<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number: 0-11258
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WorldCom, Inc.
(Exact name of registrant as specified in its charter)
----------------------------------------------------------------
Georgia 58-1521612
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
515 East Amite Street, Jackson, Mississippi 39201-2702
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (601) 360-8600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No___
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No___
The number of outstanding shares of the registrant's Common Stock, par
value $.01 per share, was 892,827,126 on April 30, 1997.
================================================================================
<PAGE>
FORM 10-Q
Index
<TABLE>
<CAPTION>
Page
Number
------
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 31, 1997 and December 31, 1996.................3
Consolidated Statements of Operations
for the three months ended March 31, 1997
and March 31, 1996...................................4
Consolidated Statements of Cash Flows for
the three months ended March 31, 1997 and
March 31, 1996.......................................5
Notes to Consolidated Financial Statements...........6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations...........................................9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................14
Item 2. Changes in Securities................................14
Item 3. Defaults upon Senior Securities......................15
Item 4. Submission of Matters to a Vote
of Securities Holders................................15
Item 5. Other Information....................................15
Item 6. Exhibits and Reports on Form 8-K.....................15
Signature .....................................................16
Exhibit Index .....................................................17
</TABLE>
Page 2
<PAGE>
WORLDCOM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, Except Per Share Data)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 68,348 $ 222,729
Marketable securities 57,079 772,510
Accounts receivable, net of allowance for bad debts of $108,831 in 1997
and $110,041 in 1996 1,110,480 999,962
Income taxes receivable 15,526 12,301
Deferred tax asset - 276
Other current assets 379,159 288,314
----------------- ----------------
Total current assets 1,630,592 2,296,092
----------------- ----------------
Property and equipment:
Transmission equipment 2,584,757 2,371,376
Communications equipment 1,476,023 1,296,723
Furniture, fixtures and other 681,056 614,476
----------------- ----------------
4,741,836 4,282,575
Less - accumulated depreciation (481,040) (385,451)
----------------- ----------------
4,260,796 3,897,124
----------------- ----------------
Excess of cost over net tangible assets acquired, net of accumulated amortization 12,939,446 12,947,432
Deferred income taxes 465,149 392,634
Other assets 299,286 328,695
----------------- ----------------
$ 19,595,269 $ 19,861,977
================= ================
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Short-term debt and current maturities of long-term debt $ 19,191 $ 22,424
Accounts payable 454,841 588,738
Accrued line costs 735,996 649,324
Income taxes payable 1,500 1,481
Current deferred taxes payable 14,958 -
Other current liabilities 555,391 648,070
----------------- ----------------
Total current liabilities 1,781,877 1,910,037
----------------- ----------------
Long-term liabilities, less current portion:
Long-term debt 4,617,431 4,803,581
Other liabilities 174,808 188,383
----------------- ----------------
Total long-term liabilities 4,792,239 4,991,964
----------------- ----------------
Commitments and contingencies
Shareholders' investment:
Series A preferred stock, par value $.01 per share; authorized, issued and
outstanding: 94,992 shares in 1997 and 1996 (variable liquidation preference) 1 1
Series B preferred stock, par value $.01 per share; authorized, issued and
outstanding: 12,626,908 shares in 1997 and 12,699,948 in 1996 (liquidation
preference of $1.00 per share plus unpaid dividends) 127 127
Preferred stock, par value $.01 per share; authorized: 34,905,008 shares
in 1997 and 1996 - -
Common stock, par value $.01 per share; authorized: 2,500,000,000 shares; issued
and outstanding: 891,331,263 shares in 1997 and 885,080,264 shares in 1996 8,913 8,851
Additional paid-in capital 14,883,189 14,855,881
Unrealized holding gain on marketable equity securities 19,585 28,832
Retained earnings (deficit) (1,890,662) (1,933,716)
----------------- ----------------
Total shareholders' investment 13,021,153 12,959,976
----------------- ----------------
$ 19,595,269 $ 19,861,977
================= ================
</TABLE>
The accompanying notes are an integral part of these statements.
Page 3
<PAGE>
WORLDCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------
1997 1996
---------------- ----------------
<S> <C> <C>
Revenues $ 1,677,239 $ 1,034,060
---------------- ----------------
Operating expenses:
Line costs 911,469 562,831
Selling, general and administrative 372,347 191,601
Depreciation and amortization 222,903 83,771
---------------- ----------------
Total 1,506,719 838,203
---------------- ----------------
Operating income 170,520 195,857
Other income (expense):
Interest expense (75,455) (57,048)
Miscellaneous 8,401 2,161
---------------- ----------------
Income before income taxes 103,466 140,970
Provision for income taxes 53,802 54,663
---------------- ----------------
Net income 49,664 86,307
Preferred dividend requirement 6,610 505
---------------- ----------------
Net income applicable to common shareholders $ 43,054 $ 85,802
================ ================
Earnings per common share -
Primary $ 0.05 $ 0.22
Fully diluted 0.05 0.21
</TABLE>
The accompanying notes are an integral part of these statements.
Page 4
<PAGE>
WORLDCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 49,664 $ 86,307
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 222,903 83,711
Provision for losses on accounts receivable 24,965 13,529
Provision for deferred income taxes 43,845 41,891
Accreted interest on debt 28,757 -
Change in assets and liabilities, net of effect of
business combinations:
Accounts receivable (136,380) (77,529)
Income taxes, net 3,848 5,948
Other current assets (35,600) (62,314)
Accrued line costs 4,225 23,490
Accounts payable and other current liabilities (34,406) 14,926
Other 1,806 (1,793)
-------------- --------------
Net cash provided by operating activities 173,627 128,166
-------------- --------------
Cash flows from investing activities:
Capital expenditures (492,769) (110,547)
Sale of marketable securities, net 704,095 -
Acquisitions and related costs (244,204) (550)
Increase in intangible assets (21,570) (23,722)
Proceeds from disposition of long-term assets 5,922 4,069
Increase in other assets (64,852) (6,222)
Decrease in other liabilities (25,959) (15,193)
-------------- --------------
Net cash used in investing activities (139,337) (152,165)
-------------- --------------
Cash flows from financing activities:
Principal payments on debt (217,654) (12,213)
Common stock issuance 35,593 14,746
Dividends paid on preferred stock (6,610) (505)
-------------- --------------
Net cash provided by (used in) financing activities (188,671) 2,028
-------------- --------------
Net decrease in cash and cash equivalents (154,381) (21,971)
Cash and cash equivalents at beginning of period 222,729 41,679
-------------- --------------
Cash and cash equivalents at end of period $ 68,348 $ 19,708
============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
Page 5
<PAGE>
WORLDCOM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(A) General
- -----------
The financial statements of WorldCom, Inc. (the "Company" or "WorldCom")
included herein, are unaudited and have been prepared in accordance with
generally accepted accounting principles for interim financial reporting and
Securities and Exchange Commission ("SEC") regulations. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. In the opinion of management,
the financial statements reflect all adjustments (of a normal and recurring
nature) which are necessary to present fairly the financial position, results of
operations and cash flows for the interim periods. These financial statements
should be read in conjunction with the Annual Report of the Company on Form 10-K
for the year ended December 31, 1996. The results for the three month period
ended March 31, 1997, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.
(B) Business Combinations
- -------------------------
On December 31, 1996, WorldCom, through a wholly owned subsidiary, merged with
MFS Communications Company, Inc. ("MFS"). MFS provides telecommunications
services and systems for business and government customers. MFS is a leading
provider of alternative local network access facilities via digital fiber optic
cable networks that it has installed in and around approximately 41 United
States cities, and in several major European cities. MFS also provides domestic
and international long distance telecommunications services via its network
platform, which consists of MFS-owned transmission and switching facilities, and
network capacity leased from other carriers primarily in the United States and
Western Europe.
