditional Right of Holders To Receive
Principal, Premium and Interest........................
SECTION 509. Restoration of Rights and Remedies..........................
SECTION 510. Rights and Remedies Cumulative..............................
SECTION 511. Delay or Omission Not Waiver................................
SECTION 512. Control by Holders..........................................
SECTION 513. Waiver of Past Defaults.....................................
SECTION 514. Undertaking for Costs.......................................
SECTION 515. Waiver of Stay or Extension Laws............................
</TABLE>
II
<PAGE>
Contents, p. 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VI
The Trustee
-----------
SECTION 601. Certain Duties and Responsibilities.........................
SECTION 602. Notice of Defaults..........................................
SECTION 603. Certain Rights of Trustee...................................
SECTION 604. Not Responsible for Recitals or
Issuance of Securities.................................
SECTION 605. May Hold Securities.........................................
SECTION 606. Money Held in Trust.........................................
SECTION 607. Compensation and Reimbursement..............................
SECTION 608. Disqualification; Conflicting Interests.....................
SECTION 609. Corporate Trustee Required; Eligibility.....................
SECTION 610. Resignation and Removal;
Appointment of Successor...............................
SECTION 611. Acceptance of Appointment by Successor......................
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business..............................
SECTION 613. Preferential Collection of Claims ..........................
Against Company........................................
SECTION 614. Appointment of Authenticating Agent.........................
ARTICLE VII
Holder's Lists and Reports
--------------------------
by Trustee and Company
----------------------
SECTION 701. Company To Furnish Trustee Names and
Addresses of Holders...................................
SECTION 702. Preservation of Information;
Communications to Holders..............................
SECTION 703. Reports by Trustee..........................................
SECTION 704. Reports by Company..........................................
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
SECTION 801. Company May Consolidate, etc.,
Only on Certain Terms..................................
SECTION 802. Successor Person Substituted................................
</TABLE>
III
<PAGE>
Contents, p. 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 901. Supplemental Indentures Without
Consent of Holders.....................................
SECTION 902. Supplemental Indentures With Consent
of Holders.............................................
SECTION 903. Execution of Supplemental Indentures........................
SECTION 904. Effect of Supplemental Indentures...........................
SECTION 905. Conformity With Trust Indenture Act.........................
SECTION 906. Reference in Securities to
Supplemental Indentures................................
ARTICLE X
Covenants
---------
SECTION 1001. Payment of Principal, Premium
and Interest...........................................
SECTION 1002. Maintenance of Office or Agency.............................
SECTION 1003. Money for Securities Payments To Be
Held in Trust..........................................
SECTION 1004. Existence...................................................
SECTION 1005. Maintenance of Properties...................................
SECTION 1006. Limitation on Sale/Leaseback
Transactions...........................................
SECTION 1007. Limitation on Liens.........................................
SECTION 1008. Payment of Taxes and Other Claims...........................
SECTION 1009. Statement by Officers as to Default.........................
SECTION 1010. Waiver of Certain Covenants.................................
SECTION 1011. Additional Amounts..........................................
ARTICLE XI
Redemption of Securities;
-------------------------
Repayment at Option of Holders
------------------------------
SECTION 1101. Applicability of Article....................................
SECTION 1102. Election To Redeem; Notice to Trustee.......................
SECTION 1103. Selection by Trustee of Securities
To Be Redeemed.........................................
SECTION 1104. Notice of Redemption........................................
SECTION 1105. Deposit of Redemption Price.................................
SECTION 1106. Securities Payable on Redemption Date.......................
SECTION 1107. Securities Redeemed in Part.................................
SECTION 1108. Purchase of Securities......................................
SECTION 1109. Rescission of Redemption....................................
</TABLE>
IV
<PAGE>
Contents, p. 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1110. Repayment at the Option of Holders..........................
ARTICLE XII
Sinking Funds
-------------
SECTION 1201. Applicability of Article ...................................
SECTION 1202. Satisfaction of Sinking Fund
Payments with Securities...............................
SECTION 1203. Redemption of Securities for
Sinking Fund...........................................
ARTICLE XIII
Meetings of Holders of Securities
---------------------------------
SECTION 1301. Purposes for Which Meetings May Be Called...................
SECTION 1302. Call, Notice and Place of Meetings..........................
SECTION 1303. Persons Entitled To Vote at Meetings........................
SECTION 1304. Quorum; Action..............................................
SECTION 1305. Determination of Voting Rights;
Conduct and Adjournment of Meetings....................
SECTION 1306. Counting Votes and Recording Action
of Meetings............................................
ARTICLE XIV
Conversion
----------
SECTION 1401. Conversion Privilege........................................
SECTION 1402. Conversion Procedure; Rescission of
Conversion; Conversion Price;
Fractional Shares......................................
SECTION 1403. Adjustment of Conversion Price for
Common Stock or Marketable Securities..................
SECTION 1404. Consolidation or Merger of the Company......................
SECTION 1405. Notice of Adjustment........................................
SECTION 1406. Notice in Certain Events....................................
SECTION 1407. Company To Reserve Stock; Registration;
Listing................................................
SECTION 1408. Taxes on Conversion.........................................
SECTION 1409. Conversion After Record Date................................
SECTION 1410. Corporate Action Regarding Par Value of
Common Stock ........................................
SECTION 1411. Company Determination Final.................................
SECTION 1412. Trustee's Disclaimer........................................
</TABLE>
V
<PAGE>
Contents, p. 6
Page
----
VI
<PAGE>
INDENTURE, dated as of [ ], 1998, between
NATIONAL SERVICE INDUSTRIES, INC., a corporation
duly organized and existing under the laws of the
State of Delaware (herein called the "Company"),
having its principal office at 1420 Peachtree
Street, N.E., Atlanta, GA 30309, and SUNTRUST
BANK, ATLANTA, a Georgia banking corporation as
Trustee, the office of the Trustee at which at the
date hereof its corporate trust business is
principally administered being 55 Edgewood Ave.,
Room 400-Annex A, Atlanta, GA 30303.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
This Indenture is subject to the provisions of the Trust Indenture Act
and the rules and regulations of the Commission promulgated thereunder that are
required to be part of this Indenture and, to the extent applicable, shall be
governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Securities
or of series thereof, as follows:
ARTICLE I
Definitions and Other Provisions
--------------------------------
of General Application
----------------------
SECTION 101. Definitions. For all purposes of this Indenture, except
------------
as otherwise expressly provided or unless the context otherwise requires:
<PAGE>
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at the
date of this instrument; and
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article VI, are defined in Section
102.
"Act," when used with respect to any Holder, has the meaning specified
in Section 105.
"Additional Amounts" means any additional amounts that are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein or pursuant thereto, to be paid by the Company with respect to
certain taxes, assessments or other governmental charges imposed on certain
Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. The Trustee may request and may conclusively rely upon an Officers'
Certificate to determine whether any Person is an Affiliate of any specified
Person.
"Attributable Indebtedness", when used with respect to any
Sale/Leaseback Transaction, means, as at the time of determination, the present
value (discounted at a rate equivalent to the Company's then current weighted
average cost of funds for borrowed money as at the time of determination,
compounded on a semiannual basis) of the total obligations of the lessee for
rental payments (other than amounts required to
2
<PAGE>
be paid on account of maintenance and repairs, reconstruction insurance, taxes,
assessments, water rates and similar charges and contingent rates (such as those
based on sales)) during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).
"Authenticating Agent" means any Person, which may include the
Company, authorized by the Trustee to act on behalf of the Trustee pursuant to
Section 614 to authenticate Securities of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or a committee thereof and to be in full force and effect
on the date of such certification, and delivered to the Trustee.
"Book-Entry Security" has the meaning specified in Section 204.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Capital Stock" of any Person means and includes any and all shares,
rights to purchase, warrants or options (whether or not currently exercisable),
participation or other equivalents of or interests in (however designated) the
equity (which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person (excluding any debt
securities that are convertible into, or exchangeable for, such equity).
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"Capitalized Lease Obligation" of any Person means any obligation of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes in
accordance with generally accepted accounting principles; and the amount of such
obligation shall be the capitalized amount thereof determined in accordance with
generally accepted accounting principles.
"Closing Price" of the Common Stock or other marketable Security, as
the case may be, shall mean the last reported sale price of such stock or other
Marketable Security (regular way) as shown on the Composite Tape of the NYSE
(or, if such stock or other Marketable Security is not listed or admitted to
trading on the NYSE, on the principal national securities exchange on which such
stock or other Marketable Security is listed or admitted to trading), or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices on the NYSE (or, if such stock or other Marketable Security is not
listed or admitted to trading on the NYSE, on the principal national securities
exchange on which such stock or other Marketable Security is listed or admitted
to trading), or, if it is not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as reported
by the National Association of Securities Dealers Automated Quotation System
(NASDAQ), or if such stock or other Marketable Security is not so reported, the
average of the closing bid and asked prices as furnished by any member of the
National Association of Securities Dealers, Inc., selected from time to time by
the Company for that purpose.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board,
its President or a
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Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, an
Assistant Controller, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Consolidated Tangible Assets" of the Company means the aggregate
amount of assets (less applicable reserves therefrom (i) all current
liabilities, and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like tangibles, all as set forth
on the most recent quarterly balance sheet of the Company and its consolidated
subsidiaries and computed in accordance with generally accepted accounting
principles.
"Conversion Agent" means any Person authorized by the Company to
receive Securities to be converted into Common Stock or other Marketable
Securities on behalf of the Company. The Company initially authorizes the
Trustee to act as Conversion Agent for the Securities on its behalf. The Company
may at any time and from time to time authorize one or more Persons to act as
Conversion Agent in addition to or in place of the Trustee with respect to any
series of Securities issued under this Indenture.
"Conversion Event" has the meaning specified in Section 501.
"Conversion Price" means, with respect to any series of Securities
which are convertible into Common Stock or other Marketable Securities, the
price per share of Common Stock or the price per designated unit of other
Marketable Security at which the Securities of such series are so convertible as
set forth in the Board Resolution with respect to such series (or in any
supplemental indenture entered into pursuant to Section 901(j) with respect to
such series), as the same may be adjusted from time to time in accordance with
Section 1403 (or such supplemental indenture).
"Converting Holder" shall have the meaning specified in Section
1402(c) of this Indenture.
"Corporate Trust Office" means the principal office of the Trustee
first above written at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is that
indicated in the introductory paragraph of this Indenture.
"Current Market Price" on any date shall mean the average of the daily
Closing Prices per share of Common Stock or of such other Marketable Securities
for any thirty (30) consecutive Trading Days selected by the Company prior to
the day in question, which thirty (30) consecutive Trading Day period shall not
commence more than forty-five (45) Trading
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Days prior to the day in question; provided that with respect to Section
1403(3), the "Current Market Price" of the Common Stock or of such other
Marketable Securities shall mean the average of the daily Closing Prices per
share of Common Stock or of such other Marketable Securities for the five (5)
consecutive Trading Days ending on the date of the distribution referred to in
Section 1403(3) (or if such date shall not be a Trading Day, on the Trading Day
immediately preceding such date).
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a global Security, the Person designated as
Depositary by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
"Depositary" as used with respect to the Securities of any series shall mean the
Depositary with respect to the Securities of that series.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Event of Default" has the meaning specified in Section 501.
"Exchange Rate" has the meaning specified in Section 501.
"Funded Indebtedness" means all Indebtedness (including Indebtedness
incurred under any revolving credit, letter of credit or working capital
facility) that matures by its terms, or that is renewable at the option of any
obligor thereon to a date, more than one year after the date on which such
Indebtedness is originally incurred.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or future contract or other
similar agreement or arrangement relating to interest rates or foreign exchange
rates.
"Holder", when used with respect to any Security, means the Person in
whose name the Security is registered in the Security Register.
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"Indebtedness" of any Person at any date means, without duplication,
(a) all indebtedness of such Person for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby letters of
credit incurred by such Person in the ordinary course of business, (d) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred in the
ordinary course of business, (e) all Capitalized Lease Obligations of such
Person, (f) all Indebtedness of others secured by a lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person, (g) all
Indebtedness of others guaranteed by such Person to the extent of such guarantee
and (h) all Hedging Obligations of such Person.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301 and the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Issue Date" means the date on which any series of the Securities
is first issued under this Indenture.
"Judgment Currency" has the meaning specified in Section 409.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law. For
the purposes of this Indenture, the Company or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, Capitalized
Lease Obligation (other than any Capitalized Lease
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Obligation relating to any building, structure, equipment or other property used
or to be used in the ordinary course of business of the Company and the
Restricted Subsidiaries) or other title retention agreement relating to such
asset.
"Marketable Security" means any common stock, debt security or other
security of a Person which is (or will, upon distribution thereof, be) listed on
the NYSE, the American Stock Exchange or any national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended,
or approved for quotation in the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System or any
similar system of automated dissemination of quotation of securities prices in
the United States or for which there is a recognized market maker or trading
market.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, notice of option to elect
repayment or otherwise.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Net Proceeds" means, with respect to any Sale/Leaseback Transaction
entered into by the Company or any Subsidiary, the aggregate net proceeds
received by the Company or such Subsidiary from such Sale/Leaseback Transaction
after payment of expenses, taxes, commissions and similar amounts incurred in
connection therewith, whether such proceeds are in cash or in property (valued
at the fair market value thereof at the time of receipt, as determined by the
Board of Directors).
"Officer" means the Chairman, the President, the Treasurer, any
Assistant Treasurer, Controller, any Assistant Controller, Secretary, any
Assistant Secretary or any Vice President of a Person.
"Officers' Certificate" means a certificate signed by the Chairman,
the President or a Vice President, and by the Treasurer, the Controller, the
Secretary or an Assistant Treasurer, Assistant Controller or Assistant
Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company, rendered, if applicable, in
accordance with Section 314(d) of the Trust Indenture Act.
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"Ordinary Course Lien" means:
(a) Liens for taxes, assessments or governmental charges or levies on
the property of the Company or any Restricted Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or
are being contested in good faith by appropriate proceedings and for which
adequate reserves, if any, in accordance with generally accepted accounting
principles shall have been set aside on the books of the Company.
(b) Liens imposed by law, such as carriers', warehousemen's,
landlords' and mechanics' liens and other similar liens arising in the
ordinary course of business which secure obligations not more than 60 days
past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves, if any, in accordance with
generally accepted accounting principles shall have been set aside on the
books of the Company;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the ordinary course of business of the Company and the
Restricted Subsidiaries;
(e) Liens arising under operating agreements or similar agreements in
respect of obligations which are not yet due or which are being contested
in good faith by appropriate proceedings;
(f) Liens on personal property (excluding the Capital Stock of any
Restricted Subsidiary) securing Indebtedness of the Company or any
Restricted Subsidiary other than Funded Indebtedness; and
(g) Liens which secure a judgment or other court-ordered award or
settlement as to which the Company has not exhausted its appellate rights.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
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"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancelation;
(b) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
--------
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(c) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether a
quorum is present at a meeting of Holders of Securities, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the principal amount thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (ii) the principal amount of a
Security denominated in a foreign currency or currency unit shall be the U.S.
dollar equivalent, determined by the Company on the date of original issuance of
such Security, of the principal amount (or, in the case of an Original Issue
Discount Security, the U.S. dollar equivalent, determined on the date of
original issuance of such Security, of the amount determined as provided in (i)
above), of such Security and (iii) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver or upon any
such determination as to the
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presence of a quorum, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall be subordinated in right of
payment to the Securities.
"Paying Agent" means any Person, which may include the Company,
authorized by the Company to pay the principal of (and premium, if any) or
interest on any one or more series of Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof or other entity of any
kind.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as set forth or
specified in accordance with Section 301 subject to the provisions of Section
1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any manufacturing plant or facility located
within the United States of America (other than its territories or possessions)
owned by the Company or any Restricted Subsidiary which in the opinion of the
Board of Directors, is of material importance to the total business conducted by
the Company and its Restricted Subsidiaries as a whole.
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"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Redemption Rescission Event" shall mean the occurrence of (a) any
general suspension of trading in, or limitation on prices for, securities on the
principal national securities exchange on which shares of Common Stock or
Marketable Securities are registered and listed for trading (or, if shares of
Common Stock or Marketable Securities are not registered and listed for trading
on any such exchange, in the over-the-counter market) for more than six-and-one-
half (6-1/2) consecutive trading hours, (b) any decline in either the Dow Jones
Industrial Average or the Standard & Poor's Index of 400 Industrial Companies
(or any successor index published by Dow Jones & Company, Inc. or Standard &
Poor's Corporation) by either (i) an amount in excess of 10%, measured from the
close of business on any Trading Day to the close of business on the next
succeeding Trading Day during the period commencing on the Trading Day preceding
the day notice of any redemption of Securities is given (or, if such notice is
given after the close of business on a Trading Day, commencing on such Trading
Day) and ending at the time and date fixed for redemption in such notice or (ii)
an amount in excess of 15% (or if the time and date fixed for redemption is more
than 15 days following the date on which such notice of redemption is given,
20%), measured from the close of business on the trading Day preceding the day
notice of such redemption is given (or, if such notice is given after the close
of business on Trading Day, from such Trading Day) to the close of business on
any Trading Day at or prior to the time and date fixed for redemption, (c) a
declaration of a banking moratorium or any suspension of payments in respect of
banks by Federal or state authorities in the United States or (d) the
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the United States which in the
reasonable judgment of the Company could have a material adverse effect on the
market for the Common Stock or Marketable Securities.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301, or, if not so specified, 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 or the fifteenth day of the
calendar month preceding such Interest Payment Date if such Interest Payment
Date is
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the first date of a calendar month, whether or not such day shall be a Business
Day.
"Required Currency" has the meaning specified in Section 506.
"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 Chairman
of the Trust Committee, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier, any Trust Officer or Assistant Trust Officer, the Controller
or any Assistant Controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company (a)
substantially all the property of which is located, or substantially all the
business of which is carried on, within the United States of America (not
including its territories and possessions) and (b) that owns a Principal
Property; provided, however, that the term "Restricted Subsidiary" shall not
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include any Subsidiary that is principally engaged in financing the operations
of the Company, or its Subsidiaries, or both, outside the United States of
America.
"Sale/Leaseback Transaction" has the meaning specified in Section
1006.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
Securities of any series means a date fixed by the Trustee pursuant to Section
307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
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"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trading Day" shall mean, with respect to the Common Stock or a
Marketable Security, so long as the Common Stock or such Marketable Security, as
the case may be, is listed or admitted to trading on the NYSE, a day on which
the NYSE is open for the transaction of business, or, if the Common Stock or
such Marketable Security, as the case may be, is not listed or admitted to
trading on the NYSE a day on which the principal national securities exchange on
which the Common Stock or such Marketable Security, as the case may be, is
listed is open for the transaction of business, or, if the Common Stock or such
Marketable Security, as the case may be, is not so listed or admitted for
trading on any national securities exchange, a day on which NASDAQ is open for
the transaction of business.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 905.
"United States" means the United States of America (including the
States and the District of Columbia) and its "possessions", which include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
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"U.S. Government Obligations" has the meaning specified in Section
401.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Wholly Owned Subsidiary" means a corporation all the outstanding
voting stock (other than any directors' qualifying shares) of which is owned,
directly or indirectly, by the Company or by one or more other Wholly Owned
Subsidiaries, or by the Company and one or more other Wholly Owned Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Yield to Maturity", when used with respect to any Original Issue
Discount Security, means the yield to maturity, if any, set forth on the face
thereof.
SECTION 102. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture have the
following meanings:
"Bankruptcy Act" means the Bankruptcy Act or Title 11 of the United
States Code.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder.
"Indenture To Be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
"Obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All the other Trust Indenture Act terms used in this Indenture that are defined
by the Trust Indenture Act, defined by Trust Indenture Act reference to another
statute or defined by Commission rule under the Trust Indenture Act and not
otherwise defined herein have the meanings assigned to them therein.
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SECTION 103. Compliance Certificates and Opinions. Except as
-------------------------------------
otherwise expressly provided by this Indenture, upon any application or request
by the Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any (including any covenants the
compliance with which constitutes a condition precedent), provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any (including any covenants the compliance with which constitutes
a condition precedent), have been complied with, except that in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such Person
has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee. (a) In any
---------------------------------------
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
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(b) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 105. Acts of Holders; Record Dates. (a) Any request, demand,
------------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent, or the holding
of any Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1306.
The Company may set in advance a record date for purposes of
determining the identity of Holders of Securities entitled to vote or consent to
any action by vote or consent authorized or permitted under this Indenture,
which record date shall be the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation. If a record date is fixed, those Persons who
were Holders of Outstanding Securities at such record date (or
17
<PAGE>
their duly designated proxies), and only those persons, shall be entitled with
respect to such Securities to take such action by vote or consent or to revoke
any vote or consent previously given, whether or not such Persons continue to be
Holders after such record date. Promptly after any record date is set pursuant
to this paragraph, the Company, at its own expense, shall cause notice thereof
to be given to the Trustee in writing in the manner provided in Section 106 and
to the relevant Holders as set forth in Section 107.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security. Any Holder or subsequent Holder may revoke the request, demand,
authorization, direction, notice, consent or other Act as to his Security or
portion of his Security; provided, however, that such revocation shall be
-------- -------
effective only if the Trustee receives the notice of revocation before the date
the Act becomes effective.
SECTION 106. Notices, etc., to Trustee and Company. Any request,
--------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, (a) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Dave Kaye, and shall be deemed to be made upon, given or furnished
to, or
18
<PAGE>
filed with, the Trustee upon actual receipt by the Trustee thereof or (b) the
Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address of
its principal office specified in the first paragraph of this instrument or at
any other address previously furnished in writing to the Trustee by the Company,
Attention: General Counsel, and shall be deemed to be made upon, given or
furnished to, or filed with, the Trustee upon actual receipt by the Trustee
thereof.
SECTION 107. Notice to Holders; Waiver. Where this Indenture
--------------------------
provides for notice to Holders of Securities of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) to Holders of
Securities if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service, or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Securities by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for every
purpose hereunder. In any case in which notice to Holders of Securities is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular holder of a Security, shall affect the
sufficiency of such notice with respect to other Holders of Securities given as
provided herein.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 108. Conflict with Trust Indenture Act. If any provision
----------------------------------
hereof limits, qualifies or conflicts with any provision of the Trust Indenture
Act or another provision hereof which is required to be included in this
Indenture by any of the provisions of the Trust Indenture Act, such provision of
the Trust Indenture Act or required provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, such provision of the Trust Indenture
19
<PAGE>
Act shall be deemed to apply to this Indenture as so modified or to be excluded.
SECTION 109. Effect of Headings and Table of Contents. The Article
-----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 110. Successors and Assigns. All covenants and agreements in
-----------------------
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 111. Separability Clause. In case any provision in this
--------------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 112. Benefits of Indenture. Nothing in this Indenture or in
----------------------
the Securities, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent, Paying
Agent and Security Registrar, and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 113. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL
--------------
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
SECTION 114. Legal Holidays. In any case where any Interest Payment
---------------
Date, Redemption Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of principal and interest (and premium
and Additional Amounts, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity; provided that no interest shall
--------
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
SECTION 115. Corporate Obligation. No recourse may be taken,
---------------------
directly or indirectly, against any incorporator, subscriber to the capital
stock, stockholder, officer, director or employee of the Company or the Trustee
or of any predecessor or successor of the Company or the Trustee with
20
<PAGE>
respect to the Company's obligations on the Securities or the obligations of the
Company or the Trustee under this Indenture or any certificate or other writing
delivered in connection herewith. Each Holder by accepting a Security waives all
such recourse.
SECTION 116. Counterpart Originals. The parties may sign any number
----------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
ARTICLE II
Security Forms
--------------
SECTION 201. Forms Generally. The Securities of each series shall be
----------------
in substantially such form or forms (including global form) as shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If temporary Securities of any series are issued in
global form as permitted by Section 304, the form thereof shall be established
as provided in the preceding sentence. A copy of the Board Resolution
establishing the form or forms of Securities of any series shall be certified by
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
303 for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution thereof.
21
<PAGE>
SECTION 202. Form of Trustee's Certificate of Authentication. The
------------------------------------------------
Trustee's certificate of authentication shall be in substantially the following
form:
"This is one of the Securities of the series designated therein and
referred to in the within-mentioned Indenture.
[ ] as Trustee By Authorized Signatory".
SECTION 203. Securities in Global Form. If Securities of a series
--------------------------
are issuable in global form, as contemplated by Section 301, then,
notwithstanding clause (10) of Section 301 and the provisions of Section 302,
any such Security shall represent such of the Outstanding Securities of such
series as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Outstanding Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the Trustee in
such manner and upon instructions given by such Person or Persons as shall be
specified in such Security or in a Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304. Subject to the provisions of Section 303
and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in global form in the manner and upon instructions given by the Person
or Persons specified in such Security or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 103 except as set forth in said Section 303 or 304.
The provisions of the last sentence of Section 303 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 103 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of (and
premium, if any) and
22
<PAGE>
interest on any Security form shall be made to the Person or Persons specified
therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company or of the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a global Security as shall be
specified in a written statement, if any, of the Holder of such global Security.
Global Securities shall be issued in either registered form.
SECTION 204. Book-Entry Securities. Notwithstanding any provision of
----------------------
this Indenture to the contrary:
(a) At the discretion of the Company, any Security may be issued from
time to time, in whole or in part, in permanent global form registered in the
name of a Depositary, or its nominee. Each such Security in permanent global
form is hereafter referred to as a "Book-Entry Security". Upon such election,
the Company shall execute, and the Trustee or an Authenticating Agent shall
authenticate and deliver, one or more Book-Entry Securities that (a) are
denominated in an amount equal to the aggregate principal amount of the
Outstanding Securities of such series, (b) are registered in the name of the
Depositary or its nominee, (c) are delivered by the Trustee or an Authenticating
Agent to the Depositary or pursuant to the Depositary's instructions and (iv)
bear a legend in substantially the following form (or such other form as the
Depositary and the Company may agree upon):
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF [THE
DEPOSITARY], TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF [NOMINEE OF THE DEPOSITARY] OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF [THE DEPOSITARY], AND ANY PAYMENT IS MADE TO
[NOMINEE OF THE DEPOSITARY] OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF [THE DEPOSITARY], ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, [NOMINEE OF THE DEPOSITARY], HAS
AN INTEREST HEREIN.
(b) Any Book-Entry Security shall be initially executed and delivered
as provided in Section 303. Notwithstanding any other provision of this
Indenture, unless and until it is exchanged in whole or in part for Securities
23
<PAGE>
not issued in global form, a Book-Entry Security may not be transferred except
as a whole by the Depositary to a nominee of such Depositary, by a nominee of
such Depositary to such Depositary or another nominee of such Depositary, or by
such Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary.