As a result of the merger (the "MFS Merger"), each share of MFS common stock was
converted into the right to receive 2.1 shares of WorldCom common stock (the
"Common Stock") or approximately 471.0 million WorldCom common shares in the
aggregate. Each share of MFS Series A 8% Cumulative Convertible Preferred Stock
("MFS Series A Preferred Stock") was converted into the right to receive one
share of Series A 8% Cumulative Convertible Preferred Stock of WorldCom
("WorldCom Series A Preferred Stock") or 94,992 shares of WorldCom Series A
Preferred Stock in the aggregate. Each share of MFS Series B Convertible
Preferred Stock was converted into the right to receive one share of Series B
Convertible Preferred Stock of WorldCom ("WorldCom Series B Preferred Stock") or
approximately 12.7 million shares of WorldCom Series B Preferred Stock in the
aggregate. In addition, each depositary share representing 1/100th of a share of
MFS Series A Preferred Stock was exchanged for a depositary share representing
1/100th of a share of WorldCom Series A Preferred Stock.
Upon effectiveness of the MFS Merger, the then outstanding and unexercised
options and warrants exercisable for shares of MFS common stock were converted
into options and warrants, respectively, exercisable for shares of Common Stock
having substantially the same terms and conditions as the MFS options and
warrants, except that (i) the exercise price and the number of shares issuable
upon exercise were divided and multiplied, respectively, by 2.1 and (ii) the
holders of each then outstanding and unexercised MFS "Shareworks Plus Award"
granted under the MFS 1993 Stock Plan instead received the cash value of such
award in accordance with the terms of such plan.
On August 12, 1996, MFS acquired UUNET Technologies, Inc. ("UUNET") through a
merger of a subsidiary of MFS with and into UUNET (the "UUNET Acquisition").
UUNET is a leading worldwide provider of a comprehensive range of Internet
access options, applications, and consulting services to businesses,
professionals and on-line services providers. UUNET provides both dedicated and
dial-up Internet access, and other applications and services which include Web
server hosting and integration services, client software and security products,
training, and network integration and consulting services.
The MFS Merger is being accounted for as a purchase for financial reporting
purposes.
Page 6
<PAGE>
The following unaudited pro forma combined results of operations for the Company
assume that the MFS Merger and the UUNET Acquisition were completed on
January 1, 1996 (in thousands, except per share data):
<TABLE>
<CAPTION>
For the Three
Months Ended
March 31, 1996
--------------
<S> <C>
Revenues $1,243,760
Net loss applicable to common shareholders (81,875)
Loss per common share (0.10)
</TABLE>
These pro forma amounts represent the historical operating results of these
acquired entities combined with those of the Company with appropriate
adjustments which give effect to amortization and the common shares issued.
These pro forma amounts are not necessarily indicative of operating results
which would have occurred if MFS and UUNET had been operated by current
management during the periods presented because these amounts do not reflect
full network optimization and the synergistic effect on operating, selling,
general and administrative expenses.
(C) Supplemental Disclosure of Cash Flow Information
- ----------------------------------------------------
Interest paid by the Company during the three months ended March 31, 1997 and
1996 amounted to $60.5 million and $62.0 million, respectively. Income taxes
paid during the three months ended March 31, 1997 and 1996 were $6.9 million and
$6.8 million, respectively. In conjunction with business combinations during the
three months ended March 31, 1997 and 1996, assumed assets and liabilities were
as follows (in thousands):
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
-------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Fair value of assets acquired $ - $ 595
Excess of cost over net tangible assets acquired 55,272 26,237
Liabilities paid (assumed) 188,932 (26,282)
Common stock issued - -
------------ ------------
Net cash paid $ 244,204 $ 550
============ ============
</TABLE>
(D) Long-term Debt
- ------------------
On April 1, 1997, the Company completed the public offering of $2.0 billion
principal amount of debt securities. The net proceeds of the offering ($1.98
billion) were used to pay down commercial bank debt.
The following table sets forth the long-term debt of the Company as of
March 31, 1997, and as adjusted to give effect to the public offering (in
thousands):
Page 7
<PAGE>
<TABLE>
<CAPTION>
March 31, 1997
------------------------------
Actual As adjusted
----------- ------------
<S> <C> <C>
Revolving credit agreement $ 3,164,300 $ 1,184,603
7.55% Senior Notes Due 2004 - 600,000
7.75% Senior Notes Due 2007 - 1,100,000
7.75% Senior Notes Due 2027 - 300,000
Senior Discount Notes Due 2004 699,861 699,861
Senior Discount Notes Due 2006 678,660 678,660
Other debt 93,801 93,801
----------- ------------
$ 4,636,622 $ 4,656,925
Less: Short-term debt and current maturities 19,191 19,191
----------- ------------
$ 4,617,431 $ 4,637,734
=========== ============
</TABLE>
The 7.55% Senior Notes Due 2004 (the "Notes Due 2004"), which will mature on
April 1, 2004, the 7.75% Senior Notes Due 2007 (the "Notes Due 2007"), which
will mature on April 1, 2007, and the 7.75% Senior Notes Due 2027 (the "Notes
Due 2027"), which will mature on April 1, 2027 (collectively, with the Notes Due
2004 and the Notes Due 2007, the "Notes"), bear interest payable semiannually on
April 1 and October 1 of each year, commencing October 1, 1997, and limit the
incurrence of liens. Each holder of the Notes Due 2027 may require the Company
to repurchase all or a portion of the Notes Due 2027 owned by such holder on
April 1, 2009 at a purchase price equal to 100% of the principal amount thereof.
The Notes Due 2004 and the Notes Due 2007 will be redeemable, as a whole or in
part, at the option of the Company, at any time or from time to time, and the
Notes Due 2027 will be redeemable, as a whole or in part, at the option of the
Company, at any time and from time to time beginning April 2, 2009, at
respective redemption prices equal to the greater of (i) 100% of the principal
amount of the Notes to be redeemed or (ii) the sum of the present values of the
Remaining Scheduled Payments (as defined therein) discounted at the Treasury
Rate (as defined therein) plus 15 basis points for the Notes Due 2004 or plus 20
basis points for the Notes Due 2007 and the Notes Due 2027, plus in the case of
each of clause (i) and (ii) accrued interest to the date of redemption.
(E) Contingencies
- -----------------
IDB Related Investigations. On June 9, 1994, the SEC issued a formal order of
investigation concerning certain matters, including financial position, books
and records and internal controls of IDB Communications Group, Inc. ("IDB"), a
company acquired by WorldCom in December 1994, and trading in IDB securities on
the basis of non-public information. In April 1997, the SEC Staff advised
WorldCom and IDB that the investigation has been terminated and that, at this
time, the SEC has determined not to bring an enforcement action against IDB.
Other. On February 8, 1996, President Clinton signed the Telecommunications Act
of 1996 (the "Telecom Act"), which permits, without limitation, the Bell
Operating Companies (the "BOCs") to provide domestic and international long
distance services to customers located outside of the BOC's home regions;
permits a petitioning BOC to provide domestic and international long distance
service to customers within its home region upon a finding by the Federal
Communications Commission (the "FCC") that a petitioning BOC has satisfied
certain criteria for opening up its local exchange network to competition and
that its provision of long distance services would further the public interest;
and removes existing barriers to entry into local service markets. Additionally,
there are significant changes in: the manner in which carrier-to-carrier
arrangements are regulated at the federal and state level; procedures to revise
universal service standards; and, penalties for unauthorized switching of
customers. The FCC has instituted proceedings addressing the implementation of
this legislation.
On August 8, 1996 the FCC released its First Report and Order in the Matter of
Implementation of the Local Competition Provisions in the Telecom Act (the "FCC
Interconnect Order"). In the FCC Interconnect Order, the FCC established
nationwide rules designed to encourage new entrants to participate in the local
service markets through interconnection with the incumbent local exchange
carriers ("ILEC"), resale of the ILEC's retail services and unbundled network
elements. These
Page 8
<PAGE>
rules set the groundwork for the statutory criteria governing BOC entry into the
long distance market. The Company cannot predict the effect such legislation or
the implementing regulations will have on the Company or the industry. Motions
to stay implementation of the FCC Interconnect Order have been filed with the
FCC and federal courts of appeal. Appeals challenging, among other things, the
validity of the FCC Interconnect Order have been filed in several federal courts
of appeal and assigned to the Eighth Circuit Court of Appeals for disposition.
The Eighth Circuit Court of Appeals has stayed the pricing provisions of the FCC
Interconnect Order. The Circuit Justice of the Supreme Court has declined to
review the propriety of the stay. The Company cannot predict either the outcome
of these challenges and appeals or the eventual effect on its business or the
industry in general.
On December 24, 1996, the FCC released a Notice of Proposed Rulemaking ("NPRM")
seeking to reform the FCC's current access charge policies and practices to
comport with a competitive or potentially competitive local access service
market. On May 7, 1997, the FCC announced that it will issue a series of orders
that reform Universal Service Subsidy allocations, adopt various reforms to the
existing rate structure for interstate access that are designed to reduce access
charges, over time, to more economically efficient levels and rate structures.
In particular, the Commission adopted changes to its rate structures for Common
Line, Local Switching and Local Transport rate elements. The Commission
generally removed from minute-of-use access charges costs that are not incurred
on a per-minute-of-use basis, with such costs being recovered through flat rated
charges. Additional charges and details of the FCC's actions are to be addressed
when Orders are released within the near future. Access charges are a principal
component of the Company's line cost expense. The Company cannot predict whether
or not the result of this proceeding will have a material impact upon its
financial position or results of operations.
In the NPRM, the FCC tentatively concluded that information services providers
(including among others Internet service providers) should not be subject to
existing interstate access charges. However, the FCC recognized that these
services and recent technological advances may be constrained by current
regulatory practices that have their foundations in traditional services and
technologies. The FCC issued on December 24, 1996, a Notice of Inquiry to seek
comment on whether it should, in addition to access charge reform, consider
actions relating to interstate information services and the Internet. Changes in
the regulatory environment relating to the telecommunications or
Internet-related services industry could have an adverse effect on the Company's
Internet-related services business. The Telecom Act may permit
telecommunications companies, BOCs or others to increase the scope or reduce the
cost of their Internet access services. The Company cannot predict the effect
that the Notice of Inquiry, the Telecom Act or any future legislation,
regulation or regulatory changes may have on its business.
The Company is involved in other legal and regulatory proceedings generally
incidental to its business. In some instances, rulings by regulatory authorities
in some states may result in increased operating costs to the Company. While the
results of these various legal and regulatory matters contain an element of
uncertainty, the Company believes that the probable outcome of any of the legal
or regulatory matters, or all of them combined, should not have a material
adverse effect on the Company's consolidated financial position or results of
operations.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Quarterly Report on Form 10-Q may be deemed to include forward looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
that involve risk and uncertainty, including financial, regulatory environment
and trend projections. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that its expectations
will be achieved. The important factors that could cause actual results to
differ materially from those in the forward looking statements herein include,
without limitation, the Company's high degree of financial leverage, risks
associated with debt service requirements and interest rate fluctuations, risks
associated with acquisitions and the integration thereof, risks of international
business, dependence on availability of transmission facilities, regulation
risks including the impact of the Telecom Act, contingent liabilities, and the
impact of competitive services and pricing, as well as other risks referenced
from time to time in the Company's filings with the SEC. The following
discussion and analysis relates to the financial condition and results of
operations of the Company for the three months ended March 31, 1997 and 1996,
and should be read in conjunction with the consolidated financial statements and
notes thereto.
Page 9
<PAGE>
GENERAL
The Company is one of the four largest long distance telecommunications
companies in the United States, serving customers domestically and
internationally. The Company's operations have grown significantly in each year
of its operations as a result of the MFS Merger as well as internal growth, the
selective acquisition of smaller long distance companies with limited geographic
service areas and market shares, the consolidation of certain third tier long
distance carriers with larger market shares, and international expansion.
As a result of the MFS Merger on December 31, 1996, each share of MFS common
stock was converted into the right to receive 2.1 shares of WorldCom Common
Stock or approximately 471.0 million WorldCom common shares in the aggregate.
Each share of MFS Series A Preferred Stock was converted into the right to
receive one share of WorldCom Series A Preferred Stock or 94,992 shares in the
aggregate. Each share of MFS Series B Convertible Preferred Stock was converted
into the right to receive one share of WorldCom Series B Convertible Preferred
Stock or approximately 12.7 million shares in the aggregate. In addition, each
depositary share representing 1/100th of a share of MFS Series A Preferred Stock
was exchanged for a depositary share representing 1/100th of a share of WorldCom
Series A Preferred Stock.
Upon effectiveness of the MFS Merger, the then outstanding and unexercised
options and warrants exercisable for shares of MFS common stock were converted
into options and warrants, respectively, exercisable for shares of Common Stock
having substantially the same terms and conditions as the MFS options and
warrants, except that (i) the exercise price and the number of shares issuable
upon exercise were divided and multiplied, respectively, by 2.1 and (ii) the
holders of each then outstanding and unexercised MFS "Shareworks Plus Award"
granted under the MFS 1993 Stock Plan instead received the cash value of such
option in accordance with the terms of such plan.
MFS provides telecommunications services and systems for business and government
customers. MFS is a leading provider of alternative local network access
facilities via digital fiber optic cable networks that it has installed in and
around approximately 41 United States cities, and in several major European
cities. MFS also provides domestic and international long distance
telecommunications services via its network platform, which consists of
MFS-owned transmission and switching facilities, and network capacity leased
from other carriers primarily in the United States and Western Europe. The MFS
Merger is being accounted for as a purchase; accordingly, the operating results
of MFS are reflected in the Company's results of operations from the acquisition
date.
On August 12, 1996, MFS completed the UUNET Acquisition. UUNET is a leading
worldwide provider of a comprehensive range of Internet access options,
applications, and consulting services to businesses, professionals and on-line
services providers. UUNET provides both dedicated and dial-up Internet access,
and other applications and services which include Web server hosting and
integration services, client software and security products, training, and
network integration and consulting services.
The MFS Merger has allowed the Company to take advantage of the congressional
intent behind the Telecom Act and the FCC Interconnect Order by bringing
together the leading growth companies from four key telecom industry segments:
long distance, local, Internet and international. The Company believes that the
MFS Merger enhances the combined entity's opportunities for future growth,
creates a stronger competitor in the changing telecommunications industry,
allows provision of end-to-end bundled services over a global network, and
provides the opportunity for significant cost savings for the combined
organization.
The most significant portion of the Company's line costs is access charges which
are highly regulated. The FCC has announced that it will revise its rules
regarding access charges in a manner that will, over time, revamp the access
rate element structure and, over the near term, reduce the overall access
revenues collected by the incumbent local exchange carriers. The FCC's rate
element restructuring is intended to align costs with the manner in which they
are incurred by the incumbent local exchange carriers. As a result the current
usage based system will be replaced with a system composed of flat rate charges
and usage based charges. The FCC has also announced that subsidy systems for
local telephone services and services to schools, libraries, and hospitals will
be implemented. A portion of those subsidies are funded by access charges today.
Accordingly, access charges will be reduced by an amount to be transferred to
the subsidy systems. The subsidy systems will result in additional charges being
placed on all carriers, which charges may be directly recovered from the end
users. The Company cannot predict what effect continued regulation and increased
competition between LECs and other IXCs will have on future access charges.
However, the Company believes that it will be able to continue to reduce
transport costs through effective utilization of its network, favorable
contracts with carriers and network efficiencies made possible as a result of
expansion of the Company's customer base by acquisitions and internal growth.
Page 10
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the Company's statement
of operations as a percentage of its operating revenues.