(c) If at any time the Depositary notifies the Company or the Trustee
that it is unwilling or unable to continue as Depositary for any Book-Entry
Securities, or if any time the Depositary for any Book-Entry Securities shall no
longer be qualified to serve as the Depositary, the Company shall appoint a
successor Depositary, whereupon the retiring Depositary shall surrender or cause
the surrender of its Book-Entry Security or Securities to the Trustee. The
Trustee shall promptly notify the Company upon receipt of such notice. If a
successor Depositary has not been so appointed by the effective date of the
resignation of the Depositary, the Book-Entry Securities will be issued as
Securities not issued in global form, in an aggregate principal amount equal to
the principal amount of the Book-Entry Security or Securities theretofore held
by the Depositary. The Company may at any time and in its sole discretion
determine that the Securities shall no longer be Book-Entry Securities
represented by a global certificate or certificates, and will so notify the
Depositary. Upon receipt of such notice, the Depositary shall promptly surrender
or cause the surrender of its Book-Entry Security or Securities to the Trustee.
Concurrently therewith, Securities not issued in global form will be issued in
an aggregate principal amount equal to the principal amount of the Book-Entry
Security or Securities theretofore held by the Depositary. Upon any exchange of
Book-Entry Securities for Securities not issued in global form as set forth in
this Section 204(c), such Book-Entry Securities shall be canceled by the
Trustee, and Securities issued in exchange for such Book-Entry Securities
pursuant to this section shall be registered in such names and in such
authorized denominations as the Depositary for such Book-Entry Securities,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee or any Authenticating Agent shall
deliver such Securities to the persons in whose names such Securities are so
registered.
(d) The Company and the Trustee shall be entitled to treat the Person
in whose name any Book-Entry Security is registered as the Holder thereof for
all purposes of the Indenture and any applicable laws, notwithstanding any
notice to the contrary received by the Trustee or the Company; and the Trustee
and the Company shall have no responsibility for transmitting payments to,
communication with, notifying, or otherwise dealing with any beneficial owners
of any Book-Entry
24
<PAGE>
Security. Neither the Company nor the Trustee shall have any responsibility or
obligations, legal or otherwise, to the beneficial owners or to any other party
including the Depositary, except for the Holder of any Book-Entry Security;
provided, however, notwithstanding anything herein to the contrary, (a) for the
- -------- -------
purposes of determining whether the requisite principal amount of Outstanding
Securities have given, made or taken any request, demand, authorization,
direction, notice, consent, waiver, instruction or other action hereunder as of
any date, the Trustee shall treat any Person specified in a written statement of
the Depositary with respect to any Book-Entry Securities as the Holder of the
principal amount of such Securities set forth therein and (b) nothing herein
shall prevent the Company, the Trustee, or any agent of the Company or Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by a Depositary with respect to any Book-Entry Securities, or impair,
as between a Depositary and holders of beneficial interests in such Securities,
the operation of customary practices governing the exercise of the rights of the
Depositary as Holder of such Securities.
(e) So long as any Book-Entry Security is registered in the name of a
Depositary or its nominee, all payments of the principal of (and premium, if
any) and interest on such Book-Entry Security and redemption thereof and all
notices with respect to such Book-Entry Security shall be made and given,
respectively, in the manner provided in the arrangements of the Company with
such Depositary.
ARTICLE III
The Securities
--------------
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
-------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more
series. There shall be established in or pursuant to a Board Resolution, and
set forth in an Officers' Certificate, or established in one or more Indentures
supplemental hereto, prior to the issuance of Securities of any series,
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer
25
<PAGE>
of, or in exchange for, or in lieu of, other Securities of the series
pursuant to Sections 304, 305, 306, 806 or 1107) and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder;
(c) whether any Securities of the series are to be issuable global
form, as Book-Entry Securities or otherwise, and, if so, whether beneficial
owners of interests in any such global Security may exchange such interests
for Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305, and the
Depositary for any global Security or Securities;
(d) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(e) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether and
under what circumstances Additional Amounts with respect to such Securities
shall be payable, 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 101, the Regular Record Date for the
interest payable on any Securities on any Interest Payment Date, and the
basis upon which interest shall be calculated if other than as provided in
Section 310;
(f) if other than the Corporate Trust Office, the place or places
where, subject to the provisions of Section 1002, the principal of (and
premium, if any), any interest on and any Additional Amounts with respect
to the Securities of the series shall be payable;
(g) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company must exercise any such option;
(h) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices (whether denominated in cash,
26
<PAGE>
securities or otherwise) at which and the terms and conditions upon which,
Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(i) the denomination in which any Securities of that series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(j) the currency or currencies (including composite currencies or
currency units) in which payment of the principal of (and premium, if any),
any interest on and any Additional Amounts with respect to the Securities
of the series shall be payable if other than the currency of the United
States of America;
(k) if the principal of (and premium, if any) or interest on the
Securities of the series are to be payable, at the election of the Company
or a Holder thereof, in a currency or currencies (including composite
currencies or currency units) other than that in which the Securities are
stated to be payable, the currency or currencies (including composite
currencies or currency units) in which payment of the principal of (and
premium, if any) and interest on, and any Additional Amounts with respect
to, Securities of such series as to which such election is made shall be
payable, and the periods within which and the terms and conditions upon
which such election is to be made;
(l) if the amount of payments of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to the Securities
of the series may be determined with reference to any commodities,
currencies or indices, or values, rates or prices, the manner in which such
amounts shall be determined;
(m) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(n) any additional means of satisfaction and discharge of this
Indenture with respect to Securities of the series pursuant to Section 401,
any additional conditions to discharge pursuant to Section 401 or 403 and
the application, if any, of Section 403 to Securities of the series;
(o) any deletions or modifications of or additions to the Events of
Default set forth in Section 501 or
27
<PAGE>
covenants of the Company set forth in Article IX pertaining to the
Securities of the series;
(p) provisions, if any, with regard to the conversion or exchange of
the Securities of such series, at the option of the Holders thereof or the
Company, as the case may be, for or into new Securities of a different
series, Capital Stock or other securities and, if the Securities of such
series are convertible into Common Stock or other Marketable Securities,
the Conversion Price therefore;
(q) information with respect to book-entry procedures; and
(r) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
At the option of the Company, interest on the Securities of any series
that bears interest may be paid by mailing a check to the address of any Holder
as such address shall appear in the Security Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations. The Securities of each series shall be
--------------
issuable in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series denominated in dollars shall be
issuable in denominations of $1,000 and any integral multiple thereof. Unless
otherwise provided as contemplated by Section 301 with respect to any series of
Securities, any Securities of a series denominated in a currency other than
dollars shall be issuable in denominations that are the equivalent, as
determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for such currency, as such rate is reported or
otherwise made
28
<PAGE>
available by the Federal Reserve Bank of New York, on the applicable issue date
for such Securities, of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The
-----------------------------------------------
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President or one of its Vice Presidents,
under its corporate seal, which may be in facsimile form, reproduced thereon or
affixed thereto and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile. Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities as in this
Indenture provided and not otherwise.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such
29
<PAGE>
Opinion of Counsel, will constitute legal, valid and binding obligations of
the Company, enforceable in accordance with their terms, except as such
enforcement is subject to the effect of (i) bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or
affecting creditors' rights and (b) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law); and
(d) authentication and delivery of such Securities by the Trustee
will not violate the terms of this Indenture.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancelation as provided in Section 309 together with
a written statement (which need not comply with Section 103 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities. Pending the preparation of
---------------------
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form and with such appropriate
insertions, omissions, substitutions and other variations as
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the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancelation of any one or more temporary Securities of any
series, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of the
same series of authorized denominations. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
----------------------------------------------------
The Company shall cause to be kept for each series of Securities at one of the
offices or agencies maintained pursuant to Section 1002 a register (the register
maintained in such office and in any other office or agency of the Company in a
Place of Payment being herein sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities of such series. The Trustee is hereby initially
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series and of like tenor, of any authorized denominations and of a like
aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series and of like tenor, of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company
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shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable only as
provided in this paragraph. If the beneficial owners of interests in a global
Security are entitled to exchange such interest for Securities of such series
and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 301, then without
unnecessary delay but in any event not later than the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in an aggregate principal amount equal to
the principal amount of such global Security, executed by the Company. On or
after the earliest date on which such interests may be so exchanged, such global
Security shall be surrendered from time to time in accordance with instructions
given to the Trustee and the Depositary (which instructions shall be in writing
but need not comply with Section 103 or be accompanied by an Opinion of Counsel)
by the Common Depositary or such other depositary or Common Depositary as shall
be specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or in part, for
definitive Securities of the same series without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such global Security,
a like aggregate principal amount of other definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
global Security to be exchanged; provided, however, that no such exchanges may
-------- -------
occur during a period beginning at the opening of business 15 days before any
selection of Securities of that series is to be redeemed and ending on the
relevant Redemption Date. Promptly following any such exchange in part, such
global Security shall be returned by the Trustee to the Common Depositary or
such other depositary or Common Depositary referred to above in accordance with
the instructions of the Company referred to above. If a Security is issued in
exchange for any portion of a global Security after the close of business at the
office or agency where such exchange occurs on (a) any Regular Record Date and
before the opening of business at such office or agency on the relevant Interest
Payment Date, or (b) any Special Record Date and before the opening of business
at such office or agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date; or proposed date for payment, as the case may be, in respect of
such Security, but will be payable on such Interest Payment Date or proposed for
payment, as the case may be, only to the Person to whom
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interest in respect of such portion of such global Security is payable in
accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than exchange
pursuant to Section 304, 806 or 1107 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of such series selected for redemption and ending at the close of
business on the day of the mailing of the relevant notice of redemption, or (b)
to register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part; provided that such Security shall be simultaneously
--------
surrendered for redemption.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If
-------------------------------------------------
any mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (b) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall
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execute and upon its request the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security, a new Security of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee connected therewith).
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
-----------------------------------------------
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
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Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. 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, 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 so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee. At the option of the Company, interest on Debt Securities of any
series that bear interest may be paid by mailing a check to the address of
the person entitled thereto as such address shall appear in the Security
Register or by wire transfer to an account maintained by the person
entitled thereto as specified in the Security Register.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture, upon registration of transfer of, in exchange
for or in lieu of, any other Security, shall carry the rights to interest
accrued
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and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
----------------------
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307)
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancelation. All Securities surrendered for payment,
------------
redemption, repayment at option of the Holder, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee. All Securities
so delivered shall be promptly canceled by the Trustee. The Company may at any
time deliver to the Trustee for cancelation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest. Except as otherwise specified
------------------------
as contemplated by Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 311. CUSIP Numbers. The Company in issuing the Securities
--------------
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
- --------
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
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ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
----------------------------------------
shall upon Company Request cease to be of further effect with respect to
Securities of a series, and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to Securities of such series, when
(a) either
(i) all Securities of such series theretofore authenticated and
delivered (other than (A) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
306 and (B) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 903) have been delivered to the Trustee for
cancelation; or
(ii) with respect to all Outstanding Securities of such series
not theretofore delivered to the Trustee for cancelation, the Company
has deposited or caused to be deposited with the Trustee as trust
funds, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, for the purpose money or U.S.
Government Obligations maturing as to principal and interest in such
amounts and at such times as will, together with the income to accrue
thereon, without consideration of any reinvestment thereof, be
sufficient to pay and discharge the entire indebtedness on all
Outstanding Securities of such series not theretofore delivered to the
Trustee for cancelation for principal (and premium and Additional
Amounts, if any) and interest to the Stated Maturity or any Redemption
Date contemplated by the penultimate paragraph of this Section, as the
case may be; or
(iii) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by Section
301, to be applicable to the Securities of such series;
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(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of
such series;
(c) the Company has complied with any other conditions specified
pursuant to Section 301 to be applicable to the satisfaction and discharge
of Securities of such series pursuant to this Section 401;
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to the Outstanding Securities of such series have
been complied with;
(e) if the conditions set forth in Section 401(a)(i) have not been
satisfied, and unless otherwise specified pursuant to Section 301 for the
Securities of such series, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of Securities of such
series will not recognize income, gain or loss for United States federal
income tax purposes as a result of such deposit, satisfaction and discharge
and will be subject to United States Federal income tax on the same amount
and in the same manner and at the same time as would have been the case if
such deposit, satisfaction and discharge had not occurred; and
(f) no default or Event of Default with respect to the Securities of
such issue shall have occurred and be continuing on the date of such
deposit or, insofar as clause (e) or (f) of Section 501 is concerned, at
any time in the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
For the purposes of this Indenture, "U.S. Government Obligations"
means direct noncallable obligations of, or noncallable obligations the payment
of principal of and interest on which is guaranteed by, the United States of
America, or to the payment of which obligations or guarantees the full faith and
credit of the United States of America is pledged, or beneficial interests in a
trust the corpus of which consists exclusively of money or such obligations or a
combination thereof.
If any Outstanding Securities of such series are to be redeemed prior
to their Stated Maturity, whether pursuant to any optional redemption provisions
or in accordance with any mandatory sinking fund requirement, the trust
agreement
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referred to in subclause (ii) of clause (a) of this Section shall provide
therefor and the Company shall make such arrangements as are satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to the Outstanding Securities of such series pursuant to this Section
401, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and,
except for a discharge pursuant to subclause (i) of clause (a) of this Section,
the obligations of the Company under Sections 305, 306, 404, 601, 607, 610(e)
1001 and 1002 and the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money. Subject to the provisions
---------------------------
of the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest and Additional Amounts for the
payment of which such money has been deposited with the Trustee.
SECTION 403. Discharge of Liability on Securities of Any Series. If
---------------------------------------------------
this Section is specified, as contemplated by Section 301, to be applicable to
Securities of any series, the Company shall be deemed to have paid and
discharged the entire indebtedness on all the Outstanding Securities of such
series, the obligation of the Company under this Indenture and the Securities of
such series to pay the principal of (and premium, if any) and interest on
Securities of such series shall cease, terminate and be completely discharged
and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging such satisfaction and discharge, when
(a) the Company has complied with the provisions of Section 401 of
this Indenture (other than any additional conditions specified pursuant to
Sections 301 and 401(c) and except that the opinion referred to in Section
401(e) shall state that it is based on a ruling by the Internal Revenue
Service or other change since the date hereof under applicable Federal
income tax law) with respect to all Outstanding Securities of such series;
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(b) the Company has delivered to the Trustee a Company Request
requesting such satisfaction and discharge;
(c) the Company has complied with any other conditions specified
pursuant to Section 301 to be applicable to the satisfaction and discharge
of Securities of such series pursuant to this Section 403; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of the
indebtedness on the Outstanding Securities of such series have been
complied with.
Upon the satisfaction of the conditions set forth in this Section with
respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided that the Company shall not be discharged
--------
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (c) of the definition thereof if such
obligations continue to be valid obligations of the Company under applicable law
or pursuant to Section 305 or 306.
SECTION 404. Reinstatement. If the Trustee or Paying Agent is unable
--------------
to apply any money or U.S. Government Obligations deposited with respect to
Securities of any series in accordance with Section 401 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture with respect to the Securities of
such series and the Securities of such series shall be revived and reinstated as
though no deposit had occurred pursuant to Section 401 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 401; provided, however, that if the
-------- -------
Company has made any payment of principal of (or premium, if any), or interest
on and any Additional Amounts with respect to any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
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ARTICLE V
Remedies
--------
SECTION 501. Events of Default. "Event of Default", wherever used
------------------
herein with respect to Securities of any series, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless it is either inapplicable to a
particular series or it is specifically deleted or modified in or pursuant to
the supplemental indenture or Board Resolution establishing such series of
Securities, or in the form of Security for such series:
(a) default in the payment of any interest or any Additional Amounts
upon any Security of that series when such interest or Additional Amounts
become due and payable, and continuance of such default for a period of 30
days;
(b) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity;
(c) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series;
(d) default in the performance or breach of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities other
than that series), and continuance of such default or breach for a period
of 60 days after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of all Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder;
(e) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or
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order adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under any applicable Federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of 60
consecutive days;
(f) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it, of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(g) any other Event of Default provided with respect to Securities of
that series.
Notwithstanding the foregoing provisions of this Section 501, if the
principal of (and premium, if any) or any interest on, or Additional Amounts
with respect to, any Security is payable in a currency or currencies (including
a composite currency or currency unit) other than Dollars and such currency (or
currencies) is (or are) not available to the Company for making payment thereof
due to the imposition of exchange controls or other circumstances beyond the
control of the Company (a "Conversion Event"), the Company will be entitled to
satisfy its obligations to Holders of the Securities by making such payment in
Dollars in an amount equal to the Dollar equivalent of the amount payable in
such
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other currency, as determined by the Company by reference to the noon buying
rate in The City of New York for cable transfers for such currency ("Exchange
Rate"), as such Exchange Rate is certified for customs purposes by the Federal
Reserve Bank of New York on the date of such payment, or, if such rate is not
then available, on the basis of the most recently available Exchange Rate.
Notwithstanding the foregoing provisions of this Section 501, any
payment made under such circumstances in Dollars where the required payment is
in a currency other than Dollars will not constitute an Event of Default under
this Indenture. Promptly after the occurrence of a Conversion Event, the
Company shall give written notice thereof to the Trustee; and the Trustee,
promptly after receipt of such notice, shall give notice thereof in the manner
provided in Section 106 to the Holders. Promptly after the making of any
payment in Dollars as a result of a Conversion Event, the Company shall give
notice in the manner provided in Section 106 to the Holders, setting forth the
applicable Exchange Rate and describing the calculation of such payments.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If
---------------------------------------------------
an Event of Default with respect to any Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of (a) the series affected by such default (in the case of an Event of Default
described in clause (a), (b), (c), (d) or (g) of Section 501) or (b) all series
of Securities (subject to the immediately following sentence, in the case of
other Events of Default) may declare the principal amount (or, if any such
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all of the Securities
of the series affected by such default or all series, as the case may be, to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. If an
Event of Default described in clause (e) or (f) of Section 501 shall occur, the
principal amount of the Outstanding Securities of all series ipso facto shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. At any time after such a declaration
of acceleration with respect to Securities of any series (or of all series, as
the case may be) has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
Securities of that series (or of all series, as the case may be), by written
notice to the Company
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and the Trustee, may rescind and annul such declaration and its consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest on, and any Additional Amounts
with respect to, all Securities of that series (or of all series, as
the case may be);
(ii) the principal of (and premium, if any, on) any Securities
of that series (or of all series, as the case may be) which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities (in the case of Original Issue Discount Securities, the
Securities' Yield to Maturity);
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest and any Additional Amounts at the rate
or rates prescribed therefor in such Securities (in the case of
Original Issue Discount Securities, the Securities' Yield to
Maturity);
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default with respect to Securities of that series
(or of all series, as the case may be), other than the non-payment of the
principal of Securities of that series (or of all series, as the case may
be) which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if
- -------
(a) default is made in the payment of any installment of interest on,
or any Additional Amounts with respect to, any Security of any series when
such interest or Additional Amounts shall have become due and payable and
such default continues for a period of 30 days; or
44
<PAGE>
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on any
overdue interest and Additional Amounts, at the rate or rates prescribed
therefor in such Securities (or in the case of Original Issue Discount
Securities, the Securities' Yield to Maturity), and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
---------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal (or lesser amount in the case of
Original Issue Discount Securities) of the Securities 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 on the Company for the payment of
overdue principal (premium, if any), interest or Additional Amounts) shall be
entitled and
45
<PAGE>
empowered, by intervention in such proceeding or otherwise,(a) to file and prove
a claim for the whole amount of principal (or lesser amount in the case of
Original Issue Discount Securities) (and premium, if any) and interest and any
Additional Amounts owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and (b) to collect and
receive any moneys, or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceedings; provided, however,
-------- -------
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities. All rights of action and claims under this Indenture or the
- -----------
Securities may be prosecuted and enforced by the Trustee without possession of
any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by
-------------------------------
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any), interest or any
46
<PAGE>
Additional Amounts, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest and any Additional Amounts
on the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
To the fullest extent allowed under applicable law, if for the purpose
of obtaining judgment against the Company in any court it is necessary to
convert the sum due in respect of the principal of (or premium, if any) or
interest on the Securities of any series (the "Required Currency") into the
currency (a "Judgment Currency") other than United States dollars, the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Business Day next preceding
that on which final judgment is given. Neither the Company nor the Trustee shall
be liable for any shortfall nor shall it benefit from any windfall in payments
to Holders of Securities under this Section caused by a change in exchange rates
between the time the amount of a judgment against it is calculated as above and
the time the Trustee converts the Judgment Currency into the Required Currency
to make payments under this Section to Holders of Securities, but payment of
such judgment shall discharge all amounts owed by the Company on the claim or
claims underlying such judgment.
SECTION 507. Limitation on Suits. No Holder of any Security of any
--------------------
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(a) an Event of Default with respect to Securities of such series
shall have occurred and be continuing and such Holder has previously given
written notice to the Trustee of such continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall
47
<PAGE>
have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders To Receive Principal,
----------------------------------------------------
Premium and Interest. Notwithstanding any other provision in this Indenture,
- ---------------------
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on and any Additional Amounts with respect to
such Security on the Stated Maturity or Maturities expressed in such Security
(or, in the case of redemption or repayment at the option of the Holder, on the
Redemption Date or the repayment date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
-----------------------------------
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding has been instituted.
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<PAGE>
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
-------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of
-----------------------------
the Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders. With respect to Securities of any
-------------------
series, the holders of a majority in principal amount of the Outstanding
Securities of such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, relating to or arising
under an Event of Default described in clauses (a), (b), (c), (d) or (g) of
Section 501, and with respect to all Securities the Holders of a majority in
principal amount of all Outstanding Securities shall have the right to direct
the time, method and place of conducting any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, not relating to or
arising under such an Event of Default, provided that in each such case
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults. The Holders of a majority in
------------------------
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder
49
<PAGE>
with respect to such series and its consequences, and the Holders of a majority
in principal amount of all Outstanding Securities may on behalf of the Holders
of all Securities waive any other past default hereunder and its consequences,
except in each case a default
(a) in the payment of the principal of (or premium, if any) or
interest on, or any Additional Amounts with respect to, any Security; or
(b) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs. All parties to this Indenture
----------------------
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities of any series,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest on, or any Additional Amounts
with respect to, any Security on or after the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws. The Company
---------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent
50
<PAGE>
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE VI
The Trustee
-----------
SECTION 601. Certain Duties and Responsibilities. (a) Except during
------------------------------------
the continuance of an Event of Default with respect to the Securities of any
series,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform on their face to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing with
to the Securities of any series, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(i) this Subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer,
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<PAGE>
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series or of all series, determined as provided in
Section 512, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to
the Securities of such series; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(v) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
(vi) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 602. Notice of Defaults. Within 90 days after the occurrence
-------------------
of any default hereunder with respect to the Securities of any series, the
Trustee shall give notice of such default hereunder known to the Trustee to all
Holders of Securities of such series in the manner provided in Section 106,
unless such default shall have been cured or waived; provided, however, that
-------- -------
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on, or any Additional Amounts with respect to, any Security
of such series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders of Securities of such series; and provided, further, that in
-------- -------
52
<PAGE>
the case of any default of the character specified in Section 501(d) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.
SECTION 603. Certain Rights of Trustee. Subject to the
--------------------------
provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion,
53
<PAGE>
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
-------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities. The Trustee, any Authenticating
--------------------
Agent, any Paying Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust. Money held by the Trustee in trust
--------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement. The Company agrees
-------------------------------
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which completion shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
54
<PAGE>
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the reasonable
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, damages, claims, liability or expense of whatsoever kind incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of, premium, if any, or interest, if
any, on, or any Additional Amounts with respect to, particular Securities. Any
expenses and compensation for any services rendered by the Trustee after the
occurrence of an Event of Default specified in clause (e) or (f) of Section 401
shall constitute expenses and compensation for services of administration under
all applicable Federal or state bankruptcy, insolvency, reorganization or other
similar laws.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests. (a) If the
----------------------------------------
Trustee has or shall acquire any conflicting interest, as defined in this
Section, with respect to the Securities of any series, it shall, within 90 days
after ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign with respect to the Securities of that series in
the manner and with the effect hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days after the expiration of such 90-
day period, transmit by mail to all Holders of Securities of that
55
<PAGE>
series, as their names and addresses appear in the Security Register, notice of
such failure.
(c) For the purposes of this Section, the term "conflicting interest"
shall have the meaning specified in Section 310(b) of the Trust Indenture Act
and the Trustee shall comply with Section 310(b) of the Trust Indenture Act;
provided that there shall be excluded from the operation of Section 310(b)(1) of
- --------
the Trust Indenture Act with respect to the Securities of any series the
Indenture between the Company and the Trustee relating to the Company's
subordinated debt securities, this Indenture with respect to the Securities of
any series other than that series and any other indenture or indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met.
For purposes of the preceding sentence, the optional provision permitted by the
second sentence of Section 310(b)(9) of the Trust Indenture Act shall be
applicable.
SECTION 609. Corporate Trustee Required; Eligibility. There shall at
----------------------------------------
all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
SECTION 610. Resignation and Removal; Appointment of Successor. (a)
--------------------------------------------------
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the resigning Trustee within
56
<PAGE>
30 days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 608(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months; or
(ii) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder of Securities; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to any or
all series of Securities and the appointment of a successor Trustee or Trustees
with respect to such series.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and such successor Trustee
or Trustees shall comply with the applicable requirements of Section 611. If,
within
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<PAGE>
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 611, become the successor Trustee with respect to the Securities of such
series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor. (a) In case of
---------------------------------------
the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee
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and each successor Trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (i) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (ii) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- ---------
with which it may be
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consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company. The
--------------------------------------------------
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship described in Section 311(b) of the Trust Indenture
Act. A Trustee who has resigned or been removed shall be subject to Section
311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent. The Trustee may
------------------------------------
appoint an Authenticating Agent or Agents with respect to one or more series of
securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue and upon
exchange, registration of transfer or partial redemption or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of
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condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of securities may resign at any
time by giving written notice thereof to the Trustee for such series and to the
Company. The Trustee for any series may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time such Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, the Trustee
for such series may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
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"This is one of the Securities of the series designated therein and
referred to in the within-mentioned Indenture.
[ ]
AS TRUSTEE
By ,
as Authenticating Agent
By ,
Authorized Signatory"
Notwithstanding any provision of this Section 614 to the contrary, if at any
time any Authenticating Agent appointed hereunder with respect to any series of
Securities shall not also be acting as the Security Registrar hereunder with
respect to any series of Securities, then, in addition to all other duties of an
Authenticating Agent hereunder, such Authenticating Agent shall also be
obligated: (a) to furnish to the Security Registrar promptly all information
necessary to enable the Security Registrar to maintain at all times an accurate
and current Security Register; and (b) prior to authenticating any Security
denominated in a foreign currency, to ascertain from the Company the units of
such foreign currency that are required to be determined by the Company pursuant
to Section 302.
ARTICLE VII
Holder's Lists and Reports by Trustee and Company
-------------------------------------------------
SECTION 701. Company To Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders. With respect to each series of Securities, the Company will furnish or
- --------
cause to be furnished to the Trustee:
(a) semiannually, not more than 15 days after each Regular Record Date
relating to that series (or, if there is no Regular Record Date relating to
that series, on June 30 and December 31), a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders
of that series as of such dates; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content, such list to be dated as of a date not more than
15 days prior to the time such list is furnished;
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provided that so long as the Trustee is the Security Registrar, the Company
- --------
shall not be required to furnish or cause to be furnished such a list to the
Trustee.
SECTION 702. Preservation of Information; Communications to Holders.
-------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders of each series received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy any list furnished to
it as provided in Section 701 upon receipt of a new list so furnished.
(b) Holders of Securities may communicate pursuant to the Trust
Indenture Act with other Holders with respect to their rights under this
Indenture or under the Securities.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee. (a) Within 60 days after January
-------------------
31 of each year commencing with the year 1999, the Trustee shall transmit by
mail to Holders a brief report dated as of such reporting date that complies
with Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) of the Trust
Indenture Act.
(c) Reports pursuant to this Section shall be transmitted by mail:
(i) to all Holders of Securities, as the names and addresses of such
Holders appear in the Security Register;
(ii) to such Holders of Securities as have, within the two years
preceding such transmissions, filed their names and addresses with the
Trustee for that purpose; and
(iii) except in the case of reports pursuant to subsection (b) of this
Section, to each Holder of a
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Security whose name and address is preserved at the time by the Trustee, as
provided in Section 702(a).
(d) A copy of each report pursuant to Subsection (a) or (b) of this
Section 703 shall, at the time of its transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
SECTION 704. Reports by Company. The Company shall file with the
-------------------
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 12 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, and shall
otherwise comply with Section 314(a) of the Trust Indenture Act.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
-----------------------------------------------------
The Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless:
(a) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized
and existing under the laws of the United States or any state thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of (and premium, if any) and interest (including all Additional Amounts, if
any) on all the Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an
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Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Person Substituted. Upon any consolidation by
-----------------------------
the Company with or merger by the Company into any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of such lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 901. Supplemental Indentures Without Consent of Holders.
---------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series), to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or otherwise secure any series of the Securities or to
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surrender any right or power herein conferred upon the Company;
(c) to add any additional Events of Default with respect to all or any
series of the Securities (and, if such Event of Default is applicable to
less than all series of Securities, specifying the series to which such
Event of Default is applicable);
(d) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of securities; provided that any
--------
such addition, change or elimination shall become effective only when there
is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is adversely affected by such addition or
such change in or elimination of such provision;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301 and to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to
provide for certificated Securities in addition to or in place of
uncertificated Securities;
(f) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 401 or Section
403; provided, however, that any such action shall not adversely affect the
-------- -------
interest of the Holders of Securities of such series or any other series of
Securities in any material respect;
(h) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b);
(i) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that such action under
--------
this clause shall not adversely affect the interests of the Holders of
Securities of any series in any material respect;
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(j) to provide for the terms and conditions of conversion into Common
Stock or other Marketable Securities of the Securities of any series which
are convertible into Common Stock or other Marketable Securities, if
different from those set forth in Article Fourteen; or
(k) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act.
SECTION 902. Supplemental Indentures with Consent of Holders. With
------------------------------------------------
the consent of the Holders of a majority in principal amount of the Outstanding
Securities of each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
-------- -------
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon, any Additional
Amounts with respect thereto or any premium payable upon the redemption
thereof, or change any obligation of the Company to pay Additional Amounts
(except as contemplated by Section 801(a) and permitted by Section 901(a)),
or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration
of the Maturity thereof pursuant to Section 502, or adversely affects any
right of repayment at the option of the Holder of any security, or change
any Place of Payment where, or the coin or currency or currencies
(including composite currencies or currency units) in which, any Security
or any premium or any interest thereon or Additional Amounts with respect
thereto is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption or repayment at the option of the Holder, on
or after the Redemption Date or the Repayment Date, as the case may be);
(b) reduce the percentage in principal amount of Outstanding
Securities, the consent of whose Holders is
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required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture; or
(c) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide with
respect to any particular series the right to condition the effectiveness
of any supplemental indenture as to that series on the consent of the
Holders of a specified percentage of the aggregate principal amount of
Outstanding Securities of such series (which provision may be made pursuant
to Section 301 without the consent of any Holder) or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
-------- -------
the comment of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1010, or the
deletion of this proviso, in accordance with the requirements of Sections
611(b) and 901(f).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures. In executing, or
-------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
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SECTION 904. Effect of Supplemental Indentures. Upon the execution
----------------------------------
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
------------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
---------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE X
Covenants
---------
SECTION 1001. Payment of Principal, Premium and Interest. The
-------------------------------------------
Company covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay the principal of (and premium, if any), interest
on and any Additional Amounts with respect to the Securities of that series in
accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency. The Company will
--------------------------------
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
such office or agency shall be the principal office of [ ],
in the City of New York, which, on the date hereof, is located at [ ].
The Company will give prompt written notice to the Trustee of
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the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency. The Company hereby designates the Corporate Trust Office
of the Trustee as one such office or agency of the Company in accordance with
Section 305.
SECTION 1003. Money for Securities Payments To Be Held in Trust. If
--------------------------------------------------
the Company shall at any time act as its own Paying Agent with respect to any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on or any Additional Amounts with respect to
any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, the Company will, on or before each due date of the
principal of (and premium, if any) or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal of (and
premium, if any), interest on or any Additional Amounts with respect to
Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any), interest on or any Additional
Amounts with respect to the Securities of that series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for three
years after such principal (and premium, if any) or interest has become due and
payable shall, unless otherwise required by mandatory provisions of applicable
escheat, or abandoned or unclaimed property law, be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
-------- -------
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper in The Borough of Manhattan, The City of New York, notice
that such money remains unclaimed and that, after a date specified herein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will, unless otherwise
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required by mandatory provisions of applicable escheat, or abandoned or
unclaimed property law, be repaid to the Company.
SECTION 1004. Existence. Subject to Article VII, the Company will do
----------
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
SECTION 1005. Maintenance of Properties. The Company will cause all
--------------------------
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent that
-------- -------
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1006. Limitation on Sale/Leaseback Transactions. The Company
------------------------------------------
shall not, and shall not permit any Restricted Subsidiary to, enter into any
arrangement providing for the leasing by the Company or any Restricted
Subsidiary for a period of more than three years, of any real or tangible
personal property, which property has been or is to be sold or transferred by
the Company or such Restricted Subsidiary to such Person in contemplation of
such leasing (a "Sale/Leaseback Transaction") with any Person (other than the
Company or a Restricted Subsidiary) unless:
(a) the Company or such Restricted Subsidiary would, at the time of
entering into such sale/leaseback Transaction, be entitled to incur
Indebtedness, in a principal amount equal to the Attributable Indebtedness
with respect to such Sale/Leaseback Transaction, secured by a Lien on the
property subject to such Sale/Leaseback Transaction pursuant to Section
1007 without equally and ratably securing the Securities pursuant to such
Section;
(b) after the Issue Date and within a period commencing six months
prior to the consummation of such Sale/Leaseback Transaction and ending six
months after the consummation thereof, the Company or such Restricted
Subsidiary shall have expended for property used or to be used in the
ordinary course of business of the Company and the Restricted Subsidiaries
an amount equal to all or
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a portion of the Net Proceeds of such Sale/Leaseback Transaction and the
Company shall have elected to designate such amount as a credit against
such Sale/Leaseback Transaction (with any such amount not being so
designated to be applied as set forth in clause (c) below); or
(c) the Company, during the 12-month period after the effective date
of such Sale/Leaseback Transaction, shall have applied to the voluntary
defeasance or retirement of Securities or any Pari Passu Indebtedness an
amount equal to the greater of the Net Proceeds of the sale or transfer of
the property leased in such Sale/Leaseback Transaction and the fair value,
as determined by the Board of Directors of the Company, of such property at
the time of entering into such Sale/Leaseback Transaction (in either case
adjusted to reflect the remaining term of the lease and any amount expended
by the Company as set forth in clause (b) above), less an amount equal to
the principal amount of Securities and Pari Passu Indebtedness voluntarily
defeased or retired by the Company within such 12-month period and not
designated as a credit against any other Sale/Leaseback Transaction entered
into by the Company or any Subsidiary during such period.
SECTION 1007. Limitation on Liens. No provision of this Indenture or
--------------------
the Securities shall in any way restrict or prevent the Company or any
Restricted Subsidiary from issuing, assuming, guaranteeing or otherwise
incurring any Indebtedness; provided, however, that the Company shall not, and
-------- -------
shall not permit any Restricted Subsidiary to, issue, assume or guarantee any
Indebtedness secured by any Lien on any property or asset now owned or hereafter
acquired by the Company or such Restricted Subsidiary without making effective
provision whereby any and all Securities then or thereafter outstanding will be
secured by a Lien equally and ratably with any and all other obligations thereby
secured for so long as any such obligations shall be so secured.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary may,
without so securing the Securities, issue, assume or guarantee Indebtedness
secured by the following Liens:
(a) Liens existing on the Issue Date or provided for under the terms
of agreements existing on the Issue Date;
(b) Liens on property securing (i) all or any portion of the cost of
acquiring, constructing, altering, improving or repairing any property or
assets, real or personal, or improvements used or to be used in connection
with the property of the Company or Restricted Subsidiaries or (ii)
Indebtedness incurred by the Company
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or any Restricted Subsidiary to provide funds for the activities set forth
in clause (i) above;
(c) Liens securing Indebtedness owed by a Restricted Subsidiary to
the Company or to any other Restricted Subsidiary;
(d) Liens on the property of any Person existing at the time such
Person becomes a Subsidiary of the Company and not incurred as a result of
(or in connection with or in anticipation of) such Person becoming a
Subsidiary of the Company; provided that such Liens do not extend to or
--------
cover any property or assets of the Company or any of its Subsidiaries
other than the property so acquired;
(e) Liens on any property securing (i) Indebtedness incurred in
connection with the construction, installation or financing of pollution
control or abatement facilities or other forms of industrial revenue bond
financing or (ii) Indebtedness issued or guaranteed by the United States or
any State thereof or any department, agency or instrumentality of either;
(f) any Lien extending, renewing or replacing (or successive
extensions, renewals or replacements of) any Lien of any type permitted
under clauses (a) through (e) above; provided that such Lien extends to or
--------
covers only the property that is subject to the Lien being extended,
renewed or replaced;
(g) any Ordinary Course Lien arising, but only so long as continuing,
in the ordinary course of business of the Company and the Restricted
Subsidiaries; or
(h) Liens (exclusive of any Lien of any type otherwise permitted
under clauses (a) through (g) above) securing Indebtedness of the Company
or any Restricted Subsidiary in an aggregate principal amount which,
together with the aggregate amount of Attributable Indebtedness deemed to
be outstanding in respect of all Sale/Leaseback Transactions entered into
pursuant to clause (a) of Section 1006 (exclusive of any such
Sale/Leaseback Transactions otherwise permitted under clauses (a) through
(g) above), does not at the time such Indebtedness is incurred exceed 15%
of the Consolidated Tangible Assets of the Company (as shown in the most
recent audited consolidated balance sheet of the Company and its
Subsidiaries).
SECTION 1008. Payment of Taxes and Other Claims. The Company will
----------------------------------
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all
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material taxes, assessments and governmental charges levied or imposed upon the
Company or any Subsidiary or upon the income, profits or property of the Company
or any Subsidiary, and (b) all material lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
-------- -------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1009. Statement by Officers as to Default. The Company will
------------------------------------
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof so long as any Security is outstanding
hereunder, an Officers' Certificate, stating that a review of the activities of
the Company during such year and of performance under this Indenture has been
made under the supervision of the signers thereof and whether or not to the best
of their knowledge, based upon such review, the Company is in default in the
performance, observance or fulfillment of any of its covenants and other
obligations under this Indenture, and if the Company shall be in default,
specifying each such default known to them and the nature and status thereof.
One of the officers signing the Officers' Certificate delivered pursuant
to this Section 1009 shall be the principal executive, financial or accounting
officer of the Company.
For purposes of this Section, such compliance shall be determined
without regard to any period of grace or requirement of notice provided under
this Indenture.
SECTION 1010. Waiver of Certain Covenants. The Company may omit in
----------------------------
any particular instance to comply with any covenant or condition set forth in
Sections 1005 to 1008, inclusive, with respect to the Securities of any series,
or any covenant added for the benefit of any series of Securities as
contemplated by Section 301 (unless otherwise specified pursuant to Section 301)
if before or after the time for such compliance the Holders of a majority in
principal amount of the Outstanding Securities of such series affected by such
omission (acting as one class) shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant, or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
SECTION 1011. Additional Amounts. If the Securities of a series
-------------------
provide for the payment of Additional
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Amounts, the Company will pay to the Holder of any Security of such series
Additional Amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
for in this Section to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section and express mention of the payment of Additional Amounts (if applicable)
in any provisions hereof shall not be construed as excluding Additional Amounts
in those provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company shall furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities and the Company will pay to such Paying Agent the
Additional Amounts required by this Section. The Company covenants to indemnify
the Trustee and any Paying Agent for, and to hold them harmless against any
loss, liability or expense reasonably incurred without negligence or bad faith
on their part arising out of or in connection with actions taken or omitted by
any of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
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ARTICLE XI
Redemption of Securities
------------------------
SECTION 1101. Applicability of Article. Securities of any series
-------------------------
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election To Redeem; Notice to Trustee. The election of
--------------------------------------
the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of less than all the
Securities of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date, the principal amount of Securities of such series to be redeemed, the
Redemption Price of such Securities and the amount of any accrued interest and
Additional Amounts payable with respect thereto on the Redemption Date. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed. If
--------------------------------------------------
less than all the Securities of any series are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, pro rata or by lot or by such other method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series or of the
principal amount of global Securities of such series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the
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redemption of Securities shall relate, in the case of any Securities redeemed or
to be redeemed only in part, to the portion of the principal amount of such
Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be
---------------------
given in the manner provided in Section 107 to each Holder of Securities to be
redeemed not less than 30 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price, including each component thereof;
(c) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the case;
(g) the aggregate principal amount of Securities being redeemed;
(h) the "CUSIP" number of the Securities, if applicable; and
(i) such other information as the Trustee in its reasonable discretion
deems appropriate.
A notice of redemption as contemplated by Section 107 need not identify
particular Securities to be redeemed. Notice of redemption of Securities to be
redeemed at the election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price. On or before any
----------------------------
Redemption Date, the Company shall deposit with the
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Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, and any Additional
Amounts with respect to, all the Securities which are to be redeemed on that
date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
--------------------------------------
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price, accrued interest on Additional
Amounts, if any, payable) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest (and any Additional Amounts) to the Redemption Date; and
provided, however, that installments of interest whose Stated Maturity is on or
- -------- -------
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security or, in the case of Original Issue Discount Securities,
the Securities' Yield to Maturity.
SECTION 1107. Securities Redeemed in Part. Any Security which is to
----------------------------
be redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities of the same series and Stated Maturity, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 1108. Purchase of Securities. Unless otherwise specified as
-----------------------
contemplated by Section 301, the Company and any Affiliate of the Company may at
any time
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purchase or otherwise acquire Securities in the open market or by private
agreement. Such acquisition shall not operate as or be deemed for any purpose to
be a redemption of the indebtedness represented by such Securities. Any
Securities purchased or acquired by the Company may be delivered to the Trustee
and, upon such delivery, the indebtedness represented thereby shall be deemed to
be satisfied. Section 309 shall apply to all Securities so delivered.
SECTION 1109. Rescission of Redemption. In the event that this
-------------------------
Section 1109 is specified to be applicable to a series of Securities pursuant to
Section 301 and a Redemption Rescission Event shall occur following any day on
which a notice of redemption shall have been given pursuant to Section 1104
hereof but at or prior to the time and date fixed for redemption as set forth in
such notice of redemption, the Company may, at its sole option, at any time
prior to the earlier of (i) the close of business on that day which is two
Trading Days following such Redemption Rescission Event and (ii) the time and
date fixed for redemption as set forth in such notice of redemption shall have
related by making a public announcement of such rescission (the date on which
such public announcement shall have been made being hereinafter referred to as
the "Rescission Date"). The Company shall be deemed to have made such
announcement if it shall issue a release to the Dow Jones New Service, Reuters
Information Services or any successor news wire service. From and after the
making of such announcement, the Company shall have no obligation to redeem
Securities called for redemption pursuant to such notice of redemption or to pay
the Redemption Price therefor and all rights of Holders of Securities shall be
restored as if such notice of redemption had not been given. As promptly as
practicable following the making of such announcement, the Company shall
telephonically notify the Trustee and the Paying Agent of such rescission. The
Company shall give notice of any such rescission by first-class mail, postage
prepaid, mailed as promptly as practicable but in no event later than the close
of business on that day which is five Trading Days following the Rescission Date
to each Holder of Securities at the close of business on the Rescission Date, to
any other Person that was a Holder of Securities and that shall have surrendered
Securities for conversion following the giving of notice of the subsequently
rescinded redemption and to the Trustee and the Paying Agent. Each notice of
rescission shall (w) state that the redemption described in the notice of
redemption has been rescinded, (x) state that any Converting Holder shall be
entitled to rescind the conversion of Securities surrendered for conversion
following the day on which notice of redemption was given but on or prior to the
date of the mailing of the Company's notice of rescission, (y) be accompanied by
a form prescribed by the Company to be used by any Converting Holder rescinding
the conversion of
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Securities so surrendered for conversion (and instructions for the completion
and delivery of such form, including instructions with respect to any payment
that may be required to accompany such delivery) and (z) state that such form
must be properly completed and received by the Company no later than the close
of business on a date that shall be 15 Trading Days following the date of the
mailing of such notice of rescission.
SECTION 1110. Repayment at the Option of Holders.
-----------------------------------
Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in accordance with
the terms of the Securities of such series. The repayment of any principal
amount of Securities pursuant to such option of the Holder to require repayment
of Securities before their stated Maturity, for purposes of Section 309 shall
not operate as a payment, redemption or satisfaction of the indebtedness
represented by such Securities unless and until the Company, at its option,
shall deliver or surrender the same to the Trustee with a directive that such
Securities be canceled. Notwithstanding anything to the contrary contained in
this Section 1110, in connection with any repayment of Securities, the Company
may arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
ARTICLE XII
Sinking Funds
-------------
SECTION 1201. Applicability of Article. The provisions of this
-------------------------
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
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applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
------------------------------------------------------
The Company (a) may deliver Outstanding Securities of a series (other than any
previously called for redemption), and (b) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less
------------------------------------------
than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE XIII
Meetings of Holders of Securities
---------------------------------
SECTION 1301. Purposes for Which Meetings May Be Called. A meeting
------------------------------------------
of Holders of Securities of any or all series may be called at any time and from
time to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or
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other action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1302. Call, Notice and Place of Meetings. (a) The Trustee
-----------------------------------
may at any time call a meeting of Holders of Securities of any series for any
purpose specified in Section 1301, to be held at such time and at such place in
Atlanta, Georgia, in The Borough of Manhattan, The City of New York, or in any
other location, as the Trustee shall determine. Notice of every meeting of
Holders of Securities of any series, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 107, not less than 20
nor more than 180 days prior to the date fixed for the meeting.
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 30 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or
the Holders of Securities of such series in the amount above specified, as the
case may be, may determine the time and the place in Atlanta, Georgia, or in The
Borough of Manhattan, The City of New York, for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in Subsection (a)
of this Section.
SECTION 1303. Persons Entitled To Vote at Meetings. To be entitled
-------------------------------------
to vote at any meeting of Holders of Securities of any series, a Person shall be
(a) a Holder of one or more Outstanding Securities of such series, or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series 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 1304. Quorum; Action. The Persons entitled to vote a
---------------
majority in aggregate principal amount of the Outstanding Securities of a series
shall constitute a quorum for a meeting of Holders of Securities of such series.
In the absence of a quorum within 30 minutes of the time appointed
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for any such meeting, the meeting shall, if convened at the request of Holders
of Securities of such series, be dissolved. In any other case, the meeting may
be adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such adjourned meeting. Subject to
Section 1305(d), notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1302(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly that Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series; provided, however, that, except as limited by the proviso to Section
-------- -------
902, any resolution with respect to any request, demand, authorization,
direction, notice, consent or waiver which this Indenture expressly provides may
be made, given or taken by the Holders of a specified percentage that is less
than a majority in aggregate principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in aggregate principal amount of the Outstanding
Securities of that series.
Except as limited by the proviso to Section 902, any resolution passed
or decision taken at any meeting of Holders of Securities of any series duly
held in accordance with this Section shall be binding on all the Holders of
Securities of such series, whether or not present or represented at the meeting.
SECTION 1305. Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings. (a) The holding of Securities shall be proved in the manner
- ------------
specified in Section 105 and the appointment of any proxy shall be proved in the
manner specified in Section 105. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 105 or other proof.
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(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1302(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series and each
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
--------
however, that no vote shall be cast or counted at any meeting in respect of any
- -------
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or as a proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1302 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 1306. Counting Votes and Recording Action of Meetings. The
------------------------------------------------
vote upon any resolution submitted to any meeting of Holders of Securities of
any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate, of
the proceedings of each meeting of Holders of Securities of any series shall be
prepared by the secretary of the meeting and there shall be attached to such
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 such
notice was given as provided in Section 1302 and, if applicable, Section 1304.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and
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secretary of the meeting and one such copy shall be delivered to the Company,
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
ARTICLE XIV
Conversion
----------
Section 1401. Conversion Privilege. If so provided in a Board
--------------------
Resolution with respect to the Securities of any series, the Holder of a
Security of such series shall have the right, at such Holder's option, to
convert, in accordance with the terms of such series of Securities and this
Article XIV, all or any part (in a denomination of, unless otherwise specified
in a Board Resolution or supplemental indenture with respect to Securities of
such series, $1,000 in principal amount or any integral multiple thereof) of
such Security into shares of Common Stock or other Marketable Securities
specified in such Board Resolution at any time or, as to any Securities called
for redemption, at any time prior to the time and date fixed for such redemption
(unless the Company shall default in the payment of the Redemption Price, in
which case such right shall not terminate at such time and date). The provisions
of this Article Fourteen shall not be applicable to the Securities of a series
unless otherwise specified in a Board Resolution with respect to the Securities
of such series.
Section 1402. Conversion Procedure; Rescission of Conversion;
-----------------------------------------------
Conversion Price; Fractional Shares. (a) Each Security to which this Article
- -----------------------------------
is applicable shall be convertible at the office of the Conversion Agent, and at
such other place or places, if any, specified in a Board Resolution with respect
to the Securities of such series, into fully paid and nonassessable shares
(calculated to the nearest 1/100th of a share) of Common Stock or other
Marketable Securities. The Securities will be converted into shares of Common
Stock or such other Marketable Securities at the Conversion Price therefor. No
payment or adjustment shall be made in respect of dividends on the Common Stock
or such other Marketable Securities, or accrued interest on a converted Security
except as described in Section 1409. The Company may, but shall not be required,
in connection with any conversion of Securities, to issue a fraction of a share
of Common Stock or of such other Marketable Security, and, if the Company shall
determine not to issue any such fraction, the Company shall, subject to Section
1403(4), make a cash payment (calculated to the nearest cent) equal to such
fraction multiplied by the Closing
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Price of the Common Stock or such other Marketable Security on the last Trading
Day prior to the date of conversion.
(b) Before any Holder of a Security shall be entitled to convert the
same into Common Stock or other Marketable Securities, such Holder shall
surrender such Security duly endorsed to the Company or in blank, at the office
of the Conversion Agent or at such other place or places, if any, specified in a
Board Resolution with respect to the Securities of such series, and shall give
written notice to the Company at said office or place that he elects to convert
the same and shall state in writing therein the principal amount of Securities
to be converted and the name or names (with addresses) in which he wishes the
certificate or certificates for Common Stock or for such other Marketable
Securities to be issued; provided, however, that no Security or portion thereof
-------- -------
shall be accepted for conversion unless the principal amount of such Security or
such portion, when added to the principal amount of all other Securities or
portions thereof then being surrendered by the Holder thereof for conversion,
exceeds the then effective Conversion Price with respect thereto. If more than
one Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares of Common Stock or such other Marketable Securities
which shall be deliverable upon conversion shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof to
the extent permitted thereby) so surrendered. Subject to the next succeeding
sentence, the company will, as soon as practicable thereafter, issue and deliver
at said office or place to such Holder of a Security, or to his nominee or
nominees, certificates for the number of full shares of Common Stock or other
Marketable Security to which he shall be entitled as aforesaid, together,
subject to the last sentence of paragraph (a) above, with cash in lieu of any
fraction of a share to which he would otherwise be entitled. The Company shall
not be required to deliver certificates for shares of Common Stock or other
Marketable Securities while the stock transfer books for such stock or the
transfer books for such Marketable Securities, as the case may be, or the
Security Register are duly closed for any purpose, but certificates for shares
of Common Stock or other Marketable Securities shall be issued and delivered as
soon as practicable after the opening of such books or Security Register. A
Security shall be deemed to have been converted as of the close of business on
the date of the surrender of such Security for conversion as provided above, and
the person or persons entitled to receive the Common Sock or other Marketable
Securities issuable upon such conversion shall be treated for all purposes as
the record Holder or Holders of such Common Stock or other Marketable Securities
as of the close of business on such date. In case any Security shall be
surrendered for partial
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conversion, the Company shall execute and the Trustee shall authenticate and
deliver to or upon written order of the Holder of the Securities so surrendered,
without charge to such Holder of the Securities so surrendered, without charge
to such Holder (subject to the provisions of Section 1408), a new Security or
Securities in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Security.
(c) Notwithstanding anything to the contrary contained herein, in the
event the Company shall have rescinded a redemption of Securities pursuant to
Section 1109 hereof, any Holder of Securities that shall have surrendered
Securities for conversion following the day on which notice of the subsequently
rescinded redemption shall have been given but prior to the later of (a) the
close of business on the Trading Day next succeeding the date on which public
announcement of the rescission of such redemption shall have been made and (b)
the date of the mailing of the notice of rescission required by Section 1109
hereof (a "Converting Holder") may rescind the conversion of such Securities
surrendered for conversion by (i) properly completing a form prescribed by the
Company and mailed to Holders of Securities (including Converting Holders) with
the Company's notice of rescission, which form shall provide for the
certification by any Converting Holder rescinding a conversion on behalf of any
beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934) of Securities that the beneficial ownership (within the meaning of
such Rule) of such Securities shall not have changed from the date on which such
Securities were surrendered for conversion to the date of such certification and
(ii) delivering such form to the Company no later than the close of business on
that date which is fifteen Trading Days following the date of the mailing of the
Company's notice of rescission. The delivery of such form by a Converting
Holder shall be accompanied by (x) any certificates representing shares of
Common Stock or other securities issued to such Converting Holder upon a
conversion of Securities that shall be rescinded by the proper delivery of such
form (the "Surrendered Securities"), (y) any securities, evidences of
indebtedness or assets (other than cash) distributed by the Company to such
Converting Holder by reason of such Converting Holder being a record holder of
Surrendered Securities and (z) payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the sum of (I) any cash
such Converting Holder may have received in lieu of the issuance of fractional
Surrendered Securities and (II) any cash paid or payable by the Company to such
Converting Holder by reason of such Converting Holder being a record holder of
Surrendered Securities. Upon receipt by the Company of any such form properly
completed by a Converting Holder and any
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certificates, securities, evidences of indebtedness, assets or cash payments
required to be returned by such Converting Holder to the Company as set forth
above, the Company shall instruct the transfer agent or agents for shares of
Common Stock or other securities to cancel any certificates representing
Surrendered Securities (which Surrendered Securities shall be deposited in the
treasury of the Company) and shall instruct the Registrar to reissue
certificates representing Securities to such Converting Holder (which Securities
shall be deemed to have been Outstanding at all times during the period
following their surrender for conversion). The Company shall, as promptly as
practicable, and in no event more than five Trading Days following the receipt
of any such properly completed form and any such certificates, securities,
evidences or indebtedness, assets or cash payments required to be so returned,
pay to the Holder of Securities surrendered to the Company pursuant to a
rescinded conversion or as otherwise directed by such Holder any interest paid
or other payment made to Holders of Securities during the period from the time
such Securities shall have been surrendered for conversion to the rescission of
such conversion. All questions as to the validity, form, eligibility (including
time of receipt) and acceptance of any form submitted to the Company to rescind
the conversion of Securities, including questions as to the proper completion or
execution of any such form or any certification contained therein, shall be
resolved by the Company, whose determination shall be final and binding.