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------
Actual Actual Pro Forma
1997 1996 1996
---- ---- ----
<S> <C> <C> <C>
Revenues 100.0% 100.0% 100.0%
----- ----- -----
Operating expenses:
Line costs 54.3% 54.4% 54.1%
Selling, general and administrative 22.2% 18.5% 24.9%
Depreciation and amortization 13.3% 8.1% 16.6%
----- ----- -----
Operating income 10.2% 18.9% 4.4%
Other income (expense):
Interest expense -4.5% -5.5% -6.5%
Miscellaneous 0.5% 0.2% 0.6%
----- ----- -----
Income (loss) before income taxes 6.2% 13.6% -1.6%
Income tax expense 3.2% 5.3% 4.4%
----- ----- -----
Net income (loss) 3.0% 8.3% -6.0%
Preferred dividend requirement 0.4% 0.0% 0.6%
----- ----- -----
Net income (loss) applicable to common shareholders 2.6% 8.3% -6.6%
===== ===== =====
</TABLE>
Revenues for the three months ended March 31, 1997 increased 62.2% to $1.68
billion on 8.52 billion revenue minutes as compared to $1.03 billion on 5.61
billion revenue minutes for the three months ended March 31, 1997. The increase
in total revenues and minutes is primarily attributable to the MFS Merger and
internal growth of the Company.
On a pro forma basis, as though the MFS Merger and the UUNET Acquisition
occurred at the beginning of 1996, both revenues and traffic for the first
quarter of 1997 increased 35%, compared with pro forma revenues of $1.24 billion
on 6.31 billion revenue minutes for the first quarter of 1996.
The pro forma revenue increase for the first quarter reflect the following
increases by category (dollars in millions):
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------
Actual Pro forma
1997 1996 Change
--------- ---------- ------
<S> <C> <C> <C>
Revenues
Domestic switched $ 951.9 $ 774.0 23%
Domestic private line 352.7 263.3 34%
International 163.8 86.9 89%
Internet 111.2 39.0 185%
------- ------- ---
Core revenues $1,579.6 $1,163.2 36%
Other revenues 97.6 80.6 21%
------- ------- ---
Total revenues $1,677.2 $1,243.8 35%
======= ======= ===
</TABLE>
Domestic switched services revenue for the first quarter experienced a 23
percent pro forma year-over-year increase driven by a gain of 31 percent in
traffic. This increase was due primarily to strong volume gains and more stable
pricing in the business market. Carrier traffic growth, year-over-year, was
particularly strong.
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<PAGE>
Domestic private line revenues for the first quarter experienced a 34 percent
pro forma year-over-year increase due primarily to increased demand for higher
capacity circuits for corporate Intranet and other Internet related services.
International revenues -- those revenues originating outside of the United
States -- for the first quarter of 1997 were $164 million, an increase of 89
percent, as compared with $87 million for the pro forma prior year first
quarter. This performance is due to continuing strong traffic growth in the
United Kingdom and a growing presence in Continental Europe.
Internet revenues for the first quarter were $111 million, up 185 percent over
the pro forma prior year first quarter of $39 million.
Other revenues for the first quarter were $98 million, up 21 percent, as
compared with $81 million for the comparable pro forma period in the prior year.
Other revenues include MFS Network Technologies, operator services, broadcast
operations and other equipment and software sales.
Line costs as a percentage of revenues for the first quarter of 1997 were 54.3%
as compared to 54.4% reported for the same period in the prior year and 54.1%
pro forma for the first quarter of 1996. These changes in line costs as a
percentage of revenues are attributable to changes in the product mix and are
offset by synergies and economies of scale resulting from network efficiencies
achieved from the assimilation of the MFS Merger into the Company's operations.
Selling, general and administrative expenses for the first quarter of 1997
increased to $372.3 million or 22.2% of revenues as compared to $191.6 million
or 18.5% of revenues as reported for the first quarter of 1996. The increase in
selling, general and administrative expenses as a percentage of revenues on a
reported basis results from the Company's expanding operations, primarily
through the MFS Merger. The decrease in selling, general and administrative
expenses as compared to the 1996 pro forma percentage of revenues results from
the assimilation of the MFS Merger into the Company's strategy of cost control.
Depreciation and amortization expense for the first quarter of 1997 increased to
$222.9 million or 13.3% of revenues from $83.8 million or 8.1% of revenues for
the first quarter of 1996. This increase reflects increased amortization
associated with the MFS Merger.
Interest expense in the first quarter of 1997 was $75.5 million or 4.5% of
revenues, as compared to $57.0 million or 5.5% of revenues reported in the first
quarter of 1996. The increase in interest expense is attributable to higher debt
levels as the result of additional debt acquired with the MFS Merger offset by
lower interest rates in effect on the Company's long-term debt.
For the first quarter ended March 31, 1997, net income, taking into account the
increased amortization for intangibles of $84 million related to the MFS Merger,
was $49.7 million, or $0.05 per common share, compared with net income of $86.3
million, or $0.21 per common share as reported for the first quarter of 1996. On
a pro forma basis, loss per share was $0.10 per common share for the first
quarter of 1996.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company's total debt was $4.64 billion, down $189.4
million from December 31, 1996 as a result of the application of available cash
and marketable securities against such debt. Additionally, on April 1, 1997, the
Company completed the public offering of $2.0 billion principal amount of debt
securities. The proceeds from the offering ($1.98 billion) were used to pay down
the Company's $3.75 billion revolving credit facility (the "Credit Facility").
As of April 1, 1997, the Company had access to an additional $2.7 billion under
its Credit Facility and from available cash and marketable securities.
The Credit Facility has a five-year term and bears interest, payable in varying
periods, depending on the interest periods, not to exceed six months, at rates
selected by the Company under the terms of the Credit Facility including a Base
Rate or LIBOR, plus applicable margin. The applicable margin for a LIBOR rate
borrowing varies from 0.35% to 0.875% based upon a specified financial test. The
Credit Facility is unsecured and requires compliance with certain financial and
other
Page 12
<PAGE>
operating covenants which limit, among other things, the incurrence of
additional indebtedness by WorldCom and restricts the payment of cash dividends
to WorldCom's shareholders. The Credit Facility is also subject to an annual
commitment fee not to exceed 0.25% of any unborrowed portion of the Credit
Facility.
Borrowings under the Credit Facility bear interest at rates that fluctuate with
prevailing short-term interest rates. Under the provisions of the Credit
Facility, the Company is required to hedge 25% of its debt against adverse
interest movements in short-term rates. The Company complied with this hedging
requirement prior to April 1, 1997 with interest rate hedging instruments and
subsequent to April 1, 1997, with fixed rate debt issued in the $2.0 billion
public offering of debt securities.
The public offering on April 1, 1997 included $600 million principal amount of
7.55% Senior Notes due 2004, $1.1 billion principal amount of 7.75% Senior Notes
due 2007 and $300 million principal amount of Senior Notes due 2027. The Notes
bear interest payable semiannually on April 1 and October 1 of each year,
commencing October 1, 1997, and limit the incurrence of lines. Each holder of
the Notes Due 2027 may require the Company to repurchase all or a portion of the
Notes Due 2027 owned by such holder on April 1, 2009 at a purchase price equal
to 100% of the principal amount thereof.
The Notes Due 2004 and the Notes Due 2007 will be redeemable, as a whole or in
part, at the option of the Company, at any time or from time to time, and the
Notes Due 2027 will be redeemable, as a whole or in part, at the option of the
Company, at any time and from time to time beginning April 2, 2009, at
respective redemption prices equal to the greater of (i) 100% of the principal
amount of the Notes to be redeemed or (ii) the sum of the present values of the
Remaining Scheduled Payments (as defined therein) discounted at the Treasury
Rate (as defined therein) plus 15 basis points for the Notes Due 2004 or plus 20
basis points for the Notes Due 2007 and the Notes Due 2027, plus in the case of
each of clause (i) and (ii) accrued interest to the date of redemption.
The Company has historically utilized cash flow from operations to finance
capital expenditures and a mixture of cash flow, debt and stock to finance
acquisitions. The Company expects to experience increased capital intensity due
to network expansions and believes that funding needs in excess of internally
generated cash flow will be met by utilization of the Company's Credit Facility.
In connection with the MFS Merger and pursuant to a change of control provision,
WorldCom offered to repurchase the MFS $924.0 million 8 7/8% Senior Discount
Notes due 2006 and the MFS $788.3 million 9 3/8% Senior Discount Notes due 2004
(collectively the "MFS Notes") at 101% of the accreted value as of February 27,
1997, which was $670.0 million and $666.1 million, respectively. The offer to
repurchase began January 28, 1997 and ended February 27, 1997. As of the
expiration approximately $14.3 million of the MFS Notes were repurchased. The
MFS Notes contain certain covenants which, among other things, restrict MFS'
ability to incur additional debt, create liens, enter into sale-leaseback
transactions, pay dividends, make certain restricted payments, enter into
transactions with affiliates and sell assets or merge with another company.
For the three months ended March 31, 1997, the Company's cash flow from
operations was $173.6 million, increasing from $128.2 million in the comparable
period for 1996. The increase in cash flow from operations was primarily
attributable to internal growth.
In the first quarter of 1997, the Company's existing receivables purchase
agreement generated additional proceeds of $7.5 million, bringing the total
amount outstanding to $382.5 million. The Company used these proceeds to reduce
outstanding debt under the Company's Credit Facility. As of March 31, 1997, the
purchaser owned an undivided interest in a $849.1 million pool of receivables
which includes the $382.5 million sold.
Cash used in investing activities in the three months ended March 31, 1997
totaled $139.3 million. The sale of marketable securities provided $704.1
million of cash flow but was used to cover capital expenditures of $492.8
million and acquisition and related costs of $244.2 million primarily from the
MFS Merger. Cash used in investing activities included $369.8 million for normal
capital expenditures and an additional $123.0 million for additional city pair
network construction. Primary capital expenditures include purchases of
switching, transmission, communication and other equipment. Approximately $2.5
billion is currently anticipated for transmission and communications equipment
purchases in 1997 without regard to possible
Page 13
<PAGE>
future acquisitions, if any. This amount includes additional city pair network
construction opportunities which could approximate $500 million to $700 million.
Included in cash flows from financing activities are payments of $6.6 million
for preferred dividend requirements. The Company has never paid cash dividends
on its Common Stock. WorldCom's Credit Facility restricts the payment of cash
dividends on WorldCom capital stock without prior consent of the lenders. The
Depositary Shares are entitled to receive dividends, when, as, and if they are
declared by the Board of Directors, accruing at the rate of $2.68 per share per
annum, payable quarterly in arrears on each February 28, May 31, August 31 and
November 30. Dividends are payable in cash or in shares of Common Stock, at the
election of the Company. The Company paid the initial dividend on February 28,
1997 in cash and expects to continue to pay cash dividends on the WorldCom
Series A Preferred Stock. Dividends on the WorldCom Series B Preferred Stock
accrue at the rate per share of $0.0775 per annum and are payable in cash.
Dividends will be paid only when, as and if declared by the Board of Directors
of the Company. The Company anticipates that dividends on the WorldCom Series B
Preferred Stock will not be declared but will continue to accrue. Upon
conversion, accrued but unpaid dividends are payable in cash or shares of Common
Stock at the Company's election.
Absent significant capital requirements for other acquisitions, the Company
believes that cash flow from operations and funds available under the Credit
Facility will be adequate to meet the Company's capital needs for the remainder
of 1997.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1996, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard ("SFAS") No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities." This Statement
establishes accounting and reporting standards for transfers and servicing of
financial assets and extinguishment of liabilities. The Statement provides
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. This Statement is effective for transfers
and servicing of financial assets and extinguishments of liabilities occurring
after December 31, 1996, and is to be applied prospectively. The adoption of
this standard did not have a material adverse effect on the Company's
consolidated results of operations or financial position.
In February 1997, the FASB issued SFAS 128 "Earnings Per Share." This Statement
establishes standards for computing and presenting earnings per share ("EPS")
and applies to entities with publicly held common stock or potential common
stock. It also requires dual presentation of basic and diluted EPS on the face
of the income statement for all entities with complex capital structures. This
Statement is effective for financial statements issued for periods ending after
December 15, 1997. WorldCom believes that the adoption of this standard will not
have a material effect on the Company's consolidated results of operations or
financial position.
In February 1997, the FASB issued SFAS 129 "Disclosure of Information About
Capital Structure." This Statement establishes standards for disclosing
information about an entity's capital structure and applies to all entities.
This Statement is effective for financial statements for periods ending after
December 15, 1997. WorldCom believes that the adoption of this standard will not
have a material effect on the Company's consolidated results of operations or
financial position.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
There have been no material changes in the legal proceedings reported
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, filed on March 18, 1997 except as may be reflected
in the discussion under Note E of the Notes to Consolidated Financial
Statements in Part I, Item 1, above.
Item 2. Changes in Securities.
None
Page 14
<PAGE>
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
A. Exhibits
See Exhibit Index
B. Reports on Form 8-K
(i) Current Report on Form 8-K dated December 31, 1996 (filed
January 15, 1997), reporting under Item 2, Acquisition or
Disposition of Assets, and Item 7, Financial Statements and
exhibits, information related to the completion of the MFS
Merger.
(ii) Current Report on Form 8-K dated March 18, 1997 (filed
March 24, 1997) reporting under Item 5, Other Events,
information related to the Company's announcement of its
proposal to issued Senior Notes in a partial drawdown of its
previously announced shelf registration statement.
(iii) Current Report on Form 8-K dated March 26, 1997 (filed April 2,
1997) reporting under Item 7(c) Financial Statements and
Exhibits, certain exhibits as required in accordance with Item
601 of Regulation S-K regarding the issuance of $2.0 billion in
Senior Notes.
Page 15
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report on Form 10-Q to be signed on its
behalf by Scott D. Sullivan, thereunto duly authorized to sign on behalf of the
registrant and as the principal financial officer thereof.
WorldCom, Inc.
By: /s/ Scott D. Sullivan
--------------------------------
Scott D. Sullivan
Chief Financial Officer
Dated: May 15, 1997
Page 16
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
1.1 Form of Underwriting Agreement Standard Provisions for Debt
Securities, with form of Terms Agreement (incorporated herein by
reference to Exhibit 1.1 to the Current Report on Form 8-K dated
March 26, 1997)
1.2 Terms Agreement dated March 26, 1997, by and among WorldCom, Inc.
and Salomon Brothers Inc, Goldman, Sachs & Co., Credit Suisse First
Boston and NationsBanc Capital Markets, Inc. (incorporated herein by
reference to Exhibit 1.2 to the Current Report on Form 8-K dated
March 26, 1997)
4.1 Second Amended and Restated Articles of Incorporation of WorldCom,
Inc. (including preferred stock designations) as of December 31, 1996
(incorporated herein by reference to Exhibit 3.1 to the Current Report
on Form 8-K dated December 31, 1996)
4.2 Restated Bylaws of WorldCom, Inc. (incorporated by reference to
Exhibit 4.2 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996)
4.3 Form of 7.55% Senior Note due 2004 (incorporated herein by reference to
Exhibit 4.1 to the Current Report on Form 8-K dated March 26, 1997)
4.4 Form of 7.75% Senior Note due 2007 (incorporated herein by reference to
Exhibit 4.2 to the Current Report on Form 8-K dated March 26, 1997)
4.5 Form of 7.75% Senior Note due 2027 (incorporated herein by reference to
Exhibit 4.3 to the Current Report on Form 8-K dated March 26, 1997)
4.6 Senior Indenture dated March 1, 1997 by and between WorldCom, Inc. and
Mellon Bank, N.A., as trustee
11.1 Computation of per share earnings
27.1 Financial Data Schedule
Page 17
<PAGE>
- ------------------------------------------------------------------------------
WORLDCOM, INC.
TO
MELLON BANK, N.A.