Section 1403. Adjustment of Conversion Price for Common Stock or
--------------------------------------------------
Marketable Securities. The Conversion Price with respect to any Security which
- ---------------------
is convertible into Common Stock or other Marketable Securities shall be
adjusted from time to time as follows:
(1) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, (i) pay a dividend in shares of its
Common Stock or other Marketable Securities, (ii) combine its outstanding
shares of Common Stock or other Marketable Securities into a smaller number
of shares or securities, (iii) subdivide its outstanding shares of Common
Stock or other Marketable Securities or (iv) issue by reclassification of
its shares of Common Stock or other Marketable Securities any shares of
stock or other Marketable Securities of the Company, then the Conversion
Price in effect immediately before such action shall be adjusted so that
the Holders of such Securities, upon conversion thereof into Common Stock
or other Marketable Securities immediately following such event, shall be
entitled to receive the kind and amount of shares of capital stock of the
Company or other Marketable
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Securities which they would have owned or been entitled to receive upon or
by reason of such event if such Securities had been converted immediately
before the record date (or, if no record date, the effective date) for such
event. An adjustment made pursuant to this Section 1403(1) shall become
effective retroactively immediately after the record date in the case of a
dividend or distribution and shall become effective retroactively
immediately after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of this Section 1403(1),
each Holder of Securities shall be deemed to have failed to exercise any
right to elect the kind or amount of securities receivable upon the payment
of any such dividend, subdivision, combination or reclassification
(provided that if the kind or amount of securities receivable upon such
dividend, subdivision, combination or reclassification is not the same for
each nonelecting share, then the kind and amount of securities or other
property receivable upon such dividend, subdivision, combination or
reclassification for each nonelecting share shall be deemed to be the kind
and amount so receivable per share by a plurality of the nonelecting
shares).
(2) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, issue rights or warrants to all
holders of shares of its Common Stock or other Marketable Securities
entitling them (for a period expiring within 45 days after the record date
for such issuance) to subscribe for or purchase shares of Common Stock or
other Marketable Securities (or securities convertible into shares of
Common Stock or other Marketable Securities) at a price per share less than
the Current Market Price of the Common Stock or other Marketable Securities
at such record date (treating the price per share of the securities
convertible into Common Stock or other Marketable Securities as equal to
(x) the sum of (i) the price for a unit of the security convertible into
Common Stock or other Marketable Securities plus (ii) any additional
consideration initially payable upon the conversion of such security into
Common Stock or other Marketable Securities divided by (y) the number of
shares of Common Stock or other Marketable Securities initially underlying
such convertible security), the Conversion Price with respect to such
Securities shall be adjusted so that it shall equal the price determined by
dividing the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction, the numerator of which
shall be the number of shares of Common Stock or other Marketable
Securities
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outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock or other Marketable Securities
offered for subscription or purchase (or into which the convertible
securities so offered are initially convertible), and the denominator of
which shall be the number of shares of Common Stock or other Marketable
Securities outstanding on the date of issuance of such rights or warrants
plus the number of shares or securities which the aggregate offering price
of the total number of shares or securities so offered for subscription or
purchase (or the aggregate purchase price of the convertible securities so
offered plus the aggregate amount of any additional consideration initially
payable upon conversion of such Securities into Common Stock or other
Marketable Securities) would purchase at such Current Market Price of the
Common Stock or other Marketable Securities. Such adjustment shall become
effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
(3) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, distribute to all holders of shares
of its Common Stock or other Marketable Securities (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock or other
Marketable Securities are not changed or exchanged) cash, evidences of its
indebtedness, securities or assets (excluding (i) regular periodic cash
dividends in amounts, if any, determined from time to time by the Board of
Directors, (ii) dividends payable in shares of Common Stock or other
Marketable Securities for which adjustment is made under Section 1403(1) or
(iii) rights or warrants to subscribe for or purchase securities of the
Company (excluding those referred to in Section 1403(2)), then in each such
case the Conversion Price with respect to such Securities shall be adjusted
so that it shall equal the price determined by dividing the Conversion
Price in effect immediately prior to the date of such distribution by a
fraction, the numerator of which shall be the Current Market Price of the
Common Stock or other Marketable Securities on the record date referred to
below, and the denominator of which shall be such Current Market Price of
the Common Stock or other Marketable Securities less the then fair market
value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the cash or assets or
evidences of indebtedness or securities so distributed or of such
subscription rights
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or warrants applicable to one share of Common Stock or one other Marketable
Security (provided that such denominator shall never be less than 1.0);
provided, however, that no adjustment shall be made with respect to any
-------- -------
distribution of rights to purchase securities of the Company if a Holder of
Securities would otherwise be entitled to receive such rights upon
conversion at any time of such Securities into Common Stock or other
Marketable Securities unless such rights are subsequently redeemed by the
Company, in which case such redemption shall be treated for purposes of
this Section as a dividend on the Common Stock or other Marketable
Securities. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders or
holders of Marketable Securities entitled to receive such distribution; and
in the event that such distribution is not so made, the Conversion Price
shall again be adjusted to the Conversion Price which would then be in
effect if such record date had not been fixed.
(4) The Company shall be entitled to make such additional adjustments
in the Conversion Price, in addition to those required by subsections
1403(l), 1403(2) and 1403(3), as shall be necessary in order that any
dividend or distribution of Common Stock or other Marketable Securities,
any subdivision, reclassification or combination of shares of Common Stock
or other Marketable Securities or any issuance of rights or warrants
referred to above shall not be taxable to the holders of Common Stock or
other Marketable Securities for United States Federal income tax purposes.
(5) In any case in which this Section 1403 shall require that any
adjustment be made effective as of or retroactively immediately following a
record date, the Company may elect to defer (but only for five (5) Trading
Days following the filing of the statement referred to in Section 1405)
issuing to the Holder of any Securities converted after such record date
the shares of Common Stock and other capital stock of the Company or other
Marketable Securities issuable upon such conversion over and above the
shares of Common Stock and other capital stock of the Company or other
Marketable Securities issuable upon such conversion on the basis of the
Conversion Price prior to adjustment; provided, however, that the Company
-------- -------
shall deliver to such Holder a due bill or other appropriate instrument
evidencing such Holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
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(6) All calculations under this Section 1403 shall be made to the
nearest cent or one-hundredth of a share or security, with one-half cent
and .005 of a share, respectively, being rounded upward. Notwithstanding
any other provision of this Section 1403, the Company shall not be required
to make any adjustment of the conversion Price unless such adjustment would
require an increase or decrease of at least 1% of such price. Any lesser
adjustment shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to an increase
or decrease of at least 1% in such price. Any adjustments under this
Section 1403 shall be made successively whenever an event requiring such an
adjustment occurs.
(7) In the event that at any time, as a result of an adjustment made
pursuant to this Section 1403, the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
stock of or other Marketable Securities of the Company other than shares of
Common Stock or Marketable Securities into which the Securities originally
were convertible, the Conversion Price of such other shares or Marketable
Securities so receivable upon conversion of any such Security shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
and Marketable Securities contained in subparagraphs (1) through (6) of
this Section 1403, and the provision of Sections 1401, 1402 and 1404
through 1409 with respect to the Common Stock or other Marketable
Securities shall apply on like or similar terms to any such other shares or
Marketable Securities and the determination of the Board of Directors as to
any such adjustment shall be conclusive.
(8) No adjustment shall be made pursuant to this Section (i) if the
effect thereof would be to reduce the Conversion Price below the par value
(if any) of the Common Stock or other Marketable Security, if any, or (ii)
subject to 1403(5) hereof, with respect to any Security that is converted
prior to the time such adjustment otherwise would be made.
Section 1404. Consolidation or Merger of the Company. In case of
--------------------------------------
either (a) any consolidation or merger to which the Company is a party, other
than a merger or consolidation in which the Company is the surviving or
continuing corporation and which does not result in a reclassification of, or
change (other than a change in par
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value or from par value to no par value or from no par value to par value, as a
result of a subdivision or combination) in, outstanding shares of Common Stock
or other Marketable Securities or (b) any sale or conveyance of all or
substantially all of the property and assets of the Company to another Person,
then each Security then Outstanding shall be convertible from and after such
merger, consolidation, sale or conveyance of property and assets into the kind
and amount of shares of stock or other securities and property (including cash)
receivable upon such consolidation, merger, sale or conveyance by a holder of
the number of shares of Common Stock or other Marketable Securities into which
such Securities would have been converted immediately prior to such
consolidation, merger, sale or conveyance, subject to adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article Fourteen (and assuming such holder of Common Stock or other
Marketable Securities failed to exercise his rights of election, if any, as to
the kind or amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance (provided that,
if the kind or amount cf securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance is not the same
for each nonelecting share, then the kind and amount of securities, cash or
other property (including cash) receivable upon such consolidation, merger, sale
or conveyance for each nonelecting share shall be deemed to be the kind and
amount so receivable per share by a plurality of the nonelecting shares or
securities)). The Company shall not enter into any of the transactions referred
to in clause (a) or (b) of the preceding sentence unless effective provision
shall be made so as to give effect to the provisions set forth in this Section
1404. The provisions of this Section 1404 shall apply similarly to successive
consolidations, mergers, sales or conveyances.
Section 1405. Notice of Adjustment. Whenever an adjustment in the
--------------------
Conversion Price with respect to a series of Securities is required:
(1) the Company shall forthwith place on file with the Trustee and
any Conversion Agent for such Securities a certificate of the Treasurer of
the Company, stating the adjusted Conversion Price determined as provided
herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment, such certificate to be conclusive evidence that the adjustment
is correct; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion
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Price shall forthwith be nailed, first class postage prepaid, by the
Company to the Holders of record of such Outstanding Securities.
Section 1406. Notice in Certain Events. In case:
------------------------
(1) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the sale or conveyance to another person or entity or group of persons or
entities acting in concert as a partnership, limited partnership, syndicate
or other group (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934) of all or substantially all of the property and
assets of the Company; or
(2) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price
pursuant to this Article Fourteen;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent for the applicable Securities, and shall cause to be mailed,
first class postage prepaid, to the Holders of record of applicable Securities,
at least fifteen (15) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
any distribution or grant of rights or warrants triggering an adjustment to the
Conversion Price pursuant to this Article Fourteen, or, if a record is not to be
taken, the date as of which the holders of record of Common Stock or other
Marketable Securities entitled to such distribution, rights or warrants are to
be determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article Fourteen is expected
to become effective, and the date as of which it is expected that holders of
Common Stock or other Marketable Securities of record shall be entitled to
exchange their Common Stock or other Marketable Securities for securities or
other property deliverable upon such reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (1), (2) or (3) of
this Section.
Section 1407. Company To Reserve Stock or other Marketable
--------------------------------------------
Securities; Registration; Listing. (a) The Company shall at all times reserve
- ---------------------------------
and keep available, free
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from preemptive rights, out of its authorized but unissued shares of Common
Stock or other Marketable Securities, for the purpose of effecting the
conversion of the Securities, such number of its duly authorized shares of
Common Stock or number or principal amount of other Marketable Securities as
shall from time to time be sufficient to effect the conversion of all applicable
outstanding Securities into such Common Stock or other Marketable Securities at
any time (assuming that, at the time of the computation of such number of shares
or securities, all such Securities would be held by a single Holder); provided,
--------
however, that nothing contained herein shall preclude the Company from
- -------
satisfying its obligations in respect of the conversion of the Securities by
delivery of purchased shares of Common Stock or other Marketable Securities
which are held in the treasury of the Company. The Company shall from time to
time, in accordance with the laws of the State of Delaware, use its best efforts
to cause the authorized amount of the Common Stock or other Marketable
Securities to be increased if the aggregate of the authorized amount of the
Common Stock or other Marketable Securities remaining unissued and the issued
shares of such Common Stock or other Marketable Securities in its treasury
(other than any such shares reserved for issuance in any other connection) shall
not be sufficient to permit the conversion of all Securities.
(b) If any shares of Common Stock or other Marketable Securities
which would be issuable upon conversion of Securities hereunder require
registration with or approval of any governmental authority before such shares
or securities may be issued upon such conversion, the Company will in good faith
and as expeditiously as possible endeavor to cause such shares or securities to
be duly registered or approved, as the case may be. The Company will endeavor to
list the shares of Common Stock or other Marketable Securities required to be
delivered upon conversion of the Securities prior to such delivery upon the
principal national securities exchange upon which the outstanding Common Stock
or other Marketable Securities is listed at the time of such delivery.
Section 1408. Taxes on Conversion. The Company shall pay any and all
-------------------
documentary, stamp or similar issue or transfer taxes that may be payable in
respect of the issue or delivery of shares of Common Stock or other Marketable
Securities on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
Marketable Securities or the portion, if any, of the Securities which are not so
converted in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
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person requesting such issue has paid to the Company the amount of such tax or
has established to the satisfaction of the Company that such tax has been paid.
Section 1409. Conversion After Record Date. If any Securities are
----------------------------
surrendered for conversion subsequent to the record date preceding an Interest
Payment Date but on or prior to such Interest Payment Date (except Securities
called for redemption on a Redemption Date between such record date and Interest
Payment Date), the Holder of such Securities at the close of business on such
record date shall be entitled to receive the interest payable on such Securities
on such Interest Payment Date notwithstanding the conversion thereof. Securities
surrendered for conversion during the period from the close of business on any
record date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date shall (except in the case of Securities which have
been called for redemption on a Redemption Date within such period) be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the Securities being surrendered for conversion. Except
as provided in this Section 1409, no adjustments in respect of payments of
interest on Securities surrendered for conversion or any dividends or
distributions or interest on the Common Stock or other Marketable Securities
issued upon conversion shall be made upon the conversion of any Securities.
Section 1410. Corporate Action Regarding Par Value of Common Stock.
----------------------------------------------------
Before taking any action which would cause an adjustment reducing the applicable
Conversion Price below the then par value (if any) of the shares of Common Stock
or other Marketable Securities deliverable upon conversion of the Securities,
the Company will take any corporation action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock or other Marketable
Securities at such adjusted Conversion Price.
Section 1411. Company Determination Final. Any determination that
---------------------------
the Company or the Board of Directors must make pursuant to this Article is
conclusive.
Section 1412. Trustee's Disclaimer. The Trustee has no duty to
--------------------
determine when an adjustment under this Article should be made, how it should be
made or what it should be. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure to
comply with this Article. Each
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Conversion Agent other than the Company shall have the same protection under
this Section as the Trustee.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
NATIONAL SERVICE INDUSTRIES, INC.
by
______________________________
Name:
Title:
Officer
[ ],
by
______________________________
Name:
Title:
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EXHIBIT 4.2
================================================================================
INDENTURE
Between
NATIONAL SERVICE INDUSTRIES, INC.
and
SUNTRUST BANK, ATLANTA
Dated as of [ ], 199[ ]
SUBORDINATED DEBT SECURITIES
================================================================================
I
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties...................................................................
Recitals of the Company...................................................
ARTICLE I
Definitions and Other
---------------------
Provisions of General Application
---------------------------------
SECTION 101. Definitions.................................................
SECTION 102. Incorporation by Reference of Trust Indenture Act...........
SECTION 103. Compliance Certificates and Opinions........................
SECTION 104. Form of Documents Delivered to Trustee......................
SECTION 105. Acts of Holders; Record Dates...............................
SECTION 106. Notices, etc., to Trustee and Company.......................
SECTION 107. Notice to Holders; Waiver...................................
SECTION 108. Conflict with Trust Indenture Act...........................
SECTION 109. Effect of Headings and Table of Contents....................
SECTION 110. Successors and Assigns......................................
SECTION 111. Separability Clause.........................................
SECTION 112. Benefits of Indenture.......................................
SECTION 113. Governing Law...............................................
SECTION 114. Legal Holidays..............................................
SECTION 115. Corporate Obligation........................................
SECTION 116. Counterpart Originals.......................................
ARTICLE II
Security Forms
--------------
SECTION 201. Forms Generally.............................................
SECTION 202. Form of Trustee's Certificate of Authentication.............
SECTION 203. Securities in Global Form...................................
SECTION 204. Book-Entry Securities.......................................
ARTICLE III
The Securities
--------------
SECTION 301. Amount Unlimited; Issuable in Series........................
SECTION 302. Denominations...............................................
</TABLE>
I
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<TABLE>
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SECTION 303. Execution, Authentication, Delivery and Dating..............
SECTION 304. Temporary Securities........................................
SECTION 305. Registration, Registration of Transfer and Exchange.........
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............
SECTION 307. Payment of Interest; Interest Rights Preserved..............
SECTION 308. Persons Deemed Owners.......................................
SECTION 309. Cancelation.................................................
SECTION 310. Computation of Interest.....................................
SECTION 311. CUSIP Numbers...............................................
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 401. Satisfaction and Discharge of Indenture.....................
SECTION 402. Application of Trust Money..................................
SECTION 403. Discharge of Liability on Securities of Any Series..........
SECTION 404. Reinstatement...............................................
ARTICLE V
Remedies
--------
SECTION 501. Events of Default...........................................
SECTION 502. Acceleration of Maturity; Rescission and Annulment..........
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee....................................................
SECTION 504. Trustee May File Proofs of Claim............................
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities.................................................
SECTION 506. Application of Money Collected..............................
SECTION 507. Limitation on Suits.........................................
SECTION 508. Unconditional Right of Holders To Receive Principal, Premium
and Interest...............................................
SECTION 509. Restoration of Rights and Remedies..........................
SECTION 510. Rights and Remedies Cumulative..............................
SECTION 511. Delay or Omission Not Waiver................................
SECTION 512. Control by Holders..........................................
SECTION 513. Waiver of Past Defaults.....................................
SECTION 514. Undertaking for Costs.......................................
SECTION 515. Waiver of Stay or Extension Laws............................
</TABLE>
II
<PAGE>
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE VI
The Trustee
-----------
SECTION 601. Certain Duties and Responsibilities.........................
SECTION 602. Notice of Defaults..........................................
SECTION 603. Certain Rights of Trustee...................................
SECTION 604. Not Responsible for Recitals or Issuance of Securities......
SECTION 605. May Hold Securities.........................................
SECTION 606. Money Held in Trust.........................................
SECTION 607. Compensation and Reimbursement..............................
SECTION 608. Disqualification; Conflicting Interests.....................
SECTION 609. Corporate Trustee Required; Eligibility.....................
SECTION 610. Resignation and Removal; Appointment of Successor...........
SECTION 611. Acceptance of Appointment by Successor......................
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business...................................................
SECTION 613. Preferential Collection of Claims Against Company...........
SECTION 614. Appointment of Authenticating Agent.........................
ARTICLE VII
Holder's Lists and Reports
--------------------------
by Trustee and Company
----------------------
SECTION 701. Company To Furnish Trustee Names and Addresses of
Holders....................................................
SECTION 702. Preservation of Information; Communications to Holders......
SECTION 703. Reports by Trustee..........................................
SECTION 704. Reports by Company..........................................
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
SECTION 801. Company May Consolidate, etc., Only on Certain Terms........
SECTION 802. Successor Person Substituted................................
</TABLE>
III
<PAGE>
<TABLE>
<CAPTION>
Contents, p. 4
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<S> <C>
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 901. Supplemental Indentures Without Consent of Holders..........
SECTION 902. Supplemental Indentures With Consent of Holders.............
SECTION 903. Execution of Supplemental Indentures........................
SECTION 904. Effect of Supplemental Indentures...........................
SECTION 905. Conformity With Trust Indenture Act.........................
SECTION 906. Reference in Securities to Supplemental Indentures..........
ARTICLE X
Covenants
---------
SECTION 1001. Payment of Principal, Premium and Interest..................
SECTION 1002. Maintenance of Office or Agency.............................
SECTION 1003. Money for Securities Payments To Be Held in Trust...........
SECTION 1004. Existence...................................................
SECTION 1005. Maintenance of Properties...................................
SECTION 1006. Limitation on Sale/Leaseback Transactions...................
SECTION 1007. Limitation on Liens.........................................
SECTION 1008. Payment of Taxes and Other Claims...........................
SECTION 1009. Statement by Officers as to Default.........................
SECTION 1010. Waiver of Certain Covenants.................................
SECTION 1011. Additional Amounts..........................................
ARTICLE XI
Redemption of Securities;
-------------------------
Repayment at Option of Holders
------------------------------
SECTION 1101. Applicability of Article....................................
SECTION 1102. Election To Redeem; Notice to Trustee.......................
SECTION 1103. Selection by Trustee of Securities To Be Redeemed...........
SECTION 1104. Notice of Redemption........................................
SECTION 1105. Deposit of Redemption Price.................................
SECTION 1106. Securities Payable on Redemption Date.......................
SECTION 1107. Securities Redeemed in Part.................................
</TABLE>
IV
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<TABLE>
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SECTION 1108. Purchase of Securities......................................
SECTION 1109. Rescission of Redemption....................................
SECTION 1110. Repayment at the Option of Holders..........................
ARTICLE XII
Sinking Funds
-------------
SECTION 1201. Applicability of Article....................................
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.......
SECTION 1203. Redemption of Securities for Sinking Fund...................
ARTICLE XIII
Meetings of Holders of Securities
---------------------------------
SECTION 1301. Purposes for Which Meetings May Be Called...................
SECTION 1302. Call, Notice and Place of Meetings..........................
SECTION 1303. Persons Entitled To Vote at Meetings........................
SECTION 1304. Quorum; Action..............................................
SECTION 1305. Determination of Voting Rights; Conduct and Adjournment
of Meetings................................................
SECTION 1306. Counting Votes and Recording Action of Meetings.............
ARTICLE XIV
Conversion
----------
SECTION 1401. Conversion Privilege........................................
SECTION 1402. Conversion Procedure; Rescission of
Conversion; Conversion Price; Fractional Shares............
SECTION 1403. Adjustment of Conversion Price for
Common Stock or Marketable Securities......................
SECTION 1404. Consolidation or Merger of the Company......................
SECTION 1405. Notice of Adjustment........................................
SECTION 1406. Notice in Certain Events....................................
SECTION 1407. Company To Reserve Stock; Registration; Listing.............
SECTION 1408. Taxes on Conversion.........................................
</TABLE>
V
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SECTION 1409. Conversion After Record Date................................
SECTION 1410. Corporate Action Regarding Par Value of Common Stock........
SECTION 1411. Company Determination Final.................................
SECTION 1412. Trustee's Disclaimer........................................
ARTICLE XV
Subordination of Securities
---------------------------
SECTION 1501. Securities Subordinate to Senior Indebtedness...............
SECTION 1502. Circumstances Requiring Prior Payment
of Senior Indebtedness.....................................
SECTION 1503. Subrogation of Rights to Holders of Senior Indebtedness.....
SECTION 1504. Provisions Solely to Define Relative Rights.................
SECTION 1505. Trustee to Effectuate Subordination.........................
SECTION 1506. No Waiver of Subordination Provisions.......................
SECTION 1507. Notice to Trustee...........................................
SECTION 1508. Reliance on Certificate of Liquidating Agent................
SECTION 1509. Trustee Not Fiduciary for Holders of Senior Indebtedness....
SECTION 1510. Rights of Trustee as Holder of Senior Indebtedness..........
SECTION 1511. Article Applicable to Paying Agent..........................
</TABLE>
VI
<PAGE>
INDENTURE, dated as of [ ], 1998, between
NATIONAL SERVICE INDUSTRIES, INC., a corporation duly organized
and existing under the laws of the State of Delaware (herein
called the "Company"), having its principal office at 1420
Peachtree Street, N.E., Atlanta, GA 30309, and SUNTRUST BANK,
ATLANTA, a Georgia banking corporation as Trustee, the office of
the Trustee at which at the date hereof its corporate trust
business is principally administered being 55 Edgewood Avenue,
Room 400-Annex A, Atlanta, GA 30303.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
This Indenture is subject to the provisions of the Trust Indenture Act
and the rules and regulations of the Commission promulgated thereunder that are
required to be part of this Indenture and, to the extent applicable, shall be
governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Securities
or of series thereof, as follows:
ARTICLE I
Definitions and Other Provisions
--------------------------------
of General Application
----------------------
SECTION 101. Definitions. For all purposes of this Indenture, except
------------
as otherwise expressly provided or unless the context otherwise requires:
<PAGE>
2
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at the
date of such computation at the date of this instrument; and
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article VI, are defined in Section
102.
"Act," when used with respect to any Holder, has the meaning specified
in Section 105.
"Additional Amounts" means any additional amounts that are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein or pursuant thereto, to be paid by the Company with respect to
certain taxes, assessments or other governmental charges imposed on certain
Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. The Trustee may request and may conclusively rely upon an Officers'
Certificate to determine whether any Person is an Affiliate of any specified
Person.
"Authenticating Agent" means any Person, which may include the
Company, authorized by the Trustee to act on behalf of the Trustee pursuant to
Section 614 to authenticate Securities of one or more series.
<PAGE>
3
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or a committee thereof and to be in full force and effect
on the date of such certification, and delivered to the Trustee.
"Book-Entry Security" has the meaning specified in Section 204.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Capital Stock" of any Person means and includes any and all shares,
rights to purchase, warrants or options (whether or not currently exercisable),
participation or other equivalents of or interests in (however designated) the
equity (which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person (excluding any debt
securities that are convertible into, or exchangeable for, such equity).
"Capitalized Lease Obligation" of any Person means any obligation of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes in
accordance with generally accepted accounting principles; and the amount of such
obligation shall be the capitalized amount thereof determined in accordance with
generally accepted accounting principles.
"Closing Price" of the Common Stock or other marketable Security, as
the case may be, shall mean the last reported sale price of such stock or other
Marketable Security
<PAGE>
4
(regular way) as shown on the Composite Tape of the NYSE (or, if such stock or
other Marketable Security is not listed or admitted to trading on the NYSE, on
the principal national securities exchange on which such stock or other
Marketable Security is listed or admitted to trading), or, in case no such sale
takes place on such day, the average of the closing bid and asked prices on the
NYSE (or, if such stock or other Marketable Security is not listed or admitted
to trading on the NYSE, on the principal national securities exchange on which
such stock or other Marketable Security is listed or admitted to trading), or,
if it is not listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices as reported by the National
Association of Securities Dealers Automated Quotation System (NASDAQ), or if
such stock or other Marketable Security is not so reported, the average of the
closing bid and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc., selected from time to time by the
Company for that purpose.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Controller, an Assistant Controller, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company to
receive Securities to be converted into Common Stock or other Marketable
Securities on behalf of the Company. The Company initially authorizes the
Trustee to act as Conversion Agent for the Securities on its behalf. The Company
may at any time and from time to time authorize one or more Persons to act as
Conversion Agent in addition to or in
<PAGE>
5
place of the Trustee with respect to any series of Securities issued under this
Indenture.
"Conversion Event" has the meaning specified in Section 501.
"Conversion Price" means, with respect to any series of Securities
which are convertible into Common Stock or other Marketable Securities, the
price per share of Common Stock or the price per designated unit of other
Marketable Security at which the Securities of such series are so convertible as
set forth in the Board Resolution with respect to such series (or in any
supplemental indenture entered into pursuant to Section 901(j) with respect to
such series), as the same may be adjusted from time to time in accordance with
Section 1403 (or such supplemental indenture).
"Converting Holder" shall have the meaning specified in Section
1402(c) of this Indenture.
"Corporate Trust Office" means the principal office of the Trustee
first above written at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is that
indicated in the introductory paragraph of this Indenture.
"Current Market Price" on any date shall mean the average of the daily
Closing Prices per share of Common Stock or of such other Marketable Securities
for any thirty (30) consecutive Trading Days selected by the Company prior to
the day in question, which thirty (30) consecutive Trading Day period shall not
commence more than forty-five (45) Trading Days prior to the day in question;
provided that with respect to Section 1403(3), the "Current Market Price" of the
Common Stock or of such other Marketable Securities shall mean the average of
the daily Closing Prices per share of Common Stock or of such other Marketable
Securities for the five (5) consecutive Trading Days ending on the date of the
distribution referred to in Section 1403(3) (or if such date shall not be a
Trading Day, on the Trading Day immediately preceding such date).
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a global Security, the Person designated as
Depositary by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any
<PAGE>
6
time there is more than one such Person, "Depositary" as used with respect to
the Securities of any series shall mean the Depositary with respect to the
Securities of that series.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Event of Default" has the meaning specified in Section 501.
"Exchange Rate" has the meaning specified in Section 501.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or future contract or other
similar agreement or arrangement relating to interest rates or foreign exchange
rates.
"Holder", when used with respect to any Security, means the Person in
whose name the Security is registered in the Security Register.
"Indebtedness" of any Person at any date means, without duplication,
(a) all indebtedness of such Person for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby letters of
credit incurred by such Person in the ordinary course of business, (d) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred in the
ordinary course of business, (e) all Capitalized Lease Obligations of such
Person, (f) all Indebtedness of others secured by a lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person, (g) all
Indebtedness of others guaranteed by such Person to the extent of such guarantee
and (h) all Hedging Obligations of such Person.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301 and the provisions
<PAGE>
7
of the Trust Indenture Act that are deemed to be a part of and govern this
instrument.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Issue Date" means the date on which any series of the Securities is
first issued under this Indenture.
"Judgment Currency" has the meaning specified in Section 409.
"Marketable Security" means any common stock, debt security or other
security of a Person which is (or will, upon distribution thereof, be) listed on
the NYSE, the American Stock Exchange or any national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended,
or approved for quotation in the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System or any
similar system of automated dissemination of quotation of securities prices in
the United States or for which there is a recognized market maker or trading
market.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, notice of option to elect
repayment or otherwise.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Net Proceeds" means, with respect to any Sale/Leaseback Transaction
entered into by the Company or any Subsidiary, the aggregate net proceeds
received by the Company or such Subsidiary from such Sale/Leaseback Transaction
after payment of expenses, taxes, commissions and similar amounts incurred in
connection therewith, whether such proceeds are in cash or in property (valued
at the fair market value thereof at the time of receipt, as determined by the
Board of Directors).
"Officer" means the Chairman, the President, the Treasurer, any
Assistant Treasurer, Controller, any Assistant Controller, Secretary, any
Assistant Secretary or any Vice President of a Person.
<PAGE>
8
"Officers' Certificate" means a certificate signed by the Chairman,
the President or a Vice President, and by the Treasurer, the Controller, the
Secretary or an Assistant Treasurer, Assistant Controller or Assistant
Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company, rendered, if applicable, in
accordance with Section 314(d) of the Trust Indenture Act.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancelation;
(b) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
--------
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(c) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether a
quorum is present at a meeting of Holders of Securities, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the principal amount thereof that would
be due and payable as
<PAGE>
9
of the date of such determination upon acceleration of the Maturity thereof
pursuant to Section 502, (ii) the principal amount of a Security denominated in
a foreign currency shall be the U.S. dollar equivalent, determined by the
Company on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent, determined on the date of original issuance of such Security, of the
amount determined as provided in (i) above), of such Security and (iii)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver or upon any such determination as to the
presence of a quorum, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall be subordinated in right of
payment to the Securities.
"Paying Agent" means any Person, which may include the Company,
authorized by the Company to pay the principal of (and premium, if any) or
interest on any one or more series of Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof or other entity of any
kind.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as set forth or
specified in accordance with Section 301 subject to the provisions of Section
1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of
<PAGE>
10
the same debt as that evidenced by such particular Security; and, for the
purposes of this definition, any Security authenticated and delivered under
Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"Principal Property" means any manufacturing plant or facility located
within the United States of America (other than its territories or possessions)
owned by the Company or any Restricted Subsidiary which in the opinion of the
Board of Directors, is of material importance to the total business conducted by
the Company and its Restricted Subsidiaries as a whole.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Redemption Rescission Event" shall mean the occurrence of (a) any
general suspension of trading in, or limitation on prices for, securities on the
principal national securities exchange on which shares of Common Stock or
Marketable Securities are registered and listed for trading (or, if shares of
Common Stock or Marketable Securities are not registered and listed for trading
on any such exchange, in the over-the-counter market) for more than six-and-one-
half (6-1/2) consecutive trading hours, (b) any decline in either the Dow Jones
Industrial Average or the Standard & Poor's Index of 400 Industrial Companies
(or any successor index published by Dow Jones & Company, Inc. or Standard &
Poor's Corporation) by either (i) an amount in excess of 10%, measured from the
close of business on any Trading Day to the close of business on the next
succeeding Trading Day during the period commencing on the Trading Day preceding
the day notice of any redemption of Securities is given (or, if such notice is
given after the close of business on a Trading Day, commencing on such Trading
Day) and ending at the time and date fixed for redemption in such notice or (ii)
an amount in excess of 15% (or if the time and date fixed for redemption is more
than 15 days following the date on which such notice of redemption is given,
20%), measured from the close of business on the trading Day preceding the day
notice of such redemption is given (or, if such notice is given after the close
of business on Trading Day, from such Trading Day) to the close of business on
any Trading Day at or prior to the time and date fixed for redemption, (c) a
declaration of a banking moratorium or any suspension of payments in respect of
banks
<PAGE>
11
by Federal or state authorities in the United States or (d) the commencement of
a war or armed hostilities or other national or international calamity directly
or indirectly involving the United States which in the reasonable judgment of
the Company could have a material adverse effect on the market for the Common
Stock or Marketable Securities.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301, or, if not so specified, 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 or the fifteenth day of the
calendar month preceding such Interest Payment Date if such Interest Payment
Date is the first date of a calendar month, whether or not such day shall be a
Business Day.
"Required Currency" has the meaning specified in Section 506.
"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 Chairman
of the Trust Committee, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier, any Trust Officer or Assistant Trust Officer, the Controller
or any Assistant Controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company (a)
substantially all the property of which is located, or substantially all the
business of which is carried on, within the United States of America (not
including its territories and possessions and (b) that owns a Principal
Property; provided, however, that the term "Restricted Subsidiary" shall not
-------- -------
include any Subsidiary that is principally engaged in financing the operations
of the Company, or its Subsidiaries, or both, outside the United States of
America.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
<PAGE>
12
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means Indebtedness of the Company, whether
currently outstanding or hereafter issued, which is not subordinated by its
terms in right of payment to any other unsecured Indebtedness of the Company or
ranks pari passu with subordinated Indebtedness of any series of the Company;
---- -----
provided that "Senior Indebtedness" shall not include (i) Indebtedness of the
- --------
Company to any Subsidiary for money borrowed or advanced from such Subsidiary or
(ii) amounts owed (except to banks and other financial institutions) for goods,
materials or services purchased in the ordinary course of business.
"Special Record Date" for the payment of any Defaulted Interest on the
Securities of any series means a date fixed by the Trustee pursuant to Section
307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trading Day" shall mean, with respect to the Common Stock or a
Marketable Security, so long as the Common Stock or such Marketable Security, as
the case may be, is listed or admitted to trading on the NYSE, a day on which
the NYSE is open for the transaction of business, or, if the Common Stock or
such Marketable Security, as the case may be, is not listed or admitted to
trading on the NYSE a day on which the principal national securities exchange on
which the Common Stock or such Marketable Security, as the case may be, is
listed is open for the transaction of business, or, if the Common Stock or such
Marketable Security, as the case may be, is not so listed or admitted for
trading on any national securities exchange, a day on which NASDAQ is open for
the transaction of business.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor
<PAGE>
13
Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 905.
"United States" means the United States of America (including the
States and the District of Columbia) and its "possessions", which include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
"U.S. Government Obligations" has the meaning specified in Section
401.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Wholly Owned Subsidiary" means a corporation all the outstanding
voting stock (other than any directors' qualifying shares) of which is owned,
directly or indirectly, by the Company or by one or more other Wholly Owned
Subsidiaries, or by the Company and one or more other Wholly Owned Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Yield to Maturity", when used with respect to any Original Issue
Discount Security, means the yield to maturity, if any, set forth on the face
thereof.
SECTION 102. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture. The
following
<PAGE>
14
Trust Indenture Act terms used in this Indenture have the following meanings:
"Bankruptcy Act" means the Bankruptcy Act or Title 11 of the United
States Code.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder.
"Indenture To Be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
"Obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All the other Trust Indenture Act terms used in this Indenture that are defined
by the Trust Indenture Act, defined by Trust Indenture Act reference to another
statute or defined by Commission rule under the Trust Indenture Act and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 103. Compliance Certificates and Opinions. Except as
-------------------------------------
otherwise expressly provided by this Indenture, upon any application or request
by the Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any (including any covenants the
compliance with which constitutes a condition precedent), provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any (including any covenants the compliance with which constitutes
a condition precedent), have been complied with, except that in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
<PAGE>
15
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such Person
has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee. (a) In any
---------------------------------------
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
(b) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 105. Acts of Holders; Record Dates. (a) Any request, demand,
------------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed
<PAGE>
16
in writing. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent, or the holding of any Person of a Security,
shall be sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1306.
The Company may set in advance a record date for purposes of
determining the identity of Holders of Securities entitled to vote or consent to
any action by vote or consent authorized or permitted under this Indenture,
which record date shall be the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation. If a record date is fixed, those Persons who
were Holders of Outstanding Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled with respect to
such Securities to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such Persons continue to be Holders
after such record date. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice thereof to be
given to the Trustee in writing in the manner provided in Section 106 and to the
relevant Holders as set forth in Section 107.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
<PAGE>
17
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the, shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security. Any Holder or subsequent Holder may revoke the request, demand,
authorization, direction, notice, consent or other Act as to his Security or
portion of his Security; provided, however, that such revocation shall be
-------- -------
effective only if the Trustee receives the notice of revocation before the date
the Act becomes effective.
SECTION 106. Notices, etc., to Trustee and Company. Any request,
--------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, (a) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: David Kaye, and shall be deemed to be made upon, given or furnished
to, or filed with, the Trustee upon actual receipt by the Trustee thereof or (b)
the Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company, Attention: General Counsel, and shall be deemed to be
made upon, given or furnished to, or filed with, the Trustee upon actual receipt
by the Trustee thereof.
SECTION 107. Notice to Holders; Waiver. Where this Indenture
--------------------------
provides for notice to Holders of Securities of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) to Holders of
Securities if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service, or by
reason of any other cause it shall be
<PAGE>
18
impracticable to give such notice to Holders of Securities by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder. In any case in which
notice to Holders of Securities is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular holder of
a Security, shall affect the sufficiency of such notice with respect to other
Holders of Securities given as provided herein.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 108. Conflict with Trust Indenture Act. If any provision
----------------------------------
hereof limits, qualifies or conflicts with any provision of the Trust Indenture
Act or another provision hereof which is required to be included in this
Indenture by any of the provisions of the Trust Indenture Act, such provision of
the Trust Indenture Act or required provision shall control. If any provision
of this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, such provision of the Trust Indenture Act
shall be deemed to apply to this Indenture as so modified or to be excluded.
SECTION 109. Effect of Headings and Table of Contents. The Article
-----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 110. Successors and Assigns. All covenants and agreements in
-----------------------
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 111. Separability Clause. In case any provision in this
--------------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 112. Benefits of Indenture. Nothing in this Indenture or in
----------------------
the Securities, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent, Paying
Agent and Security Registrar, and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
<PAGE>
19
SECTION 113. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL
--------------
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
SECTION 114. Legal Holidays. In any case where any Interest Payment
---------------
Date, Redemption Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of principal and interest (and premium
and Additional Amounts, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity; provided that no interest shall
--------
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
SECTION 115. Corporate Obligation. No recourse may be taken,
---------------------
directly or indirectly, against any incorporator, subscriber to the capital
stock, stockholder, officer, director or employee of the Company or the Trustee
or of any predecessor or successor of the Company or the Trustee with respect to
the Company's obligations on the Securities or the obligations of the Company or
the Trustee under this Indenture or any certificate or other writing delivered
in connection herewith. Each Holder by accepting a Security waives all such
recourse.
SECTION 116. Counterpart Originals. The parties may sign any number
----------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
ARTICLE II
Security Forms
--------------
SECTION 201. Forms Generally. The Securities of each series shall be
----------------
in substantially such form or forms (including global form) as shall be
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may,
<PAGE>
20
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If temporary Securities of
any series are issued in global form as permitted by Section 304, the form
thereof shall be established as provided in the preceding sentence. A copy of
the Board Resolution establishing the form or forms of Securities of any series
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. Form of Trustee's Certificate of Authentication. The
------------------------------------------------
Trustee's certificate of authentication shall be in substantially the following
form:
"This is one of the Securities of the series designated therein and
referred to in the within-mentioned Indenture.
[ ] as Trustee By Authorized Signatory".
SECTION 203. Securities in Global Form. If Securities of a series
--------------------------
are issuable in global form, as contemplated by Section 301, then,
notwithstanding clause (10) of Section 301 and the provisions of Section 302,
any such Security shall represent such of the Outstanding Securities of such
series as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Outstanding Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the Trustee in
such manner and upon instructions given by such Person or Persons as shall be
specified in such Security or in a Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304. Subject to the provisions of Section 303
and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in global form in the manner and upon instructions given by the Person
or Persons specified in such Security or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company
<PAGE>
21
with respect to endorsement or delivery or redelivery of a Security in global
form shall be in writing but need not comply with Section 103 except as set
forth in said Section 303 or 304.
The provisions of the last sentence of Section 303 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 103 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of (and
premium, if any) and interest on any Security form shall be made to the Person
or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company or of the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a global Security as shall be
specified in a written statement, if any, of the Holder of such global Security.
Global Securities shall be issued in either registered form.
SECTION 204. Book-Entry Securities. Notwithstanding any provision of
---------------------
this Indenture to the contrary:
(a) At the discretion of the Company, any Security may be issued from
time to time, in whole or in part, in permanent global form registered in the
name of a Depositary, or its nominee. Each such Security in permanent global
form is hereafter referred to as a "Book-Entry Security". Upon such election,
the Company shall execute, and the Trustee or an Authenticating Agent shall
authenticate and deliver, one or more Book-Entry Securities that (a) are
denominated in an amount equal to the aggregate principal amount of the
Outstanding Securities of such series, (b) are registered in the name of the
Depositary or its nominee, (c) are delivered by the Trustee or an Authenticating
Agent to the Depositary or pursuant to the Depositary's instructions and (iv)
bear a legend in substantially the following form (or such other form as the
Depositary and the Company may agree upon):
<PAGE>
22
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF [THE
DEPOSITARY], TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF [NOMINEE OF THE DEPOSITARY] OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF [THE DEPOSITARY], AND ANY PAYMENT IS MADE TO
[NOMINEE OF THE DEPOSITARY] OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF [THE DEPOSITARY], ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, [NOMINEE OF THE DEPOSITARY], HAS
AN INTEREST HEREIN.
(b) Any Book-Entry Security shall be initially executed and delivered
as provided in Section 303. Notwithstanding any other provision of this
Indenture, unless and until it is exchanged in whole or in part for Securities
not issued in global form, a Book-Entry Security may not be transferred except
as a whole by the Depositary to a nominee of such Depositary, by a nominee of
such Depositary to such Depositary or another nominee of such Depositary, or by
such Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary.
(c) If at any time the Depositary notifies the Company or the Trustee
that it is unwilling or unable to continue as Depositary for any Book-Entry
Securities, or if any time the Depositary for any Book-Entry Securities shall no
longer be qualified to serve as the Depositary, the Company shall appoint a
successor Depositary, whereupon the retiring Depositary shall surrender or cause
the surrender of its Book-Entry Security or Securities to the Trustee. The
Trustee shall promptly notify the Company upon receipt of such notice. If a
successor Depositary has not been so appointed by the effective date of the
resignation of the Depositary, the Book-Entry Securities will be issued as
Securities not issued in global form, in an aggregate principal amount equal to
the principal amount of the Book-Entry Security or Securities theretofore held
by the Depositary. The Company may at any time and in its sole discretion
determine that the Securities shall no longer be Book-Entry Securities
represented by a global certificate or certificates, and will so notify the
Depositary. Upon receipt of such notice, the Depositary shall promptly surrender
or cause the surrender of its Book-Entry Security or Securities to the Trustee.
Concurrently therewith, Securities not issued in global form will be issued in
an aggregate principal amount equal to the principal amount of the Book-Entry
Security or Securities theretofore held by the Depositary. Upon any exchange of
Book-Entry Securities for Securities not issued in global form as set forth in
this Section 204(c), such Book-Entry
<PAGE>
23
Securities shall be canceled by the Trustee, and Securities issued in exchange
for such Book-Entry Securities pursuant to this section shall be registered in
such names and in such authorized denominations as the Depositary for such Book-
Entry Securities, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee or any
Authenticating Agent shall deliver such Securities to the persons in whose names
such Securities are so registered.
(d) The Company and the Trustee shall be entitled to treat the Person
in whose name any Book-Entry Security is registered as the Holder thereof for
all purposes of the Indenture and any applicable laws, notwithstanding any
notice to the contrary received by the Trustee or the Company; and the Trustee
and the Company shall have no responsibility for transmitting payments to,
communication with, notifying, or otherwise dealing with any beneficial owners
of any Book-Entry Security. Neither the Company nor the Trustee shall have any
responsibility or obligations, legal or otherwise, to the beneficial owners or
to any other party including the Depositary, except for the Holder of any Book-
Entry Security; provided, however, notwithstanding anything herein to the
-------- -------
contrary, (a) for the purposes of determining whether the requisite principal
amount of Outstanding Securities have given, made or taken any request, demand,
authorization, direction, notice, consent, waiver, instruction or other action
hereunder as of any date, the Trustee shall treat any Person specified in a
written statement of the Depositary with respect to any Book-Entry Securities as
the Holder of the principal amount of such Securities set forth therein and (b)
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or Trustee, from giving effect to any written certification, proxy or
other authorization furnished by a Depositary with respect to any Book-Entry
Securities, or impair, as between a Depositary and holders of beneficial
interests in such Securities, the operation of customary practices governing the
exercise of the rights of the Depositary as Holder of such Securities.
(e) So long as any Book-Entry Security is registered in the name of a
Depositary or its nominee, all payments of the principal of (and premium, if
any) and interest on such Book-Entry Security and redemption thereof and all
notices with respect to such Book-Entry Security shall be made and given,
respectively, in the manner provided in the arrangements of the Company with
such Depositary.
<PAGE>
24
ARTICLE III
The Securities
--------------
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
-------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more
series. There shall be established in or pursuant to a Board Resolution, and set
forth in an Officers' Certificate, or established in one or more Indentures
supplemental hereto, prior to the issuance of Securities of any series,
(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Sections 304, 305, 306, 806 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(c) whether any Securities of the series are to be issuable global
form, as Book-Entry Securities or otherwise, and, if so, whether beneficial
owners of interests in any such global Security may exchange such interests
for Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305, and the
Depositary for any global Security or Securities;
(d) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(e) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether and
under what circumstances Additional Amounts with respect to such Securities
shall be payable, 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 101, the Regular Record Date for the
interest payable on any Securities on any Interest Payment Date, and the
basis upon which
<PAGE>
25
interest shall be calculated if other than as provided in Section 310;
(f) if other than the Corporate Trust Office, the place or places
where, subject to the provisions of Section 1002, the principal of (and
premium, if any), any interest on and any Additional Amounts with respect
to the Securities of the series shall be payable;
(g) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company must exercise any such option;
(h) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices (whether denominated in cash, securities
or otherwise) at which and the terms and conditions upon which, Securities
of the series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
(i) the denomination in which any Securities of that series shall be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(j) the currency or currencies (including composite currencies or
currency units) in which payment of the principal of (and premium, if any),
any interest on and any Additional Amounts with respect to the Securities
of the series shall be payable if other than the currency of the United
States of America;
(k) if the principal of (and premium, if any) or interest on the
Securities of the series are to be payable, at the election of the Company
or a Holder thereof, in a currency or currencies (including composite
currencies or currency units) other than that in which the Securities are
stated to be payable, the currency or currencies (including composite
currencies or currency units) in which payment of the principal of (and
premium, if any) and interest on, and any Additional Amounts with respect
to, Securities of such series as to which such election is made shall be
payable, and the periods within which and the terms and conditions upon
which such election is to be made;
<PAGE>
26
(l) if the amount of payments of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to the Securities
of the series may be determined with reference to any commodities,
currencies or indices, or values, rates or prices, the manner in which such
amounts shall be determined;
(m) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(n) any additional means of satisfaction and discharge of this
Indenture with respect to Securities of the series pursuant to Section 401,
any additional conditions to discharge pursuant to Section 401 or 403 and
the application, if any, of Section 403 to Securities of the series;
(o) any deletions or modifications of or additions to the Events of
Default set forth in Section 501 or covenants of the Company set forth in
Article IX pertaining to the Securities of the series;
(p) provisions, if any, with regard to the conversion or exchange of
the Securities of such series, at the option of the Holders thereof or the
Company, as the case may be, for or into new Securities of a different
series, Common Stock or other securities and, if the Securities of such
series are convertible into Capital Stock or other Marketable Securities,
the Conversion Price therefore;
(q) information with respect to book-entry procedures; and
(r) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
At the option of the Company, interest on the Securities of any series
that bears interest may be paid by
<PAGE>
27
mailing a check to the address of any Holder as such address shall appear in the
Security Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations. The Securities of each series shall be
--------------
issuable in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series denominated in dollars shall be
issuable in denominations of $1,000 and any integral multiple thereof. Unless
otherwise provided as contemplated by Section 301 with respect to any series of
Securities, any Securities of a series denominated in a currency other than
dollars shall be issuable in denominations that are the equivalent, as
determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for such currency, as such rate is reported or
otherwise made available by the Federal Reserve Bank of New York, on the
applicable issue date for such Securities, of $1,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The
-----------------------------------------------
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President or one of its Vice Presidents,
under its corporate seal, which may be in facsimile form, reproduced thereon or
affixed thereto and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile. Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities as in this
Indenture provided and not otherwise.
<PAGE>
28
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute legal,
valid and binding obligations of the Company, enforceable in accordance
with their terms, except as such enforcement is subject to the effect of
(i) bankruptcy, insolvency, reorganization or other laws of general
applicability relating to or affecting creditors' rights and (b) general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law); and
(d) authentication and delivery of such Securities by the Trustee will
not violate the terms of this Indenture.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
<PAGE>
29
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancelation as provided in Section 309 together with
a written statement (which need not comply with Section 103 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities. Pending the preparation of
---------------------
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancelation of any one or more temporary Securities of any
series, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of the
same series of authorized denominations. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
----------------------------------------------------
The Company shall cause to be kept for each series of Securities at one of the
offices or agencies maintained pursuant to Section 1002 a register (the register
maintained in such office and in any other office or agency of
<PAGE>
30
the Company in a Place of Payment being herein sometimes collectively referred
to as the "Security Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities of such series. The Trustee is hereby
initially appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series and of like tenor, of any authorized denominations and of a like
aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series and of like tenor, of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable only as
provided in this paragraph. If the beneficial owners of interests in a global
Security are entitled to exchange such interest for Securities of such series
and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 301, then without
unnecessary delay but in any event not later than the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in an aggregate principal amount equal to
the principal amount of such global Security, executed by the Company. On or
after the earliest date on which such interests may be so exchanged, such global
Security shall be surrendered from time to time in accordance with instructions
given to the Trustee and the Depositary (which instructions shall be in writing
but need not comply with Section 103 or be accompanied by an Opinion of Counsel)
by the Common Depositary or such other depositary or Common Depositary as shall
be specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or in part, for
definitive Securities of the same series without charge and the Trustee shall
authenticate and deliver, in exchange for
<PAGE>
31
each portion of such global Security, a like aggregate principal amount of other
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such global Security to be exchanged; provided, however,
-------- -------
that no such exchanges may occur during a period beginning at the opening of
business 15 days before any selection of Securities of that series is to be
redeemed and ending on the relevant Redemption Date. Promptly following any such
exchange in part, such global Security shall be returned by the Trustee to the
Common Depositary or such other depositary or Common Depositary referred to
above in accordance with the instructions of the Company referred to above. If a
Security is issued in exchange for any portion of a global Security after the
close of business at the office or agency where such exchange occurs on (a) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (b) any Special Record Date and before
the opening of business at such office or agency on the related proposed date
for payment of interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date; or proposed date for payment, as the case
may be, in respect of such Security, but will be payable on such Interest
Payment Date or proposed for payment, as the case may be, only to the Person to
whom interest in respect of such portion of such global Security is payable in
accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than exchange
pursuant to Section 304, 806 or 1107 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer
of or exchange Securities of any series
<PAGE>
32
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Securities of such series selected for
redemption and ending at the close of business on the day of the mailing of the
relevant notice of redemption, or (b) to register the transfer of or exchange
any Registered Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part; provided that
--------
such Security shall be simultaneously surrendered for redemption.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If
-------------------------------------------------
any mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (b) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee connected therewith).