TRUSTEE
____________________________
INDENTURE
DATED AS OF MARCH 1, 1997
____________________________
SENIOR DEBT SECURITIES
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
RECITALS....................................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ......1
SECTION 101. Definitions...................................................2
Act...................................................................2
Additional Amounts....................................................2
Affiliate.............................................................2
Authenticating Agent..................................................2
Authorized Newspaper..................................................2
Bearer Security.......................................................2
Board of Directors....................................................3
Board Resolution......................................................3
Business Day..........................................................3
Capital Lease Obligations.............................................3
Capital Stock.........................................................3
CEDEL.................................................................3
Commission............................................................3
Common Stock..........................................................3
Company...............................................................4
Company Request and Company Order.....................................4
Consolidated Net Tangible Assets......................................4
Conversion Date.......................................................4
Conversion Event......................................................4
Corporate Trust Office................................................4
Corporation...........................................................4
Coupon................................................................4
Currency Indexed Note.................................................4
Defaulted Interest....................................................4
Dollar or $...........................................................5
ECU...................................................................5
Election Date.........................................................5
Euroclear.............................................................5
European Communities..................................................5
European Monetary System..............................................5
Event of Default......................................................5
Exchange Rate Agent...................................................5
Exchange Rate Officer's Certificate...................................5
Foreign Currency......................................................5
GAAP..................................................................5
Government Obligations................................................5
Holder................................................................6
Indenture.............................................................6
i
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Indexed Security......................................................6
Interest..............................................................6
Interest Payment Date.................................................7
Lien..................................................................7
Market Exchange Rate..................................................7
Maturity..............................................................7
Officers' Certificate.................................................7
Opinion of Counsel....................................................8
Original Issue Discount Security......................................8
Outstanding...........................................................8
Paying Agent..........................................................9
Permitted Liens.......................................................9
Person...............................................................10
Place of Payment.....................................................10
Predecessor Security.................................................10
Preferred Stock......................................................10
Property.............................................................10
Receivables Subsidiary...............................................11
Redemption Date......................................................11
Redemption Price.....................................................11
Registered Security..................................................11
Regular Record Date..................................................11
Repayment Date.......................................................11
Repayment Price......................................................11
Responsible Officer..................................................11
Restricted Subsidiary................................................11
Sale and Leaseback Transaction.......................................12
Security.............................................................12
Security Register and Security Registrar.............................12
Special Record Date..................................................12
Stated Maturity......................................................12
Subsidiary...........................................................12
Trust Indenture Act or TIA...........................................12
Trustee..............................................................13
United States........................................................13
United States person.................................................13
Valuation Date.......................................................13
Yield to Maturity....................................................13
SECTION 102. Compliance Certificates and Opinions.........................13
SECTION 103. Form of Documents Delivered to Trustee.......................14
SECTION 104. Acts of Holders..............................................14
SECTION 105. Notices, etc., to Trustee and Company........................16
SECTION 106. Notice to Holders; Waiver....................................16
SECTION 107. Effect of Headings and Table of Contents.....................17
SECTION 108. Successors and Assigns.......................................17
ii
<PAGE>
SECTION 109. Separability Clause........................................ 17
SECTION 110. Benefits of Indenture...................................... 17
SECTION 111. Governing Law.............................................. 18
SECTION 112. Legal Holidays............................................. 18
ARTICLE TWO SECURITIES FORMS............................................ 18
SECTION 201. Forms of Securities........................................ 18
SECTION 202. Form of Trustee's Certificate of Authentication............ 19
SECTION 203. Securities Issuable in Global Form......................... 19
ARTICLE THREE THE SECURITIES............................................ 20
SECTION 301. Amount Unlimited; Issuable in Series....................... 20
SECTION 302. Denominations.............................................. 24
SECTION 303. Execution, Authentication, Delivery and Dating............. 24
SECTION 304. Temporary Securities....................................... 26
SECTION 305. Registration, Registration of Transfer and Exchange........ 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities........... 32
SECTION 307. Payment of Interest; Interest Rights Preserve
Optional Interest Reset.................................... 33
SECTION 308. Extension of Maturity...................................... 36
SECTION 309. Persons Deemed Owners...................................... 37
SECTION 310. Cancellation............................................... 38
SECTION 311. Computation of Interest.................................... 38
SECTION 312. Currency and Manner of Payments in Respect of Securities... 38
SECTION 313. Appointment and Resignation of Successor Exchange Rate
Agent...................................................... 42
ARTICLE FOUR SATISFACTION AND DISCHARGE................................. 43
SECTION 401. Satisfaction and Discharge of Indenture.................... 43
SECTION 402. Application of Trust Funds................................. 44
ARTICLE FIVE REMEDIES................................................... 45
SECTION 501. Events of Default.......................................... 45
SECTION 502. Acceleration of Maturity; Rescission and Annulment......... 47
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee................................................. 48
SECTION 504. Trustee May File Proofs of Claim........................... 48
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons...................................... 49
SECTION 506. Application of Money Collected............................. 49
SECTION 507. Limitation on Suits........................................ 50
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium, if any, and Interest and Additional Amounts....... 50
SECTION 509. Restoration of Rights and Remedies......................... 51
SECTION 510. Rights and Remedies Cumulative............................. 51
SECTION 511. Delay or Omission Not Waiver............................... 51
SECTION 512. Control by Holders of Securities........................... 51
SECTION 513. Waiver of Past Defaults.................................... 51
SECTION 514. Waiver of Usury, Stay or Extension Laws.................... 52
SECTION 515. Undertaking for Costs...................................... 52
iii
<PAGE>
ARTICLE SIX THE TRUSTEE................................................. 53
SECTION 601. Notice of Defaults......................................... 53
SECTION 602. Certain Rights of Trustee.................................. 53
SECTION 603. Not Responsible for Recitals or Issuance of Securities..... 54
SECTION 604. May Hold Securities........................................ 54
SECTION 605. Money Held in Trust........................................ 55
SECTION 606. Compensation and Reimbursement............................. 55
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests.................................................. 55
SECTION 608. Resignation and Removal; Appointment of Successor.......... 56
SECTION 609. Acceptance of Appointment by Successor..................... 57
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business................................................... 58
SECTION 611. Appointment of Authenticating Agent........................ 58
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.......... 61
SECTION 701. Disclosure of Names and Addresses of Holders............... 61
SECTION 702. Reports by Trustee......................................... 61
SECTION 703. Reports by Company......................................... 61
SECTION 704. Company to Furnish Trustee Names and Addresses of
Holders.................................................... 62
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE.......... 62
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain
Conditions............................................... 62
SECTION 802. Rights and Duties of Successor Corporation................. 62
SECTION 803. Officers' Certificate and Opinion of Counsel............... 63
ARTICLE NINE SUPPLEMENTAL INDENTURES.................................... 63
SECTION 901. Supplemental Indentures Without Consent of Holders......... 63
SECTION 902. Supplemental Indentures with Consent of Holders............ 65
SECTION 903. Execution of Supplemental Indentures....................... 66
SECTION 904. Effect of Supplemental Indentures.......................... 66
SECTION 905. Conformity with Trust Indenture Act........................ 66
SECTION 906. Reference in Securities to Supplemental Indentures......... 66
ARTICLE TEN COVENANTS................................................... 67
SECTION 1001. Payment of Principal, Premium, if any, and Interest
and Additional Amounts.................................... 67
SECTION 1002. Maintenance of Office or Agency........................... 67
SECTION 1003. Money for Securities Payments to be Held in Trust......... 69
SECTION 1004. Limitation on Liens....................................... 70
SECTION 1005. Intentionally Omitted..................................... 70
SECTION 1006. Statement as to Compliance................................ 70
SECTION 1007. Additional Amounts........................................ 71
ARTICLE ELEVEN REDEMPTION OF SECURITIES................................. 72
SECTION 1101. Applicability of Article.................................. 72
SECTION 1102. Election to Redeem; Notice to Trustee..................... 72
SECTION 1103. Selection by Trustee of Securities to Be Redeemed......... 72
iv
<PAGE>
SECTION 1104. Notice of Redemption...................................... 72
SECTION 1105. Deposit of Redemption Price............................... 74
SECTION 1106. Securities Payable on Redemption Date..................... 74
SECTION 1107. Securities Redeemed in Part............................... 75
ARTICLE TWELVE SINKING FUNDS............................................ 75
SECTION 1201. Applicability of Article.................................. 75
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities..... 76
SECTION 1203. Redemption of Securities for Sinking Fund................. 76
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS..................... 77
SECTION 1301. Applicability of Article.................................. 77
SECTION 1302. Repayment of Securities................................... 77
SECTION 1303. Exercise of Option........................................ 77
SECTION 1304. When Securities Presented for Repayment Become Due
and Payable............................................... 78
SECTION 1305. Securities Repaid in Part................................. 79
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE..................... 79
SECTION 1401. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance......................... 79
SECTION 1402. Defeasance and Discharge.................................. 79
SECTION 1403. Covenant Defeasance....................................... 80
SECTION 1404. Conditions to Defeasance or Covenant Defeasance........... 80
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions.................. 82
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES....................... 83
SECTION 1502. Call, Notice and Place of Meetings........................ 83
SECTION 1503. Persons Entitled to Vote at Meetings...................... 84
SECTION 1504. Quorum; Action............................................ 84
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings................................... 85
SECTION 1506. Counting Votes and Recording Action of Meetings........... 86
v
<PAGE>
WORLDCOM, INC.