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
-----------------------------------------------
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
<PAGE>
33
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. 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, 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 so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective
<PAGE>
34
Predecessor Securities) are at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee. At the option of the Company, interest on Debt Securities of any
series that bear interest may be paid by mailing a check to the address of
the person entitled thereto as such address shall appear in the Security
Register or by wire transfer to an account maintained by the person
entitled thereto as specified in the Security Register.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture, upon registration of transfer of, in exchange
for or in lieu of, any other Security, shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
----------------------
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307)
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancelation. All Securities surrendered for payment,
------------
redemption, repayment at option of the Holder, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee. All Securities
so delivered shall be promptly canceled by the Trustee. The Company may at any
time deliver to the Trustee for cancelation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
<PAGE>
35
permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest. Except as otherwise specified
------------------------
as contemplated by Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 311. CUSIP Numbers. The Company in issuing the Securities
--------------
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
- --------
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
ARTICLE IV
Satisfaction and Discharge
--------------------------
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
----------------------------------------
shall upon Company Request cease to be of further effect with respect to
Securities of a series, and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to Securities of such series, when
(a) either
(i) all Securities of such series theretofore authenticated
and delivered other than (A) Securities which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306 and (B) Securities for whose payment
money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 903) have
been delivered to the Trustee for cancelation; or
(ii) with respect to all Outstanding Securities of such
series not theretofore delivered to the Trustee for cancelation,
the Company has deposited or caused to be deposited with the
Trustee as Trust
<PAGE>
36
funds, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee, for the purpose money
or U.S. Government Obligations maturing as to principal and
interest in such amounts and at such times as will, together with
the income to accrue thereon, without consideration of any
reinvestment thereof, be sufficient to pay and discharge the
entire indebtedness on all Outstanding Securities of such series
not theretofore delivered to the Trustee for cancelation for
principal (and premium and Additional Amounts, if any) and
interest to the Stated Maturity or any Redemption Date
contemplated by the penultimate paragraph of this Section, as the
case may be; or
(iii) the Company has properly fulfilled such other means
of satisfaction and discharge as is specified, as contemplated by
Section 301, to be applicable to the Securities of such series;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of such
series;
(c) the Company has complied with any other conditions specified
pursuant to Section 301 to be applicable to the satisfaction and discharge
of Securities of such series pursuant to this Section 401;
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to the Outstanding Securities of such series have
been complied with;
(e) if the conditions set forth in Section 401(a)(i) have not been
satisfied, and unless otherwise specified pursuant to Section 301 for the
Securities of such series, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of Securities of such
series will not recognize income, gain or loss for United States federal
income tax purposes as a result of such deposit, satisfaction and discharge
and will be subject to United States Federal income tax on the same amount
and in the same manner and at the same time as would have been the case if
such deposit, satisfaction and discharge had not occurred; and
(f) no defaut or Event of Default with respect to the Securities of
such issue shall have occurred and be
<PAGE>
37
continuing on the date of such deposit or, insofar as clause (e) or (f) of
Section 501 is concerned, at any time in the period ending on the 91st day
after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
For the purposes of this Indenture, "U.S. Government Obligations"
means direct noncallable obligations of, or noncallable obligations the payment
of principal of and interest on which is guaranteed by, the United States of
America, or to the payment of which obligations or guarantees the full faith and
credit of the United States of America is pledged, or beneficial interests in a
trust the corpus of which consists exclusively of money or such obligations or a
combination thereof.
If any Outstanding Securities of such series are to be redeemed prior
to their Stated Maturity, whether pursuant to any optional redemption provisions
or in accordance with any mandatory sinking fund requirement, the trust
agreement referred to in subclause (ii) of clause (a) of this Section shall
provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to the Outstanding Securities of such series pursuant to this Section
401, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and,
except for a discharge pursuant to subclause (i) of clause (ii) of this Section,
the obligations of the Company under Sections 305, 306, 404, 601, 607, 610(e),
1001 and 1002 and the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money. Subject to the provisions
---------------------------
of the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest and Additional Amounts for the
payment of which such money has been deposited with the Trustee.
SECTION 403. Discharge of Liability on Securities of Any Series. If
---------------------------------------------------
this Section is specified, as contemplated
<PAGE>
38
by Section 301, to be applicable to Securities of any series, the Company shall
be deemed to have paid and discharged the entire indebtedness on all the
Outstanding Securities of such series, the obligation of the Company under this
Indenture and the Securities of such series to pay the principal of (and
premium, if any) and interest on Securities of such series shall cease,
terminate and be completely discharged and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging such satisfaction and
discharge, when
(a) the Company has complied with the provisions of Section 401 of
this Indenture (other than any additional conditions specified pursuant to
Sections 301 and 401(c) and except that the opinion referred to in Section
401(e) shall state that it is based on a ruling by the Internal Revenue
Service or other change since the date hereof under applicable Federal
income tax law) with respect to all Outstanding Securities of such series;
(b) the Company has delivered to the Trustee a Company Request
requesting such satisfaction and discharge;
(c) the Company has complied with any other conditions specified
pursuant to Section 301 to be applicable to the satisfaction and discharge
of Securities of such series pursuant to this Section 403; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of the
indebtedness on the Outstanding Securities of such series have been
complied with.
Upon the satisfaction of the conditions set forth in this Section with
respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided that the Company shall not be discharged
--------
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (c) of the definition thereof if such
obligations continue to be valid obligations of the Company under applicable law
or pursuant to Section 305 or 306.
SECTION 404. Reinstatement. If the Trustee or Paying Agent is unable
-------------
to apply any money or U.S. Government Obligations deposited with respect to
Securities of any series
<PAGE>
39
in accordance with Section 401 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture with respect to the Securities of such series and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 401 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 401; provided, however, that if the Company has made
-------- -------
any payment of principal of (or premium, if any), or interest on and any
Additional Amounts with respect to any Securities because of the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE V
Remedies
--------
SECTION 501. Events of Default. "Event of Default", wherever used
------------------
herein with respect to Securities of any series, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless it is either inapplicable to a
particular series or it is specifically deleted or modified in or pursuant to
the supplemental indenture or Board Resolution establishing such series of
Securities, or in the form of Security for such series:
(a) default in the payment of any interest or any Additional Amounts
upon any Security of that series when such interest or Additional Amounts
become due and payable, and continuance of such default for a period of 30
days;
(b) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity;
(c) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series;
(d) default in the performance or breach of any covenant or warranty
of the Company in this Indenture
<PAGE>
40
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of one or
more series of Securities other than that series), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of all Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder;
(e) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days;
(f) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it, of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts
<PAGE>
41
generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action;
(g) any other Event of Default provided with respect to Securities of
that series.
Notwithstanding the foregoing provisions of this Section 501, if the
principal of (and premium, if any) or any interest on, or Additional Amounts
with respect to, any Security is payable in a currency or currencies (including
a composite currency) other than Dollars and such currency (or currencies or
currency unit) is (or are) not available to the Company for making payment
thereof due to the imposition of exchange controls or other circumstances beyond
the control of the Company (a "Conversion Event"), the Company will be entitled
to satisfy its obligations to Holders of the Securities by making such payment
in Dollars in an amount equal to the Dollar equivalent of the amount payable in
such other currency, as determined by the Company by reference to the noon
buying rate in The City of New York for cable transfers for such currency
("Exchange Rate"), as such Exchange Rate is certified for customs purposes by
the Federal Reserve Bank of New York on the date of such payment, or, if such
rate is not then available, on the basis of the most recently available Exchange
Rate.
Notwithstanding the foregoing provisions of this Section 501, any
payment made under such circumstances in Dollars where the required payment is
in a currency other than Dollars will not constitute an Event of Default under
this Indenture. Promptly after the occurrence of a Conversion Event, the Company
shall give written notice thereof to the Trustee; and the Trustee, promptly
after receipt of such notice, shall give notice thereof in the manner provided
in Section 106 to the Holders. Promptly after the making of any payment in
Dollars as a result of a Conversion Event, the Company shall give notice in the
manner provided in Section 106 to the Holders, setting forth the applicable
Exchange Rate and describing the calculation of such payments.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If
---------------------------------------------------
an Event of Default with respect to any Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of (a) the series affected by such default (in the case of an Event of Default
described in clause (a), (b), (c), (d) or (g) of Section 501) or (b) all series
of Securities (subject to the immediately following sentence, in the case of
other Events of Default) may declare the principal amount (or, if any such
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in
<PAGE>
42
the terms of that series) of all of the Securities of the series affected by
such default or all series, as the case may be, to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable. If an Event of Default
described in clause (e) or (f) of Section 501 shall occur, the principal amount
of the Outstanding Securities of all series ipso facto shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. At any time after such a declaration of acceleration
with respect to Securities of any series (or of all series, as the case may be)
has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in principal amount of the Outstanding Securities of that
series (or of all series, as the case may be), by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest on, and any Additional Amounts with
respect to, all Securities of that series (or of all series, as the
case may be);
(ii) the principal of (and premium, if any, on) any Securities
of that series (or of all series, as the case may be) which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities (in the case of Original Issue Discount Securities, the
Securities' Yield to Maturity);
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest and any Additional Amounts at the rate
or rates prescribed therefor in such Securities (in the case of
Original Issue Discount Securities, the Securities' Yield to
Maturity);
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default with respect to Securities of that series
(or of all series, as the case may be),
<PAGE>
43
other than the non-payment of the principal of Securities of that series
(or of all series, as the case may be) which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if
- -------
(a) default is made in the payment of any installment of interest on,
or any Additional Amounts with respect to, any Security of any series when
such interest or Additional Amounts shall have become due and payable and
such default continues for a period of 30 days; or
(b) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on any
overdue interest and Additional Amounts, at the rate or rates prescribed
therefor in such Securities (or in the case of Original Issue Discount
Securities, the Securities' Yield to Maturity), and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such
<PAGE>
44
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
---------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal (or lesser amount in the case of
Original Issue Discount Securities) of the Securities 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 on the Company for the payment of
overdue principal (premium, if any), interest or Additional Amounts) shall be
entitled and empowered, by intervention in such proceeding or otherwise,(a) to
file and prove a claim for the whole amount of principal (or lesser amount in
the case of Original Issue Discount Securities) (and premium, if any) and
interest and any Additional Amounts owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and (b) to collect and receive any moneys, or other property payable
or deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceedings; provided, however,
-------- -------
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official.
<PAGE>
45
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities. All rights of action and claims under this Indenture or the
- -----------
Securities may be prosecuted and enforced by the Trustee without possession of
any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by
-------------------------------
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any), interest or any Additional
Amounts, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest and any Additional Amounts
on the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
To the fullest extent allowed under applicable law, if for the purpose
of obtaining judgment against the Company in any court it is necessary to
convert the sum due in respect of the principal of (or premium, if any) or
interest on the Securities of any series (the "Required Currency") into the
currency (a "Judgment Currency") other than United States dollars, the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Business Day next preceding
that on which final judgment is given. Neither the Company nor the Trustee
shall be liable for any shortfall nor shall it benefit from any windfall in
payments to Holders of Securities under this Section caused by a change in
exchange rates between the time the amount of a judgment against it is
<PAGE>
46
calculated as above and the time the Trustee converts the Judgment Currency into
the Required Currency to make payments under this Section to Holders of
Securities, but payment of such judgment shall discharge all amounts owed by the
Company on the claim or claims underlying such judgment.
SECTION 507. Limitation on Suits. No Holder of any Security of any
--------------------
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(a) an Event of Default with respect to Securities of such series
shall have occurred and be continuing and such Holder has previously given
written notice to the Trustee of such continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders To Receive Principal,
----------------------------------------------------
Premium and Interest. Notwithstanding any other provision in this Indenture,
- ---------------------
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
<PAGE>
47
(subject to Section 307) interest on and any Additional Amounts with respect to
such Security on the Stated Maturity or Maturities expressed in such Security
(or, in the case of redemption or repayment at the option of the Holder, on the
Redemption Date or the repayment date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
-----------------------------------
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding has been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
-------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of
-----------------------------
the Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders. With respect to Securities of any
-------------------
series, the holders of a majority in principal amount of the Outstanding
Securities of such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, relating to or arising
under an Event of Default
<PAGE>
48
described in clauses (a), (b), (c), (d) or (g) of Section 501, and with respect
to all Securities the Holders of a majority in principal amount of all
Outstanding Securities shall have the right to direct the time, method and place
of conducting any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, not relating to or arising under such an Event
of Default, provided that in each such case
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults. The Holders of a majority in
------------------------
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, and the Holders of a
majority in principal amount of all Outstanding Securities may on behalf of the
Holders of all Securities waive any other past default hereunder and its
consequences, except in each case a default
(a) in the payment of the principal of (or premium, if any) or
interest on, or any Additional Amounts with respect to, any Security; or
(b) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs. All parties to this Indenture
----------------------
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and
<PAGE>
49
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on, or any Additional Amounts with respect to, any Security
on or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws. The Company
---------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VI
The Trustee
-----------
SECTION 601. Certain Duties and Responsibilities. (a) Except during
------------------------------------
the continuance of an Event of Default with respect to the Securities of any
series,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine
<PAGE>
50
whether or not they conform on their face to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing with
respect to the Securities of any series, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(i) this Subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series or of all series, determined as provided in
Section 512, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to
the Securities of such series; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(v) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
(vi) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the
<PAGE>
51
Trustee need not be segregated from other funds except to the extent
required by law.
SECTION 602. Notice of Defaults. Within 90 days after the occurrence
-------------------
of any default hereunder with respect to the Securities of any series, the
Trustee shall give notice of such default hereunder known to the Trustee to all
Holders of Securities of such series in the manner provided in Section 106,
unless such default shall have been cured or waived; provided, however, that
-------- -------
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on, or any Additional Amounts with respect to, any Security
of such series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders of Securities of such series; and provided, further, that in the case of
-------- -------
any default of the character specified in Section 501(d) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
SECTION 603. Certain Rights of Trustee. Subject to the provisions of
--------------------------
Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the
<PAGE>
52
absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
-------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities. The Trustee, any Authenticating
--------------------
Agent, any Paying Agent, any Security Registrar or any other agent of the
Company, in its individual or any
<PAGE>
53
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust. Money held by the Trustee in trust
--------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement. The Company agrees
-------------------------------
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which completion shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the reasonable
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, damages, claims, liability or expense of whatsoever kind incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of, premium, if any, or interest, if
any, on, or any Additional Amounts with respect to, particular Securities. Any
expenses and compensation for any services rendered by the Trustee after the
occurrence of an Event of Default specified in clause (e) or (f) of Section 401
shall constitute expenses and compensation for services of administration under
all applicable Federal or
<PAGE>
54
state bankruptcy, insolvency, reorganization or other similar laws.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests. (a) If the
----------------------------------------
Trustee has or shall acquire any conflicting interest, as defined in this
Section, with respect to the Securities of any series, it shall, within 90 days
after ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign with respect to the Securities of that series in
the manner and with the effect hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days after the expiration of such 90-
day period, transmit by mail to all Holders of Securities of that series, as
their names and addresses appear in the Security Register, notice of such
failure.
(c) For the purposes of this Section, the term "conflicting interest"
shall have the meaning specified in Section 310(b) of the Trust Indenture Act
and the Trustee shall comply with Section 310(b) of the Trust Indenture Act;
provided that there shall be excluded from the operation of Section 310(b)(1) of
- --------
the Trust Indenture Act with respect to the Securities of any series the
Indenture between the Company and the Trustee relating to the Company's
subordinated debt securities, this Indenture with respect to the Securities of
any series other than that series and any other indenture or indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met.
For purposes of the preceding sentence, the optional provision permitted by the
second sentence of Section 310(b)(9) of the Trust Indenture Act shall be
applicable.
SECTION 609. Corporate Trustee Required; Eligibility. There shall at
----------------------------------------
all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of
<PAGE>
55
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 610. Resignation and Removal; Appointment of Successor. (a)
--------------------------------------------------
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the resigning Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 608(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months; or
(ii) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder of Securities; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B)
<PAGE>
56
subject to Section 514, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to any or all series of Securities and the appointment of a
successor Trustee or Trustees with respect to such series.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and such successor Trustee
or Trustees shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
<PAGE>
57
SECTION 611. Acceptance of Appointment by Successor. (a) In case of
---------------------------------------
the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (ii)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee and
(iii) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture, the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
<PAGE>
58
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- ---------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company. The
--------------------------------------------------
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship described in Section 311(b) of the Trust Indenture
Act. A Trustee who has resigned or been removed shall be subject to Section
311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent. The Trustee may
------------------------------------
appoint an Authenticating Agent or Agents with respect to one or more series of
securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue and upon
exchange, registration of transfer or partial redemption or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be
<PAGE>
59
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or state authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of securities may resign at any
time by giving written notice thereof to the Trustee for such series and to the
Company. The Trustee for any series may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time such Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, the Trustee
for such series may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders as their
<PAGE>
60
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
"This is one of the Securities of the series designated therein and
referred to in the within-mentioned Indenture.
[ ]
AS TRUSTEE
By ,
as Authenticating Agent
By ,
Authorized Signatory"
Notwithstanding any provision of this Section 614 to the contrary, if at any
time any Authenticating Agent appointed hereunder with respect to any series of
Securities shall not also be acting as the Security Registrar hereunder with
respect to any series of Securities, then, in addition to all other duties of an
Authenticating Agent hereunder, such Authenticating Agent shall also be
obligated: (a) to furnish to the Security Registrar promptly all information
necessary to enable the Security Registrar to maintain at all times an accurate
and current Security Register; and (b) prior to authenticating any Security
denominated in a foreign currency, to ascertain from the Company the units of
such foreign currency that are required to be determined by the Company pursuant
to Section 302.
<PAGE>
61
ARTICLE VII
Holder's Lists and Reports by Trustee and Company
-------------------------------------------------
SECTION 701. Company To Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders. With respect to each series of Securities, the Company will furnish or
- --------
cause to be furnished to the Trustee:
(a) semiannually, not more than 15 days after each Regular Record
Date relating to that series (or, if there is no Regular Record Date
relating to that series, on June 30 and December 31), a list, in such form
as the Trustee may reasonably require, of the names and addresses of the
Holders of that series as of such dates; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content, such list to be dated as of a date not more than
15 days prior to the time such list is furnished;
provided that so long as the Trustee is the Security Registrar, the Company
- --------
shall not be required to furnish or cause to be furnished such a list to the
Trustee.
SECTION 702. Preservation of Information; Communications to Holders.
-------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders of each series received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy any list furnished to it
as provided in Section 701 upon receipt of a new list so furnished.
(b) Holders of Securities may communicate pursuant to the Trust
Indenture Act with other Holders with respect to their rights under this
Indenture or under the Securities.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
<PAGE>
62
SECTION 703. Reports by Trustee. (a) Within 60 days after January
-------------------
31 of each year commencing with the year 1999, the Trustee shall transmit by
mail to Holders a brief report dated as of such reporting date that complies
with Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) of the Trust
Indenture Act.
(c) Reports pursuant to this Section shall be transmitted by mail:
(i) to all Holders of Securities, as the names and addresses of such
Holders appear in the Security Register;
(ii) to such Holders of Securities as have, within the two years
preceding such transmissions, filed their names and addresses with the
Trustee for that purpose; and
(iii) except in the case of reports pursuant to subsection (b) of this
Section, to each Holder of a Security whose name and address is preserved
at the time by the Trustee, as provided in Section 702(a).
(d) A copy of each report pursuant to Subsection (a) or (b) of this
Section 703 shall, at the time of its transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
SECTION 704. Reports by Company. The Company shall file with the
-------------------
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 12 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, and shall
otherwise comply with Section 314(a) of the Trust Indenture Act.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
-----------------------------------------------------
The Company shall not consolidate with or
<PAGE>
63
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless:
(a) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized
and existing under the laws of the United States or any state thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of (and premium, if any) and interest (including all Additional Amounts, if
any) on all the Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Person Substituted. Upon any consolidation by
-----------------------------
the Company with or merger by the Company into any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of such lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
<PAGE>
64
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 901. Supplemental Indentures Without Consent of Holders.
---------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series), to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or otherwise secure any series of the Securities or to
surrender any right or power herein conferred upon the Company;
(c) to add any additional Events of Default with respect to all or any
series of the Securities (and, if such Event of Default is applicable to
less than all series of Securities, specifying the series to which such
Event of Default is applicable);
(d) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of securities; provided that any
--------
such addition,change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is adversely affected by
such addition or such change in or elimination of such provision;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301 and to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to
provide for certificated Securities in addition to or in place of
uncertificated Securities;
(f) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series
<PAGE>
65
of Securities pursuant to Section 401 or Section 403; provided, however,
-------- -------
that any such action shall not adversely affect the interest of the Holders
of Securities of such series or any other series of Securities in any
material respect;
(h) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b);
(i) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that such action under
--------
this clause shall not adversely affect the interests of the Holders of
Securities of any series in any material respect;
(j) to provide for the terms and conditions of conversion into Common
Stock or other Marketable Securities of the Securities of any series which
are convertible into Common Stock or other Marketable Securities, if
different from those set forth in Article Fourteen; or
(k) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act.
SECTION 902. Supplemental Indentures with Consent of Holders. With
------------------------------------------------
the consent of the Holders of a majority in principal amount of the Outstanding
Securities of each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
-------- -------
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(a) change the Stated Maturity of the principal of, or any installment
of principal of interest on, any Security, or reduce the principal amount
thereof or the
<PAGE>
66
rate of interest thereon, any Additional Amounts with respect thereto or
any premium payable upon the redemption thereof, or change any obligation
of the Company to pay Additional Amounts (except as contemplated by Section
801(a) and permitted by Section 901(a)), or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502, or adversely affects any right of Repayment at the option
of the Holder of any security, or change any Place of Payment where, or the
coin or currency or currencies (including composite currencies or currency
units) in which, any Security or any premium or any interest thereon or
Additional Amounts with respect thereto is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption or Repayment at the
option of the Holder, on or after the Redemption Date or the Repayment
Date, as the case may be);
(b) reduce the percentage in principal amount of Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture;
or
(c) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide with
respect to any particular series the right to condition the effectiveness
of any supplemental indenture as to that series on the consent of the
Holders of a specified percentage of the aggregate principal amount of
Outstanding Securities of such series (which provision may be made pursuant
to Section 301 without the consent of any Holder) or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
-------- -------
the comment of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1010, or the
deletion of this proviso, in accordance with the requirements of Sections
611(b) and 901(f).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights
<PAGE>
67
of the Holders of Securities of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this Indenture
of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures. In executing, or
-------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures. In executing, or
-------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution
----------------------------------
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
------------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
---------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
<PAGE>
68
ARTICLE X
Covenants
---------
SECTION 1001. Payment of Principal, Premium and Interest. The
-------------------------------------------
Company covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay the principal of (and premium, if any), interest
on and any Additional Amounts with respect to the Securities of that series in
accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency. The Company will
--------------------------------
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
such office or agency shall be the principal office of [ ],
in the City of New York, which, on the date hereof, is located at [ ].
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency. The Company hereby designates the Corporate Trust Office
of the Trustee as one such office or agency of the Company in accordance with
Section 305.
SECTION 1003. Money for Securities Payments To Be Held in Trust. If
--------------------------------------------------
the Company shall at any time act as its own Paying Agent with respect to any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on or any Additional Amounts with
<PAGE>
69
respect to any of the Securities of that series, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, the Company will, on or before each due date of the
principal of (and premium, if any) or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any), interest on or any Additional Amounts with respect to
Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any), interest on or any Additional
Amounts with respect to the Securities of that series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent
<PAGE>
70
shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for three
years after such principal (and premium, if any) or interest has become due and
payable shall, unless otherwise required by mandatory provisions of applicable
escheat, or abandoned or unclaimed property law, be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
-------- -------
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper in The Borough of Manhattan, The City of New York, notice
that such money remains unclaimed and that, after a date specified herein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will, unless otherwise required by
mandatory provisions of applicable escheat, or abandoned or unclaimed property
law, be repaid to the Company.
SECTION 1004. Existence. Subject to Article VII, the Company will do
----------
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
SECTION 1005. Maintenance of Properties. The Company will cause all
--------------------------
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent that
-------- -------
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims. The Company will
----------------------------------
pay or discharge or cause to be paid or
<PAGE>
71
discharged, before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (b) all material lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Company or
any Subsidiary; provided, however, that the Company shall not be required to pay
-------- -------
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 1007. Statement by Officers as to Default. The Company will
------------------------------------
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof so long as any Security is outstanding
hereunder, an Officers' Certificate, stating that a review of the activities of
the Company during such year and of performance under this Indenture has been
made under the supervision of the signers thereof and whether or not to the best
of their knowledge, based upon such review, the Company is in default in the
performance, observance or fulfillment of any of its covenants and other
obligations under this Indenture, and if the Company shall be in default,
specifying each such default known to them and the nature and status thereof.
One of the officers signing the Officers' Certificate delivered pursuant to this
Section 1009 shall be the principal executive, financial or accounting officer
of the Company.
For purposes of this Section, such compliance shall be determined
without regard to any period of grace or requirement of notice provided under
this Indenture.
SECTION 1008. Waiver of Certain Covenants. The Company may omit in
----------------------------
any particular instance to comply with any covenant or condition set forth in
Sections 1005 to 1008, inclusive, with respect to the securities of any series,
or any covenant added for the benefit of any series of Securities as
contemplated by Section 301 (unless otherwise specified pursuant to Section 301)
if before or after the time for such compliance the Holders of a majority in
principal amount of the Outstanding Securities of such series affected by such
omission (acting as one class) shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant, or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
<PAGE>
72
SECTION 1009. Additional Amounts. If the Securities of a series
-------------------
provide for the payment of Additional Amounts, the Company will pay to the
Holder of any Security of such series Additional Amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Security
of any series or the net proceeds received on the sale or exchange of any
Security of any series, such mention shall be deemed to include mention of the
payment of Additional Amounts provided for in this Section to the extent that,
in such context, Additional Amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
such express mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company shall furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities and the Company will pay to such Paying Agent the
Additional Amounts required by this Section. The Company covenants to indemnify
the Trustee and any Paying Agent for, and to hold them harmless against any
loss, liability or expense reasonably incurred without negligence or bad faith
on their part arising out of or in connection with actions taken or omitted by
any of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
<PAGE>
73
ARTICLE XI
Redemption of Securities
------------------------
SECTION 1101. Applicability of Article. Securities of any series
-------------------------
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election To Redeem; Notice to Trustee. The election of
--------------------------------------
the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of less than all the
Securities of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date, the principal amount of Securities of such series to be redeemed, the
Redemption Price of such Securities and the amount of any accrued interest and
Additional Amounts payable with respect thereto on the Redemption Date. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed. If
--------------------------------------------------
less than all the Securities of any series are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, pro rata or by lot or by such other method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series or of the
principal amount of global Securities of such series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the
<PAGE>
74
redemption of Securities shall relate, in the case of any Securities redeemed or
to be redeemed only in part, to the portion of the principal amount of such
Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be
---------------------
given in the manner provided in Section 107 to each Holder of Securities to be
redeemed not less than 30 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price, including each component thereof;
(c) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the case;
(g) the aggregate principal amount of Securities being redeemed; and
(h) the "CUSIP" number of the Securities, if applicable; and
(i) such other information as the Trustee in its reasonable discretion
deems appropriate.
A notice of redemption as contemplated by Section 107 need not identify
particular Securities to be redeemed. Notice of redemption of Securities to be
redeemed at the election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price. On or before any
----------------------------
Redemption Date, the Company shall deposit with the
<PAGE>
75
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, and any Additional
Amounts with respect to, all the Securities which are to be redeemed on that
date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
--------------------------------------
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price, accrued interest on Additional
Amounts, if any, payable) such Securities shall cease to bear interest redeemed.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest (and any Additional Amounts) to the Redemption
Date; and provided, however, that installments of interest whose Stated Maturity
-------- -------
is on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security or, in the case of Original Issue Discount Securities,
the Securities' Yield to Maturity.