Reconciliation and tie between Trust Indenture Act of
1939 and Indenture, dated as of March 1, 1997
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
(S) 310(a)(1)................................. 607
(a)(2).................................... 607
(b)....................................... 607, 608
(S) 312(c).................................... 701
(S) 313(a).................................... 702
(c)....................................... 702
(S) 314(a).................................... 703
(a)(4).................................... 1006
(c)(1).................................... 102
(c)(2).................................... 102
(e)....................................... 102
(S) 315(b).................................... 601
(S) 316(a) (last sentence)................... 101 ("Outstanding")
(a)(1)(A)................................. 502, 512
(a)(1)(B)................................. 513
(b)....................................... 508
(S) 317(a)(1)................................. 503
(a)(2).................................... 504
(S) 318(a).................................... 111
(c)....................................... 111
- ------------------------
</TABLE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Reference is also made to Section 318(c) of the Trust Indenture Act of
1939, which provides that the provisions of Section 310 to and including Section
317 of the Trust Indenture Act of 1939 are a part of and govern every qualified
indenture, whether or not physically contained therein.
vi
<PAGE>
INDENTURE, dated as of March 1, 1997, between WORLDCOM, INC., a
Georgia corporation (hereinafter called the "Company"), having its principal
office at 515 East Amite Street, Jackson, Mississippi 39201, and MELLON BANK,
N.A., a corporation duly organized and existing under the laws of the United
States, as Trustee hereunder (hereinafter called the "Trustee"), having its
Corporate Trust Office at Two Mellon Bank Center, Pittsburgh, Pennsylvania
15259.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its
lawful purposes senior debt securities (hereinafter called the "Securities")
evidencing its unsecured and unsubordinated indebtedness, and has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to principal amount,
to bear interest at the rate or pursuant to the formula, to mature at such times
and to have such other provisions as shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are deemed to be incorporated into this Indenture and
shall, to the extent applicable, 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, THIS INDENTURE WITNESSETH:
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, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except
-----------
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper", as
used in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the TIA;
<PAGE>
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect at the time of determination; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three, Article Five,
Article Six and Article Ten, are defined in those Articles.
"Act", when used with respect to any Holder, has the meaning specified
---
in Section 104.
"Additional Amounts" means any additional amounts which are required
------------------
by a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on certain Holders and which 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.
"Authenticating Agent" means any authenticating agent appointed by the
--------------------
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed 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 each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bearer Security" means any Security established pursuant to Section
---------------
201 which is payable to bearer.
"Board of Directors" means the board of directors of the Company, the
------------------
executive committee or any committee of that board duly authorized to act
hereunder.
"Board Resolution" means a copy of a resolution certified by the
----------------
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
2
<PAGE>
"Business Day", when used with respect to any Place of Payment or any
------------
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to be closed.
"Capital Lease Obligations" means indebtedness represented by
-------------------------
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP. For purposes of Section 1004, a Capital Lease Obligation shall be
deemed secured by a Lien on the Property being leased.
"Capital Stock" means, with respect to any Person, any and all shares
-------------
or other equivalents (however designated) of corporate stock, partnership
interest or any other participation, right, warrant, option or other interest in
the nature of an equity interest in such person, but excluding any debt security
convertible or exchangeable into such equity interest.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or
-----
its successor.
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Stock" means, with respect to the Company, its common stock,
------------
$.01 par value, and with respect to any Restricted Subsidiary, stock of any
class, however designated, except stock which is non-participating beyond fixed
dividend and liquidation preferences and the holders of which have either no
voting rights or limited voting rights entitling them, only in the case of
certain contingencies, to elect less than a majority of the directors (or
persons performing similar functions) of such Restricted Subsidiary, and shall
include securities of any class, however designated, which are convertible into
such Common Stock.
"Company" means the Person named as the "Company" in the first
-------
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
--------------- --------------
request or order signed in the name of the Company by its Chairman of the Board,
the President or a Vice President, and by its Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Consolidated Net Tangible Assets" means, at any time, the consolidated
--------------------------------
total assets of the Company and its Subsidiaries as reflected in the Company's
then most recent balance sheet prepared in accordance with GAAP, less (i)
current liabilities (excluding current maturities of
3
<PAGE>
long-term debt and Capital Lease Obligations) and (ii) goodwill, trademarks,
patents and minority interests of others.
"Conversion Date" has the meaning specified in Section 312(d).
---------------
"Conversion Event" means the cessation of use of (i) a Foreign
----------------
Currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) any currency
unit (or composite currency) other than the ECU for the purposes for which it
was established.
"Corporate Trust Office" means the office of the Trustee at which, at
----------------------
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Two Mellon Bank
Center, Pittsburgh, Pennsylvania 15259.
"Corporation" includes corporations, associations, companies and
-----------
business trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
------
"Currency Indexed Note" means any Security with the amount of
---------------------
principal payments determined by reference to an index currency.
"Defaulted Interest" has the meaning specified in Section 307.
------------------
"Dollar" or "$" means a dollar or other equivalent unit in such coin
------- -
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from
---
time to time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 312(h).
-------------
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
--------------------
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
------------------------
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article Five.
----------------
"Exchange Rate Agent", with respect to Securities of or within any
-------------------
series, means, unless otherwise specified with respect to any Securities
pursuant to Section 301, a New York Clearing House bank designated pursuant to
Section 301 or Section 313.
4
<PAGE>
"Exchange Rate Officer's Certificate" means a certificate setting
-----------------------------------
forth (i) the applicable Market Exchange Rate or the applicable bid quotation
and (ii) the Dollar or Foreign Currency amounts of principal (and premium, if
any) and interest, if any (on an aggregate basis and on the basis of a Security
having the lowest denomination principal amount determined in accordance with
Section 302 in the relevant currency or currency unit), payable with respect to
a Security of any series on the basis of such Market Exchange Rate or the
applicable bid quotation, signed by the Treasurer, any Vice President or any
Assistant Treasurer of the Company.
"Foreign Currency" means any currency, currency unit or composite
----------------
currency, including, without limitation, the ECU, issued by the government of
one or more countries, other than the United States of America, or by any
recognized confederation or association of such governments.
"GAAP" means United States generally accepted accounting principles as
----
in effect as of the date of determination, unless stated otherwise.