SECTION 1107. Securities Redeemed in Part. Any Security which is to
----------------------------
be redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities of the same series and Stated Maturity, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 1108. Purchase of Securities. Unless otherwise specified as
-----------------------
contemplated by Section 301, the Company and any Affiliate of the Company may at
any time
<PAGE>
76
purchase or otherwise acquire Securities in the open market or by private
agreement. Such acquisition shall not operate as or be deemed for any purpose to
be a redemption of the indebtedness represented by such Securities. Any
Securities purchased or acquired by the Company may be delivered to the Trustee
and, upon such delivery, the indebtedness represented thereby shall be deemed to
be satisfied. Section 309 shall apply to all Securities so delivered.
SECTION 1109. Rescission of Redemption. In the event that this
-------------------------
Section 1109 is specified to be applicable to a series of Securities pursuant to
Section 301 and a Redemption Rescission Event shall occur following any day on
which a notice of redemption shall have been given pursuant to Section 1104
hereof but at or prior to the time and date fixed for redemption as set forth in
such notice of redemption, the Company may, at its sole option, at any time
prior to the earlier of (i) the close of business on that day which is two
Trading Days following such Redemption Rescission Event and (ii) the time and
date fixed for redemption as set forth in such notice of redemption shall have
related by making a public announcement of such rescission (the date on which
such public announcement shall have been made being hereinafter referred to as
the "Rescission Date"). The Company shall be deemed to have made such
announcement if it shall issue a release to the Dow Jones New Service, Reuters
Information Services or any successor news wire service. From and after the
making of such announcement, the Company shall have no obligation to redeem
Securities called for redemption pursuant to such notice of redemption or to pay
the Redemption Price therefor and all rights of Holders of Securities shall be
restored as if such notice of redemption had not been given. As promptly as
practicable following the making of such announcement, the Company shall
telephonically notify the Trustee and the Paying Agent of such rescission. The
Company shall give notice of any such rescission by first-class mail, postage
prepaid, mailed as promptly as practicable but in no event later than the close
of business on that day which is five Trading Days following the Rescission Date
to each Holder of Securities at the close of business on the Rescission Date, to
any other Person that was a Holder of Securities and that shall have surrendered
Securities for conversion following the giving of notice of the subsequently
rescinded redemption and to the Trustee and the Paying Agent. Each notice of
rescission shall (w) state that the redemption described in the notice of
redemption has been rescinded, (x) state that any Converting Holder shall be
entitled to rescind the conversion of Securities surrendered for conversion
following the day on which notice of redemption was given but on or prior to the
date of the mailing of the Company's notice of rescission, (y) be accompanied by
a form prescribed by the Company to be used by any Converting Holder rescinding
the conversion of
<PAGE>
77
Securities so surrendered for conversion (and instructions for the completion
and delivery of such form, including instructions with respect to any payment
that may be required to accompany such delivery) and (z) state that such form
must be properly completed and received by the Company no later than the close
of business on a date that shall be 15 Trading Days following the date of the
mailing of such notice of rescission.
SECTION 1110. Repayment at the Option of Holders. Securities of
-----------------------------------
any series which are repayable at the option of the Holders thereof before their
Stated Maturity shall be repaid in accordance with the terms of the Securities
of such series. The repayment of any principal amount of Securities pursuant to
such option of the Holder to require repayment of Securities before their stated
Maturity, for purposes of Section 309 shall not operate as a payment, redemption
or satisfaction of the indebtedness represented by such Securities unless and
until the Company, at its option, shall deliver or surrender the same to the
Trustee with a directive that such Securities be canceled. Notwithstanding
anything to the contrary contained in this Section 1110, in connection with any
repayment of Securities, the Company may arrange for the purchase of any
Securities by an agreement with one or more investment bankers or other
purchasers to purchase such Securities by paying to the Holders of such
Securities on or before the close of business on the repayment date an amount
not less than the repayment price payable by the Company on repayment of such
Securities, and the obligation of the Company to pay the repayment price of such
Securities shall be satisfied and discharged to the extent such payment is so
paid by such purchasers.
ARTICLE XII
Sinking Funds
-------------
SECTION 1201. Applicability of Article. The provisions of this
-------------------------
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as
<PAGE>
78
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
------------------------------------------------------
The Company (a) may deliver Outstanding Securities of a series (other than any
previously called for redemption), and (b) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less
------------------------------------------
than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE XIII
Meetings of Holders of Securities
---------------------------------
SECTION 1301. Purposes for Which Meetings May Be Called. A meeting
------------------------------------------
of Holders of Securities of any or all series may be called at any time and from
time to time pursuant to this Article to make, give or take any request,
<PAGE>
79
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
SECTION 1302. Call, Notice and Place of Meetings. (a) The Trustee
-----------------------------------
may at any time call a meeting of Holders of Securities of any series for any
purpose specified in Section 1301, to be held at such time and at such place in
Atlanta, Georgia, in The Borough of Manhattan, The City of New York, or in any
other location, as the Trustee shall determine. Notice of every meeting of
Holders of Securities of any series, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 107, not less than 20
nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of any series, shall have requested the Trustee for any such series
to call a meeting of the Holders of Securities of such series for any purpose
specified in Section 1301, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
made the first publication of the notice of such meeting within 30 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Securities of
such series in the amount above specified, as the case may be, may determine the
time and the place in Atlanta, Georgia, or in The Borough of Manhattan, The City
of New York, for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in Subsection (a) of this Section.
SECTION 1303. Persons Entitled To Vote at Meetings. To be entitled
-------------------------------------
to vote at any meeting of Holders of Securities of any series, a Person shall be
(a) a Holder of one or more Outstanding Securities of such series, or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders. The
only Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series 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 1304. Quorum; Action. The Persons entitled to vote a
---------------
majority in aggregate principal amount of the Outstanding Securities of a series
shall constitute a quorum for a meeting of Holders of Securities of such series.
In the
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80
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Securities
of such series, be dissolved. In any other case, the meeting may be adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Subject to Section 1305(d),
notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1302(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly that
Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series; provided, however, that, except as limited by the proviso to Section
-------- -------
902, any resolution with respect to any request, demand, authorization,
direction, notice, consent or waiver which this Indenture expressly provides may
be made, given or taken by the Holders of a specified percentage that is less
than a majority in aggregate principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in aggregate principal amount of the Outstanding
Securities of that series.
Except as limited by the proviso to Section 902, any resolution passed
or decision taken at any meeting of Holders of Securities of any series duly
held in accordance with this Section shall be binding on all the Holders of
Securities of such series, whether or not present or represented at the meeting.
SECTION 1305. Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings. (a) The holding of Securities shall be proved in the manner
- ------------
specified in Section 105 and the appointment of any proxy shall be proved in the
manner specified in Section 105. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 105 or other proof.
<PAGE>
81
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1302(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series and each
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
--------
however, that no vote shall be cast or counted at any meeting in respect of any
- -------
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or as a proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1302 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 1306. Counting Votes and Recording Action of Meetings. The
------------------------------------------------
vote upon any resolution submitted to any meeting of Holders of Securities of
any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to such 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 such notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and
<PAGE>
82
secretary of the meeting and one such copy shall be delivered to the Company,
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
ARTICLE XIV
Conversion
----------
Section 1401. Conversion Privilege. If so provided in a Board
--------------------
Resolution with respect to the Securities of any series, the Holder of a
Security of such series shall have the right, at such Holder's option, to
convert, in accordance with the terms of such series of Securities and this
Article XIV, all or any part (in a denomination of, unless otherwise specified
in a Board Resolution or supplemental indenture with respect to Securities of
such series, $1,000 in principal amount or any integral multiple thereof) of
such Security into shares of Common Stock or other Marketable Securities
specified in such Board Resolution at any time or, as to any Securities called
for redemption, at any time prior to the time and date fixed for such redemption
(unless the Company shall default in the payment of the Redemption Price, in
which case such right shall not terminate at such time and date). The provisions
of this Article Fourteen shall not be applicable to the Securities of a series
unless otherwise specified in a Board Resolution with respect to the Securities
of such series.
Section 1402. Conversion Procedure; Rescission of Conversion;
-----------------------------------------------
Conversion Price; Fractional Shares. (a) Each Security to which this Article
- -----------------------------------
is applicable shall be convertible at the office of the Conversion Agent, and at
such other place or places, if any, specified in a Board Resolution with respect
to the Securities of such series, into fully paid and nonassessable shares
(calculated to the nearest 1/100th of a share) of Common Stock or other
Marketable Securities. The Securities will be converted into shares of Common
Stock or such other Marketable Securities at the Conversion Price therefor. No
payment or adjustment shall be made in respect of dividends on the Common Stock
or such other Marketable Securities, or accrued interest on a converted Security
except as described in Section 1409. The Company may, but shall not be required,
in connection with any conversion of Securities, to issue a fraction of a share
of Common Stock or of such other Marketable Security, and, if the Company shall
determine not to issue any such fraction, the Company shall, subject to Section
1403(4), make a cash payment (calculated to the nearest cent) equal to such
fraction multiplied by the Closing
<PAGE>
83
Price of the Common Stock or such other Marketable Security on the last Trading
Day prior to the date of conversion.
(b) Before any Holder of a Security shall be entitled to convert the
same into Common Stock or other Marketable Securities, such Holder shall
surrender such Security duly endorsed to the Company or in blank, at the office
of the Conversion Agent or at such other place or places, if any, specified in a
Board Resolution with respect to the Securities of such series, and shall give
written notice to the Company at said office or place that he elects to convert
the same and shall state in writing therein the principal amount of Securities
to be converted and the name or names (with addresses) in which he wishes the
certificate or certificates for Common Stock or for such other Marketable
Securities to be issued; provided, however, that no Security or portion thereof
-------- -------
shall be accepted for conversion unless the principal amount of such Security or
such portion, when added to the principal amount of all other Securities or
portions thereof then being surrendered by the Holder thereof for conversion,
exceeds the then effective Conversion Price with respect thereto. If more than
one Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares of Common Stock or such other Marketable Securities
which shall be deliverable upon conversion shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof to
the extent permitted thereby) so surrendered. Subject to the next succeeding
sentence, the company will, as soon as practicable thereafter, issue and deliver
at said office or place to such Holder of a Security, or to his nominee or
nominees, certificates for the number of full shares of Common Stock or other
Marketable Security to which he shall be entitled as aforesaid, together,
subject to the last sentence of paragraph (a) above, with cash in lieu of any
fraction of a share to which he would otherwise be entitled. The Company shall
not be required to deliver certificates for shares of Common Stock or other
Marketable Securities while the stock transfer books for such stock or the
transfer books for such Marketable Securities, as the case may be, or the
Security Register are duly closed for any purpose, but certificates for shares
of Common Stock or other Marketable Securities shall be issued and delivered as
soon as practicable after the opening of such books or Security Register. A
Security shall be deemed to have been converted as of the close of business on
the date of the surrender of such Security for conversion as provided above, and
the person or persons entitled to receive the Common Sock or other Marketable
Securities issuable upon such conversion shall be treated for all purposes as
the record Holder or Holders of such Common Stock or other Marketable Securities
as of the close of business on such date. In case any Security shall be
surrendered for partial
<PAGE>
84
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to or upon written order of the Holder of the Securities so surrendered,
without charge to such Holder of the Securities so surrendered, without charge
to such Holder (subject to the provisions of Section 1408), a new Security or
Securities in authorized denominations in an aggregate principal amount equal to
the unconverted portion of the surrendered Security.
(c) Notwithstanding anything to the contrary contained herein, in the
event the Company shall have rescinded a redemption of Securities pursuant to
Section 1109 hereof, any Holder of Securities that shall have surrendered
Securities for conversion following the day on which notice of the subsequently
rescinded redemption shall have been given but prior to the later of (a) the
close of business on the Trading Day next succeeding the date on which public
announcement of the rescission of such redemption shall have been made and (b)
the date of the mailing of the notice of rescission required by Section 1109
hereof (a "Converting Holder") may rescind the conversion of such Securities
surrendered for conversion by (i) properly completing a form prescribed by the
Company and mailed to Holders of Securities (including Converting Holders) with
the Company's notice of rescission, which form shall provide for the
certification by any Converting Holder rescinding a conversion on behalf of any
beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934) of Securities that the beneficial ownership (within the meaning of
such Rule) of such Securities shall not have changed from the date on which such
Securities were surrendered for conversion to the date of such certification and
(ii) delivering such form to the Company no later than the close of business on
that date which is fifteen Trading Days following the date of the mailing of the
Company's notice of rescission. The delivery of such form by a Converting Holder
shall be accompanied by (x) any certificates representing shares of Common Stock
or other securities issued to such Converting Holder upon a conversion of
Securities that shall be rescinded by the proper delivery of such form (the
"Surrendered Securities"), (y) any securities, evidences of indebtedness or
assets (other than cash) distributed by the Company to such Converting Holder by
reason of such Converting Holder being a record holder of Surrendered Securities
and (z) payment in New York Clearing House funds or other funds acceptable to
the Company of an amount equal to the sum of (I) any cash such Converting Holder
may have received in lieu of the issuance of fractional Surrendered Securities
and (II) any cash paid or payable by the Company to such Converting Holder by
reason of such Converting Holder being a record holder of Surrendered
Securities. Upon receipt by the Company of any such form properly completed by a
Converting Holder and any
<PAGE>
85
certificates, securities, evidences of indebtedness, assets or cash payments
required to be returned by such Converting Holder to the Company as set forth
above, the Company shall instruct the transfer agent or agents for shares of
Common Stock or other securities to cancel any certificates representing
Surrendered Securities (which Surrendered Securities shall be deposited in the
treasury of the Company) and shall instruct the Registrar to reissue
certificates representing Securities to such Converting Holder (which Securities
shall be deemed to have been Outstanding at all times during the period
following their surrender for conversion). The Company shall, as promptly as
practicable, and in no event more than five Trading Days following the receipt
of any such properly completed form and any such certificates, securities,
evidences or indebtedness, assets or cash payments required to be so returned,
pay to the Holder of Securities surrendered to the Company pursuant to a
rescinded conversion or as otherwise directed by such Holder any interest paid
or other payment made to Holders of Securities during the period from the time
such Securities shall have been surrendered for conversion to the rescission of
such conversion. All questions as to the validity, form, eligibility (including
time of receipt) and acceptance of any form submitted to the Company to rescind
the conversion of Securities, including questions as to the proper completion or
execution of any such form or any certification contained therein, shall be
resolved by the Company, whose determination shall be final and binding.
Section 1403. Adjustment of Conversion Price for Common Stock or
--------------------------------------------------
Marketable Securities. The Conversion Price with respect to any Security which
- ---------------------
is convertible into Common Stock or other Marketable Securities shall be
adjusted from time to time as follows:
(1) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, (i) pay a dividend in shares of its
Common Stock or other Marketable Securities, (ii) combine its outstanding
shares of Common Stock or other Marketable Securities into a smaller number
of shares or securities, (iii) subdivide its outstanding shares of Common
Stock or other Marketable Securities or (iv) issue by reclassification of
its shares of Common Stock or other Marketable Securities any shares of
stock or other Marketable Securities of the Company, then the Conversion
Price in effect immediately before such action shall be adjusted so that
the Holders of such Securities, upon conversion thereof into Common Stock
or other Marketable Securities immediately following such event, shall be
entitled to receive the kind and amount of shares of capital stock of the
Company or other Marketable
<PAGE>
86
Securities which they would have owned or been entitled to receive upon or
by reason of such event if such Securities had been converted immediately
before the record date (or, if no record date, the effective date) for such
event. An adjustment made pursuant to this Section 1403(1) shall become
effective retroactively immediately after the record date in the case of a
dividend or distribution and shall become effective retroactively
immediately after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of this Section 1403(1),
each Holder of Securities shall be deemed to have failed to exercise any
right to elect the kind or amount of securities receivable upon the payment
of any such dividend, subdivision, combination or reclassification
(provided that if the kind or amount of securities receivable upon such
dividend, subdivision, combination or reclassification is not the same for
each nonelecting share, then the kind and amount of securities or other
property receivable upon such dividend, subdivision, combination or
reclassification for each nonelecting share shall be deemed to be the kind
and amount so receivable per share by a plurality of the nonelecting
shares).
(2) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, issue rights or warrants to all
holders of shares of its Common Stock or other Marketable Securities
entitling them (for a period expiring within 45 days after the record date
for such issuance) to subscribe for or purchase shares of Common Stock or
other Marketable Securities (or securities convertible into shares of
Common Stock or other Marketable Securities) at a price per share less than
the Current Market Price of the Common Stock or other Marketable Securities
at such record date (treating the price per share of the securities
convertible into Common Stock or other Marketable Securities as equal to
(x) the sum of (i) the price for a unit of the security convertible into
Common Stock or other Marketable Securities plus (ii) any additional
consideration initially payable upon the conversion of such security into
Common Stock or other Marketable Securities divided by (y) the number of
shares of Common Stock or other Marketable Securities initially underlying
such convertible security), the Conversion Price with respect to such
Securities shall be adjusted so that it shall equal the price determined by
dividing the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction, the numerator of which
shall be the number of shares of Common Stock or other Marketable
Securities
<PAGE>
87
outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock or other Marketable Securities
offered for subscription or purchase (or into which the convertible
securities so offered are initially convertible), and the denominator of
which shall be the number of shares of Common Stock or other Marketable
Securities outstanding on the date of issuance of such rights or warrants
plus the number of shares or securities which the aggregate offering price
of the total number of shares or securities so offered for subscription or
purchase (or the aggregate purchase price of the convertible
securities so offered plus the aggregate amount of any additional
consideration initially payable upon conversion of such Securities into
Common Stock or other Marketable Securities) would purchase at such Current
Market Price of the Common Stock or other Marketable Securities. Such
adjustment shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive such
rights or warrants.
(3) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, distribute to all holders of shares
of its Common Stock or other Marketable Securities (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock or other
Marketable Securities are not changed or exchanged) cash, evidences of its
indebtedness, securities or assets (excluding (i) regular periodic cash
dividends in amounts, if any, determined from time to time by the Board of
Directors, (ii) dividends payable in shares of Common Stock or other
Marketable Securities for which adjustment is made under Section 1403(1) or
(iii) rights or warrants to subscribe for or purchase securities of the
Company (excluding those referred to in Section 1403(2)), then in each such
case the Conversion Price with respect to such Securities shall be adjusted
so that it shall equal the price determined by dividing the Conversion
Price in effect immediately prior to the date of such distribution by a
fraction, the numerator of which shall be the Current Market Price of the
Common Stock or other Marketable Securities on the record date referred to
below, and the denominator of which shall be such Current Market Price of
the Common Stock or other Marketable Securities less the then fair market
value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the cash or assets or
evidences of indebtedness or securities so distributed or of such
subscription rights
<PAGE>
88
or warrants applicable to one share of Common Stock or one other Marketable
Security (provided that such denominator shall never be less than 1.0);
provided, however, that no adjustment shall be made with respect to any
-------- -------
distribution of rights to purchase securities of the Company if a Holder of
Securities would otherwise be entitled to receive such rights upon
conversion at any time of such Securities into Common Stock or other
Marketable Securities unless such rights are subsequently redeemed by the
Company, in which case such redemption shall be treated for purposes of
this Section as a dividend on the Common Stock or other Marketable
Securities. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders or
holders of Marketable Securities entitled to receive such distribution; and
in the event that such distribution is not so made, the Conversion Price
shall again be adjusted to the Conversion Price which would then be in
effect if such record date had not been fixed.
(4) The Company shall be entitled to make such additional adjustments
in the Conversion Price, in addition to those required by subsections
1403(l), 1403(2) and 1403(3), as shall be necessary in order that any
dividend or distribution of Common Stock or other Marketable Securities,
any subdivision, reclassification or combination of shares of Common Stock
or other Marketable Securities or any issuance of rights or warrants
referred to above shall not be taxable to the holders of Common Stock or
other Marketable Securities for United States Federal income tax purposes.
(5) In any case in which this Section 1403 shall require that any
adjustment be made effective as of or retroactively immediately following a
record date, the Company may elect to defer (but only for five (5) Trading
Days following the filing of the statement referred to in Section 1405)
issuing to the Holder of any Securities converted after such record date
the shares of Common Stock and other capital stock of the Company or other
Marketable Securities issuable upon such conversion over and above the
shares of Common Stock and other capital stock of the Company or other
Marketable Securities issuable upon such conversion on the basis of the
Conversion Price prior to adjustment; provided, however, that the Company
-------- -------
shall deliver to such Holder a due bill or other appropriate instrument
evidencing such Holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
<PAGE>
89
(6) All calculations under this Section 1403 shall be made to the
nearest cent or one-hundredth of a share or security, with one-half cent
and .005 of a share, respectively, being rounded upward. Notwithstanding
any other provision of this Section 1403, the Company shall not be required
to make any adjustment of the conversion Price unless such adjustment would
require an increase or decrease of at least 1% of such price. Any lesser
adjustment shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to an increase
or decrease of at least 1% in such price. Any adjustments under this
Section 1403 shall be made successively whenever an event requiring such an
adjustment occurs.
(7) In the event that at any time, as a result of an adjustment made
pursuant to this Section 1403, the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
stock of or other Marketable Securities of the Company other than shares of
Common Stock or Marketable Securities into which the Securities originally
were convertible, the Conversion Price of such other shares or Marketable
Securities so receivable upon conversion of any such Security shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
and Marketable Securities contained in subparagraphs (1) through (6) of
this Section 1403, and the provision of Sections 1401, 1402 and 1404
through 1409 with respect to the Common Stock or other Marketable
Securities shall apply on like or similar terms to any such other shares or
Marketable Securities and the determination of the Board of Directors as to
any such adjustment shall be conclusive.
(8) No adjustment shall be made pursuant to this Section (i) if the
effect thereof would be to reduce the Conversion Price below the par value
(if any) of the Common Stock or other Marketable Security, if any, or (ii)
subject to 1403(5) hereof, with respect to any Security that is converted
prior to the time such adjustment otherwise would be made.
Section 1404. Consolidation or Merger of the Company. In case of
--------------------------------------
either (a) any consolidation or merger to which the Company is a party, other
than a merger or consolidation in which the Company is the surviving or
continuing corporation and which does not result in a reclassification of, or
change (other than a change in par
<PAGE>
90
value or from par value to no par value or from no par value to par value, as a
result of a subdivision or combination) in, outstanding shares of Common Stock
or other Marketable Securities or (b) any sale or conveyance of all or
substantially all of the property and assets of the Company to another Person,
then each Security then Outstanding shall be convertible from and after such
merger, consolidation, sale or conveyance of property and assets into the kind
and amount of shares of stock or other securities and property (including cash)
receivable upon such consolidation, merger, sale or conveyance by a holder of
the number of shares of Common Stock or other Marketable Securities into which
such Securities would have been converted immediately prior to such
consolidation, merger, sale or conveyance, subject to adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article Fourteen (and assuming such holder of Common Stock or other
Marketable Securities failed to exercise his rights of election, if any, as to
the kind or amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance (provided that,
if the kind or amount cf securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance is not the same
for each nonelecting share, then the kind and amount of securities, cash or
other property (including cash) receivable upon such consolidation, merger, sale
or conveyance for each nonelecting share shall be deemed to be the kind and
amount so receivable per share by a plurality of the nonelecting shares or
securities)). The Company shall not enter into any of the transactions referred
to in clause (a) or (b) of the preceding sentence unless effective provision
shall be made so as to give effect to the provisions set forth in this Section
1404. The provisions of this Section 1404 shall apply similarly to successive
consolidations, mergers, sales or conveyances.
Section 1405. Notice of Adjustment. Whenever an adjustment in the
--------------------
Conversion Price with respect to a series of Securities is required:
(1) the Company shall forthwith place on file with the Trustee and
any Conversion Agent for such Securities a certificate of the Treasurer of
the Company, stating the adjusted Conversion Price determined as provided
herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment, such certificate to be conclusive evidence that the adjustment
is correct; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion
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91
Price shall forthwith be nailed, first class postage prepaid, by the
Company to the Holders of record of such Outstanding Securities.
Section 1406. Notice in Certain Events. In case:
------------------------
(1) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the sale or conveyance to another person or entity or group of persons or
entities acting in concert as a partnership, limited partnership, syndicate
or other group (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934) of all or substantially all of the property and
assets of the Company; or
(2) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price
pursuant to this Article Fourteen;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent for the applicable Securities, and shall cause to be mailed,
first class postage prepaid, to the Holders of record of applicable Securities,
at least fifteen (15) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
any distribution or grant of rights or warrants triggering an adjustment to the
Conversion Price pursuant to this Article Fourteen, or, if a record is not to be
taken, the date as of which the holders of record of Common Stock or other
Marketable Securities entitled to such distribution, rights or warrants are to
be determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article Fourteen is expected
to become effective, and the date as of which it is expected that holders of
Common Stock or other Marketable Securities of record shall be entitled to
exchange their Common Stock or other Marketable Securities for securities or
other property deliverable upon such reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (1), (2) or (3) of
this Section.
Section 1407. Company To Reserve Stock or other Marketable
--------------------------------------------
Securities; Registration; Listing. (a) The Company shall at all times reserve
- ---------------------------------
and keep available, free
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92
from preemptive rights, out of its authorized but unissued shares of Common
Stock or other Marketable Securities, for the purpose of effecting the
conversion of the Securities, such number of its duly authorized shares of
Common Stock or number or principal amount of other Marketable Securities as
shall from time to time be sufficient to effect the conversion of all applicable
outstanding Securities into such Common Stock or other Marketable Securities at
any time (assuming that, at the time of the computation of such number of shares
or securities, all such Securities would be held by a single Holder); provided,
--------
however, that nothing contained herein shall preclude the Company from
- -------
satisfying its obligations in respect of the conversion of the Securities by
delivery of purchased shares of Common Stock or other Marketable Securities
which are held in the treasury of the Company. The Company shall from time to
time, in accordance with the laws of the State of Delaware, use its best efforts
to cause the authorized amount of the Common Stock or other Marketable
Securities to be increased if the aggregate of the authorized amount of the
Common Stock or other Marketable Securities remaining unissued and the issued
shares of such Common Stock or other Marketable Securities in its treasury
(other than any such shares reserved for issuance in any other connection) shall
not be sufficient to permit the conversion of all Securities.
(b) If any shares of Common Stock or other Marketable Securities
which would be issuable upon conversion of Securities hereunder require
registration with or approval of any governmental authority before such shares
or securities may be issued upon such conversion, the Company will in good faith
and as expeditiously as possible endeavor to cause such shares or securities to
be duly registered or approved, as the case may be. The Company will endeavor
to list the shares of Common Stock or other Marketable Securities required to be
delivered upon conversion of the Securities prior to such delivery upon the
principal national securities exchange upon which the outstanding Common Stock
or other Marketable Securities is listed at the time of such delivery.