"Government Obligations" means securities which are (i) direct
----------------------
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged, or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Securities of such series are payable, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
------
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"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; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
---------
with respect to any one or more series of Securities for which such Person is
Trustee, 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
the or those particular series of Securities for which such Person is Trustee
5
<PAGE>
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that
----------------
the principal amount thereof payable at Stated Maturity may be more or less than
the principal face amount thereof at original issuance.
"Interest", when used with respect to an Original Issue Discount
--------
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 1007,
includes such Additional Amounts.
"Interest Payment Date", when used with respect to any Security, means
---------------------
the Stated Maturity of an installment of interest on such Security.
"Lien" means, with respect to any Property of any Person, any mortgage
----
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement or zoning restriction (other than any
easement or zoning restriction not materially impairing usefulness or
marketability), encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property including any Capital Lease Obligation, conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing or any Sale and Leaseback Transaction.
"Market Exchange Rate" means, unless otherwise specified with respect
--------------------
to any Securities pursuant to Section 301, (i) for any conversion involving a
currency unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 301 for the
Securities of the relevant series, (ii) for any conversion of Dollars into any
Foreign Currency, the noon buying rate for such Foreign Currency for cable
transfers quoted in New York City as certified for customs purposes by the
Federal Reserve Bank of New York and (iii) for any conversion of one Foreign
Currency into Dollars or another Foreign Currency, the spot rate at noon local
time in the relevant market at which, in accordance with normal banking
procedures, the Dollars or Foreign Currency into which conversion is being made
could be purchased with the Foreign Currency from which conversion is being made
from major banks located in either New York City, London or any other principal
market for Dollars or such purchased Foreign Currency, in each case determined
by the Exchange Rate Agent. Unless otherwise specified with respect to any
Securities pursuant to Section 301, in the event of the unavailability of any of
the exchange rates provided for in the foregoing clauses (i), (ii) and (iii),
the Exchange Rate Agent shall use, in its sole discretion and without liability
on its part, such quotation of the Federal Reserve Bank of New York as of the
most recent available date, or quotations from one or more major banks in New
York City, London or other principal market for such currency or currency unit
in question, or such other quotations as the Exchange Rate
6
<PAGE>
Agent shall deem appropriate. Unless otherwise specified by the Exchange Rate
Agent, if there is more than one market for dealing in any currency or currency
unit by reason of foreign exchange regulations or otherwise, the market to be
used in respect of such currency or currency unit shall be that upon which a
nonresident issuer of securities designated in such currency or currency unit
would purchase such currency or currency unit in order to make payments in
respect of such securities.
"Maturity", when used with respect to any 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, notice of redemption, notice of option to elect
repayment or otherwise.
"Officers' Certificate'" means a certificate signed by the Chairman of
---------------------
the Board of Directors, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Company or who may be an employee of or other counsel for the
Company.
"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:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto, provided that, if such
--------
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402
and 1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fourteen;
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
7
<PAGE>
(v) Securities converted into Common Stock or Preferred Stock in
accordance with or as contemplated by this Indenture, if the terms of such
Securities provide for convertibility pursuant to Section 301;
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 are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined as of the date such Security is originally
issued by the Company as set forth in an Exchange Rate Officer's Certificate
delivered to the Trustee, of the principal amount (or, in the case of an
Original Issue Discount Security, the Dollar equivalent as of such date of
original issuance of the amount determined as provided in clause (i) above) of
such Security, (iii) the principal amount of any Indexed Security that may be
counted in making such determination or calculation and that shall be deemed
outstanding for such purpose shall be equal to the principal face amount of such
Indexed Security at original issuance, unless otherwise provided with respect to
such Security pursuant to Section 301, and (iv) 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 making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned 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.
"Paying Agent" means any Person authorized by the Company to pay the
------------
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Permitted Liens" means (i) Liens existing on the date of this
---------------
Indenture; (ii) Liens on Property existing at the time of acquisition thereof or
to secure the payment of all or any part of the purchase price thereof or to
secure any indebtedness incurred prior to, at the time of or within 270 days
after the acquisition of such Property for the purpose of financing all or any
part of the purchase price thereof; (iii) Liens securing indebtedness owing by a
Restricted Subsidiary to the Company or any wholly-owned Subsidiary of the
Company; (iv) Liens on Property of any entity, or on the stock, indebtedness or
other obligations of such entity, existing at the time (a) such entity becomes a
Restricted Subsidiary, (b) such entity is merged into or consolidated with the
8
<PAGE>
Company or a Restricted Subsidiary or (c) the Company or a Restricted Subsidiary
acquires all or substantially all of the assets of such entity; provided that no
such Lien extends to any other Property of the Company or any other Restricted
Subsidiary; (v) Liens on Property to secure any indebtedness incurred to provide
funds for all or any part of the cost of development of or improvements to such
Property; (vi) Liens on the Property of the Company or any of its Subsidiaries
securing (a) nondelinquent performance of bids or contracts (other than for
borrowed money, obtaining of advances or credit or the securing of debt), (b)
contingent obligations on surety and appeal bonds and (c) other nondelinquent
obligations of a like nature, in each case, incurred in the ordinary course of
business; (vii) Liens securing Capital Lease Obligations, provided that (a) any
such Lien attaches to the Property within 270 days after the acquisition thereof
and (b) such Lien attaches solely to the Property so acquired; (viii) Liens
arising solely by virtue of any statutory or common law provision relating to
banker's liens, rights of set-off or similar rights and remedies as to deposit
account or other funds, provided that such deposit account is not a dedicated
cash collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board and such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution; (ix) pledges or
deposits under worker's compensation laws, unemployment insurance laws or
similar legislation; (x) statutory and tax Liens for sums not yet due or
delinquent or which are being contested or appealed in good faith by appropriate
proceedings; (xi) Liens arising solely by operation of law and in the ordinary
course of business, such as mechanics', materialmen's, warehousemen's and
carriers' Liens and Liens of landlords or of mortgages of landlords on fixtures
and movable Property located on premises leased in the ordinary course of
business; (xii) Liens on personal Property, other than shares of stock or
indebtedness of any Restricted Subsidiary, to secure loans maturing not more
than one year from the date of the creation thereof and on accounts receivable
associated with a receivables financing program of the Company or any of its
Subsidiaries; and (xiii) any renewal, extension or replacement (in whole or in
part) for any Lien permitted pursuant to exceptions (i) through (xii) above or
of any indebtedness secured thereby, provided that such extension, renewal or
replacement Lien shall be limited to all or any part of the same Property that
secured the Lien extended, renewed or replaced (plus improvements on such
Property).
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of or
----------------
within any series, means the place or places where the principal of (and
premium, if any) and interest on such Securities are payable as specified as
contemplated by Sections 301 and 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 or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
9
<PAGE>
"Preferred Stock" means, with respect to the Company, its preferred
---------------
stock, $.01 par value.
"Property" means, with respect to any Person, any interest of such
--------
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in any
other person (but excluding Capital Stock or other securities issued by such
first mentioned Person).
"Receivables Subsidiary" means a special purpose wholly-owned
----------------------
Subsidiary created in connection with any transactions that may be entered into
by the Company or any of its Subsidiaries pursuant to which the Company or any
of its Subsidiaries may sell, convey, grant a security interest in or otherwise
transfer undivided percentage interests in its receivables.
"Redemption Date", when used with respect to any Security to be
---------------
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
----------------
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is registered in
-------------------
the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
-------------------
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security to be
--------------
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
---------------
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
-------------------
the chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "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
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 such officer's knowledge and familiarity with the particular
subject.
"Restricted Subsidiary" means any Subsidiary of the Company if (i)
---------------------
such Subsidiary has substantially all of its Property in the United States
(other than its territories and possessions) and (ii) at the end of the most
recent fiscal quarter of the Company, the aggregate amount, determined in
accordance with GAAP consistently applied, of securities of, loans and advances
to, and other investments in, such Subsidiary held by the Company and its other
10
<PAGE>
Subsidiaries exceeded 10% of the Company's Consolidated Net Tangible Assets;
provided, however, that the term Restricted