Section 1408. Taxes on Conversion. The Company shall pay any and all
-------------------
documentary, stamp or similar issue or transfer taxes that may be payable in
respect of the issue or delivery of shares of Common Stock or other Marketable
Securities on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
Marketable Securities or the portion, if any, of the Securities which are not so
converted in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
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93
person requesting such issue has paid to the Company the amount of such tax or
has established to the satisfaction of the Company that such tax has been paid.
Section 1409. Conversion After Record Date. If any Securities are
----------------------------
surrendered for conversion subsequent to the record date preceding an Interest
Payment Date but on or prior to such Interest Payment Date (except Securities
called for redemption on a Redemption Date between such record date and Interest
Payment Date), the Holder of such Securities at the close of business on such
record date shall be entitled to receive the interest payable on such Securities
on such Interest Payment Date notwithstanding the conversion thereof.
Securities surrendered for conversion during the period from the close of
business on any record date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date shall (except in the case of
Securities which have been called for redemption on a Redemption Date within
such period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the Securities being surrendered for conversion.
Except as provided in this Section 1409, no adjustments in respect of payments
of interest on Securities surrendered for conversion or any dividends or
distributions or interest on the Common Stock or other Marketable Securities
issued upon conversion shall be made upon the conversion of any Securities.
Section 1410. Corporate Action Regarding Par Value of Common Stock.
----------------------------------------------------
Before taking any action which would cause an adjustment reducing the applicable
Conversion Price below the then par value (if any) of the shares of Common Stock
or other Marketable Securities deliverable upon conversion of the Securities,
the Company will take any corporation action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock or other Marketable
Securities at such adjusted Conversion Price.
Section 1411. Company Determination Final. Any determination that
---------------------------
the Company or the Board of Directors must make pursuant to this Article is
conclusive.
Section 1412. Trustee's Disclaimer. The Trustee has no duty to
--------------------
determine when an adjustment under this Article should be made, how it should be
made or what it should be. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure to
comply with this Article. Each
<PAGE>
94
Conversion Agent other than the Company shall have the same protection under
this Section as the Trustee.
ARTICLE XV
Subordination of Securities
---------------------------
SECTION 1501. Securities Subordinate to Senior Indebtedness. The
----------------------------------------------
Company covenants and agrees, and each Holder of a Security or coupon, by his
acceptance thereof, whether upon original issue or upon transfer or assignment,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth, the payment of the principal of (and premium, if any) and interest on
each and all of the Securities and the payment of any coupon is hereby expressly
made subordinate and subject in right of payment to the prior payment in full of
all Senior Indebtedness.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.
SECTION 1502. Circumstances Requiring Prior Payment of Senior
-----------------------------------------------
Indebtedness. In the event of any dissolution or winding up or total or partial
- -------------
liquidation or reorganization of the Company, whether in bankruptcy,
reorganization, insolvency, receivership or similar proceeding, then the holders
of Senior Indebtedness shall be entitled to receive payment in full of all
amounts due or to become due on or in respect of all Senior Indebtedness before
the Holders of the Securities or coupons appertaining thereto are entitled to
receive any payment on account of principal of (or premium, if any) or interest
on the Securities or the payment of the coupons appertaining thereto.
Unless otherwise provided in Section 3.01, no payment in respect of
Securities shall be made if, at the time of such payment, there exists a default
in payment of all or any portion of any Senior Indebtedness, and such default
shall not have been cured or waived in writing or the benefits of this sentence
waived in writing by or on behalf of the holders of such Senior Indebtedness. In
addition, unless otherwise provided in Section 3.01, during the continuance of
any event of default (other than a default referred to in the immediately
preceding sentence) with respect to any Senior Indebtedness permitting the
holders to accelerate the maturity thereof and upon written notice thereof given
to the Trustee, with a copy to the Company (the delivery of which shall not
affect the validity of the notice to the Trustee), by any holder of such Senior
Indebtedness or its representative, then, unless and until such an event of
default shall have been cured or waived or shall have ceased to exist, no
payment
<PAGE>
95
shall be made by the Company with respect to the principal of or interest on the
Securities or to acquire any of the Securities or on account of the redemption
provisions for the Securities; provided, however, that if the holders of the
-------- -------
Senior Indebtedness to which the default relates have not declared such Senior
Indebtedness to be immediately due and payable and within 180 days after the
occurrence of such default (or have declared such Senior Indebtedness to be
immediately due and payable and within such period have rescinded such
declaration of acceleration), then the Company shall resume making any and all
required payments in respect of the Securities (including any missed payments).
Only one payment blockage period under the immediately preceding sentence may be
commenced within any consecutive 365-day period with respect to the Securities.
No event of default which existed or was continuing on the date of the
commencement of any 180-day payment blockage period with respect to the Senior
Indebtedness initiating such payment blockage period shall be, or be made, the
basis for the commencement of a second payment blockage period by a Holder or
representative of such Senior Indebtedness, whether or not within a period of
365 consecutive days unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days, (and, in the case of
any such waiver, no payment shall be made by the Company to the holders of
Senior Indebtedness in connection with such waiver other than amounts due
pursuant to the terms of the Senior Indebtedness as in effect at the time of
such default).
In the event that, notwithstanding the foregoing, the Trustee or the
Holder of any Security shall have received any payment or distribution of any
kind or character, whether in cash, property or securities, before all Senior
Indebtedness is paid in full or payment thereof provided for, and if such fact
shall then have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution shall be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, agent or other Person making payment or distribution of
assets or securities of the Company for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
In addition, nothing in this Section shall prevent the Company from
making or the Trustee from receiving or applying any payment in connection with
the redemption of Securities if the first publication of notice of such
redemption (whether by mail or otherwise in accordance with this Indenture) has
been made, and the Trustee has received
<PAGE>
96
such payment from the Company, prior to the occurrence of any of the
contingencies specified in the first two paragraphs of this Section.
SECTION 1503. Subrogation of Rights to Holders of Senior
------------------------------------------
Indebtedness. Subject to the payment in full of all Senior Indebtedness, the
- -------------
Holders of the Securities or coupons appertaining thereto shall be subrogated
(to the extent of the payments or distributions made to the holders of such
Senior Indebtedness pursuant to the provisions of this Article) to the rights of
the holders of such Senior Indebtedness to receive payments or distributions
from the Company applicable to the Senior Indebtedness until the principal of
(and premium, if any) and interest on the Securities, or the coupons
appertaining thereto, shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness to which
the Holders of the Securities or coupons appertaining thereto or the Trustee
would be entitled except for the provisions of this Article, and no payments
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or coupons appertaining thereto or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities or coupons appertaining thereto,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness.
SECTION 1504. Provisions Solely to Define Relative Rights. The
--------------------------------------------
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities or coupons
appertaining thereto, on the one hand, and the holders of Senior Indebtedness,
on the other hand. Nothing contained in this Article or elsewhere in this
Indenture or in the Securities or coupons appertaining thereto is intended to or
shall impair, as between the Company and the Holders of the Securities or
coupons appertaining thereto, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities or coupons
appertaining thereto the principal of (and premium, if any) and interest on the
Securities or coupons appertaining thereto as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights against the Company of the Holders of the Securities or
coupons appertaining thereto and creditors of the Company other than the holders
of Senior Indebtedness, nor shall anything herein or therein prevent the Trustee
or the Holder of any Security or coupon from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash,
<PAGE>
97
property or securities of the Company otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 1505. Trustee to Effectuate Subordination. Each Holder of a
------------------------------------
Security or coupon by his acceptance thereof, whether upon original issue or
upon transfer or assignment, authorizes, and directs the Trustee on his behalf
to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his attorney-in-
fact for any and all such purposes.
SECTION 1506. No Waiver of Subordination Provisions. No right of any
--------------------------------------
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Holders of the Securities, without
incurring responsibility to the Holders of the Securities or coupons
appertaining thereto and without impairing or releasing the subordination
provided in this Article or the obligations of the Holders of the Securities or
coupons appertaining thereto to the holders of Senior Indebtedness, do any one
or more of the following:
(i) change the manner, place or terms of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of Senior
Indebtedness; and
(iv) exercise or refrain from exercising any rights against the Company
and any other Person.
SECTION 1507. Notice to Trustee. The Company shall give prompt
------------------
written notice to the Trustee in the form of an Officers' Certificate of any
fact known to the Company which
<PAGE>
98
would prohibit the making of any payment of money to or by the Trustee in
respect of the Securities or coupons appertaining thereto pursuant to the
provisions of this Article. Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Securities or coupons
appertaining thereto pursuant to the provisions of this Article, unless and
until the Trustee shall have received at its Corporate Trust Office written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor at least two Business Days prior to such payment date;
and, prior to the receipt of any such written notice, the Trustee, subject to
the provisions of Section 6.01, shall be entitled in all respects to assume that
no such facts exist.
Subject to the provisions of Section 6.01, the Trustee shall 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 on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article, 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 1508. Reliance on Certificate of Liquidating Agent. Upon any
---------------------------------------------
payment or distribution referred to in this Article, the Trustee, subject to the
provisions of Section 6.01, and the Holders of the Securities or coupons
appertaining thereto shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which a dissolution, winding up or
total or partial liquidation or reorganization of the Company is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of the
Securities or coupons appertaining thereto, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other
<PAGE>
99
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.
SECTION 1509. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
- -------------
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of the
Securities or coupons appertaining thereto or to the Company or to any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.
SECTION 1510. Rights of Trustee as Holder of Senior Indebtedness.
---------------------------------------------------
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article with respect to any Senior Indebtedness which may at any
time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
SECTION 1511. Article Applicable to Paying Agent. In case at any
-----------------------------------
time any Payment Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise require) be construed as
extending to and including such Payment Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that this Section
-------- -------
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be
<PAGE>
100
an original, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
NATIONAL SERVICE INDUSTRIES, INC.
by
_____________________________________
Name:
Title:
Officer
[ ],
by
_____________________________________
Name:
Title:
<PAGE>
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
Years Ended August 31, May 31,
------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1997 1998
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Pretax income $119,516 $132,198 $150,497 $161,848 $179,078 $118,335 $124,379
Fixed charges
Interest expense 5,813 4,996 4,431 4,903 6,124 4,646 4,688
Capitalized debt cost
Interest portion of rent
expense 3,743 3,528 3,869 3,636 3,776 2,832 3,418
----- ----- ----- ----- ----- ----- -----
Total fixed charges 9,556 8,524 8,300 8,539 9,900 7,478 8,106
Earnings before fixed charges $129,072 $140,722 $158,797 $170,387 $188,978 $125,813 $132,485
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges 13.51 16.51 19.13 19.95 19.09 16.82 16.34
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our firm included in or made a part of this
Registration Statement.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
July 20, 1998
<PAGE>
Exhibit 25.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
___________________
FORM T-1
___________________
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
_____________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
___________________
SUNTRUST BANK, ATLANTA
(Exact name of trustee as specified in its charter)
25 PARK PLACE, N.E.
SUITE 1100
ATLANTA, GEORGIA 30303 58-0466330
(Address of principal executive offices) (Zip Code) (I.R.S. employer
identification no.)
___________________
RONALD PAINTER
SUNTRUST BANK, ATLANTA
3495 PIEDMONT ROAD
BUILDING 10, SUITE 810
ATLANTA, GEORGIA 30305
(404) 240-1932
(Name, address and telephone number of agent for service)
___________________
NATIONAL SERVICE INDUSTRIES, INC.
DELAWARE 58-0364900
(State or other (IRS employer
jurisdiction of incorporation identification no.)
or organization)
1420 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309-3002
(Address of principal executive offices) (Zip Code)
___________________
Senior Debt Securities to be Registered
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
1. General information.
-------------------
Furnish the following information as to the trustee--
Name and address of each examining or supervising authority to which
it is subject.
DEPARTMENT OF BANKING AND FINANCE,
STATE OF GEORGIA
ATLANTA, GEORGIA
FEDERAL RESERVE BANK OF ATLANTA
104 MARIETTA STREET, N.W.
ATLANTA, GEORGIA
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C.
Whether it is authorized to exercise corporate trust powers.
YES.
2. Affiliations with obligor.
-------------------------
If the obligor is an affiliate of the trustee, describe each such
affiliation.
NONE.
16. List of Exhibits.
----------------
List below all exhibits filed as a part of this statement of eligibility;
exhibits identified in parentheses are filed with the Commission and are
incorporated herein by reference as exhibits hereto pursuant to Rule 7a-29
under the Trust Indenture Act of 1939, as amended, and Rule 24 of the
Commission's Rules of Practice.
(1) A copy of the Articles of Amendment and Restated Articles of
Association of the trustee as now in effect. (Exhibit 1 to Form T-1,
Registration No. 333-25463.)
(2) A copy of the certificate of authority of the trustee to commence
business. (included in Exhibit 1.)
(3) A copy of the authorization of the trustee to exercise corporate trust
powers. (included in Exhibit 1.)
(4) A copy of the existing by-laws of the trustee. (included in Exhibit 4
to Form T-1,
<PAGE>
Registration No. 333-25463.)
(6) The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939.
(7) A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority as of the close of business on March 31, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Suntrust Bank, Atlanta, a banking corporation organized and existing
under the laws of the State of Georgia, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Atlanta and the State of Georgia,
on the 21st day of July, 1998.
SUNTRUST BANK, ATLANTA
By: /s/ RONALD PAINTER
-------------------------------
RONALD PAINTER
Vice President
<PAGE>
EXHIBIT 1 TO FORM T-1
ARTICLES OF ASSOCIATION
OF
SUNTRUST BANK, ATLANTA
<PAGE>
EXHIBIT 2 TO FORM T-1
CERTIFICATE OF AUTHORITY
OF
SUNTRUST BANK, ATLANTA
TO COMMENCE BUSINESS
<PAGE>
EXHIBIT 3 TO FORM T-1
AUTHORIZATION
OF
SUNTRUST BANK, ATLANTA
TO EXERCISE CORPORATE TRUST POWERS
<PAGE>
EXHIBIT 4 TO FORM T-1
BY-LAWS
OF
SUNTRUST BANK, ATLANTA
<PAGE>
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939 in connection with the proposed issuance of Senior Debt Securities of
National Service Industries, Inc., Suntrust Bank, Atlanta hereby consents that
reports of examinations by Federal, State, Territorial or District Authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
SUNTRUST BANK, ATLANTA
By:/s/ RONALD PAINTER
-------------------------------
RONALD PAINTER
Vice President
<PAGE>
EXHIBIT 7 TO FORM T-1
REPORT OF CONDITION
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
SUNTRUST BANK ATLANTA Call Date: 03131/98 State #: 130330 FFIEC 031
P.O. BOX 4418 CENTER 632 Vendor ID: D Cert #: 00867 RC-1
ATLANTA, GA 30302 Transit #: 61000104
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
<TABLE>
<CAPTION>
C400
SCHEDULE RC - BALANCE SHEET
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
----
a. Noninterest-bearing balances and currency and
coin (1)................................................................................. 0081 867,073 1.a
b. Interest-bearing balances (2)............................................................ 0071 4,574 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A).............................. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............................ 1773 3,322,133 2.b
3. Federal funds sold and securities purchased under agreements to resell........................ 1350 796,683 3.
4. Loans and lease financing receivables: RCFD
----
a. Loans and leases, net of unearned income (from Schedule RC-C)..... 2122 11,210,585 4.a
b. LESS: Allowance for loan and lease losses.......................... 3123 134,515 4.b
c. LESS: Allocated transfer risk reserve.............................. 3128 0 4.c
d. Loans and leases, net of unearned income, allowance,
and reserve (item 4.a minus 4.b and 4.c)........................... 2125 11,076,070 4.d
RCFD
----
5. Trading assets (from Schedule RC-D)........................................................... 3545 16,724 5.
6. Premises and fixed assets (including capitalized leases)...................................... 2145 101,431 6.
7. Other real estate owned (from Schedule RC-M).................................................. 2150 1,387 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)...... 2130 12,664 8.
9. Customers' liability to this bank on acceptances outstanding.................................. 2155 350,591 9.
10. Intangible assets (from Schedule RC-M)........................................................ 2143 16,265 10.
11. Other assets (from Schedule RC-F)............................................................. 2160 149,944 11.
12. Total assets (sum of items 1 through 11)...................................................... 2170 16,715,539 12.
</TABLE>
- -------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
SUNTRUST BANK ATLANTA Call Date: 03/31/98 State #: 130330 FFIEC 031
P.O. BOX 4418 CENTER 632 Vendor ID: D Cert #: 00867 RC-2
ATLANTA, GA 30302 Transit #: 61000104
SCHEDULE RC - CONTINUED
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, RCON
----
part I).............................................................. RCON 2200 7,190,048 13.a
----
(1) Noninterest-bearing (1).......................................... 6631 2,439,599 13.a.1
(2) Interest-bearing................................................. 6636 4,750,449 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs.. RCFN
(from Schedule RC-E, part II).................................. RCFN ----
---- 2200 855,056 13.b
(1) Noninterest-bearing.............................................. 6631 0 0 13.b.1
(2) Interest-bearing................................................. 6636 855,056 RCFD 13.b.2
----
14. Federal funds purchased and securities sold under agreements 3,858,832 14
to repurchase........................................................................... 2800
RCON
----
15. a. Demand notes issued to the U.S. Treasury.......................................... 2840 0 15.a
RCFD
----
b. Trading liabilities (from Schedule RC-D).......................................... 3548 3 15.b
16. Other borrowed money (includes mortgage indebtedness and obligations
under capitalized leases):
a. With a remaining maturity of one year or less..................................... 2332 564,410 16.a
b. With a remaining maturity of more than one year through........................... A547 2,530 16.b
three years
c. With a remaining maturity of more than three years................................ A548 0 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding................................ 2920 350,591 18
19. Subordinated notes and debentures(2).................................................... 3200 250,000 19
20. Other liabilities (from Schedule RC-G).................................................. 2930 1,232,470 20
21. Total liabilities (sum of items 13 through 20).......................................... 2948 14,303,940 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus........................................... 3838 0 23
24. Common stock............................................................................ 3230 21,601 24
25. Surplus (exclude all surplus related to preferred stock)................................ 3839 573,406 25
26. a. Undivided profits and capital reserves............................................ 3632 611,847 26.a
b. Net unrealized holding gains (losses) on available-............................... 8434 1,204,745 26.b
for-sale securities
27. Cumulative foreign currency translation adjustments..................................... 3284 0 26
28. Total equity capital (sum of items 23 through 27)....................................... 3210 2,411,599 28
29. Total liabilities and equity capital (sum of items 21 and 28)........................... 3300 16,715,539 29
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work performed for the bank FCFD Number
----
by independent external auditors as of any date during 1997............................. 6724 2 M.1
1 = Independent audit of the bank conducted in 4 = Directors' examination of the bank performed by other
accordance with generally accepted auditing external auditors (may be required by state chartering
standards by a certified public accounting firm authority)
which submits a report on the bank
2 = Independent audit of the bank's parent holding 5 = Review of the bank's financial statements by
company conducted in accordance with generally external auditors
accepted auditing standards by a certified 6 = Compilation of the bank's financial statements
public accounting firm which by external auditors
submits a report on the consolidated holding
company (but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing
standards by a certified
public accounting firm (may be required by state
chartering authority)
</TABLE>
________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus,
<PAGE>
Exhibit 25.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
___________________
FORM T-1
___________________
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
_____________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
___________________
SUNTRUST BANK, ATLANTA
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C> <C>
25 PARK PLACE, N.E.
SUITE 1100
ATLANTA, GEORGIA 30303 58-0466330
(Address of principal executive offices) (Zip Code) (I.R.S. employer identification no.)
</TABLE>
___________________
RONALD PAINTER
SUNTRUST BANK, ATLANTA
3495 PIEDMONT ROAD
BUILDING 10, SUITE 810
ATLANTA, GEORGIA 30305
(404) 240-1932
(Name, address and telephone number of agent for service)
___________________
NATIONAL SERVICE INDUSTRIES, INC.
DELAWARE 58-0364900
(State or other (IRS employer
jurisdiction of incorporation identification no.)
or organization)
1420 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309-3002
(Address of principal executive offices) (Zip Code)
___________________
Subordinated Debt Securities to be Registered
(Title of the indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
1. General information.
-------------------
Furnish the following information as to the trustee--
Name and address of each examining or supervising authority to which
it is subject.
DEPARTMENT OF BANKING AND FINANCE,
STATE OF GEORGIA
ATLANTA, GEORGIA
FEDERAL RESERVE BANK OF ATLANTA
104 MARIETTA STREET, N.W.
ATLANTA, GEORGIA
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C.
Whether it is authorized to exercise corporate trust powers.
YES.
2. Affiliations with obligor.
-------------------------
If the obligor is an affiliate of the trustee, describe each such
affiliation.
NONE.
16. List of Exhibits.
----------------
List below all exhibits filed as a part of this statement of eligibility;
exhibits identified in parentheses are filed with the Commission and are
incorporated herein by reference as exhibits hereto pursuant to Rule 7a-29
under the Trust Indenture Act of 1939, as amended, and Rule 24 of the
Commission's Rules of Practice.
(1) A copy of the Articles of Amendment and Restated Articles of
Association of the trustee as now in effect. (Exhibit 1 to Form T-1,
Registration No. 333-25463.)
(2) A copy of the certificate of authority of the trustee to commence
business. (included in Exhibit 1.)
(3) A copy of the authorization of the trustee to exercise corporate trust
powers. (included in Exhibit 1.)
<PAGE>
(4) A copy of the existing by-laws of the trustee. (included in Exhibit 4
to Form T-1, Registration No. 333-25463.)
(6) The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939.
(7) A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority as of the close of business on March 31, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Suntrust Bank, Atlanta, a banking corporation organized and existing
under the laws of the State of Georgia, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Atlanta and the State of Georgia,
on the 21st day of July, 1998.
SUNTRUST BANK, ATLANTA
By: /s/ RONALD PAINTER
------------------
RONALD PAINTER
Vice President
<PAGE>
EXHIBIT 1 TO FORM T-1
ARTICLES OF ASSOCIATION
OF
SUNTRUST BANK, ATLANTA
<PAGE>
EXHIBIT 2 TO FORM T-1
CERTIFICATE OF AUTHORITY
OF
SUNTRUST BANK, ATLANTA
TO COMMENCE BUSINESS
<PAGE>
EXHIBIT 3 TO FORM T-1
AUTHORIZATION
OF
SUNTRUST BANK, ATLANTA
TO EXERCISE CORPORATE TRUST POWERS
<PAGE>
EXHIBIT 4 TO FORM T-1
BY-LAWS
OF
SUNTRUST BANK, ATLANTA
<PAGE>
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939 in connection with the proposed issuance of Senior Debt Securities of
National Service Industries, Inc., Suntrust Bank, Atlanta hereby consents that
reports of examinations by Federal, State, Territorial or District Authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
SUNTRUST BANK, ATLANTA
By:/s/ RONALD PAINTER
---------------------------
RONALD PAINTER
Vice President
<PAGE>
EXHIBIT 7 TO FORM T-1
REPORT OF CONDITION
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
SUNTRUST BANK ATLANTA Call Date: 03131/98 State #: 130330 FFIEC 031
P.O. BOX 4418 CENTER 632 Vendor ID: D Cert #: 00867 RC-1
ATLANTA, GA 30302 Transit #: 61000104
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
C400
SCHEDULE RC - BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin (1)................................. 0081 867,073 1.a
b. Interest-bearing balances (2).......................................................... 0071 4,574 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A)............................. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)........................... 1773 3,322,133 2.b
3. Federal funds sold and securities purchased under agreements to resell...................... 1350 796,683 3.
4. Loans and lease financing receivables: RCFD
----
a. Loans and leases, net of unearned income (from Schedule RC-C)....... 2122 11,210,585 4.a
b. LESS: Allowance for loan and lease losses........................... 3123 134,515 4.b
c. LESS: Allocated transfer risk reserve............................... 3128 0 4.c
d. Loans and leases, net of unearned income, RCFD
----
allowance, and reserve (item 4.a minus 4.b and 4.c).................................... 2125 11,076,070 4.d
5. Trading assets (from Schedule RC-D)......................................................... 3545 16,724 5.
6. Premises and fixed assets (including capitalized leases).................................... 2145 101,431 6.
7. Other real estate owned (from Schedule RC-M)................................................ 2150 1,387 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M).... 2130 12,664 8.
9. Customers' liability to this bank on acceptances outstanding................................ 2155 350,591 9.
10. Intangible assets (from Schedule RC-M)...................................................... 2143 16,265 10.
11. Other assets (from Schedule RC-F)........................................................... 2160 149,944 11.
12. Total assets (sum of items 1 through 11).................................................... 2170 16,715,539 12.
</TABLE>
- -------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
SUNTRUST BANK ATLANTA Call Date: 03/31/98 State #: 130330 FFIEC 031
P.O. BOX 4418 CENTER 632 Vendor ID: D Cert #: 00867 RC-2
ATLANTA, GA 30302 Transit #: 61000104
SCHEDULE RC - CONTINUED Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, RCON
----
part I)______________________________________________________________________ RCON 2200 7,190,048 13.a
----
(1) Noninterest-bearing (1)__________________________________________________ 6631 2,439,599 13.a.1
(2) Interest-bearing_________________________________________________________ 6636 4,750,449 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RCFN
RC-E, ----
2200 855,056 13.b
part II)_____________________________________________________________________ RCFN
----
(1) Noninterest-bearing______________________________________________________ 6631 0 13.b.1
(2) Interest-bearing_________________________________________________________ 6636 855,056 RCFD 13.b.2
----
14. Federal funds purchased and securities sold under agreements to repurchase______________________ 2800 3,858,832 14
RCON
----
15. a. Demand notes issued to the U.S. Treasury___________________________________________________ 2840 0 15.a
RCFD
----
b. Trading liabilities (from Schedule RC-D)____________________________________________________ 3548 3 15.b
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less______________________________________________ 2332 564,410 16.a
b. With a remaining maturity of more one year through three years_____________________________ A547 2,530 16.b
c. With a remaining maturity of more than three years_________________________________________ A548 0 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding________________________________________ 2920 350,591 18
19. Subordinated notes and debentures(2)____________________________________________________________ 3200 250,000 19
20. Other liabilities (from Schedule RC-G)__________________________________________________________ 2930 1,232,470 20
21. Total liabilities (sum of items 13 through 20)__________________________________________________ 2948 14,303,940 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus___________________________________________________ 3838 0 23
24. Common stock____________________________________________________________________________________ 3230 21,601 24
25. Surplus (exclude all surplus related to preferred stock)________________________________________ 3839 573,406 25
26. a. Undivided profits and capital reserves_____________________________________________________ 3632 611,847 26.a
b. Net unrealized holding gains (losses) on avaitable-for-sale securities_____________________ 8434 1,204,745 26.b
27. Cumulative foreign currency translation adjustments_____________________________________________ 3284 0 26
28. Total equity capital (sum of items 23 through 27)_______________________________________________ 3210 2,411,599 28
29. Total liabilities and equity capital (sum of items 21 and 28)___________________________________ 3300 16,715,539 29
</TABLE>
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external RCFD Number auditors as of any date during
1997_____________________________________________________________ 6724 2
M.1
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be chartering authority)
5 = Review of the bank's financial statements by enternal auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
__________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus,
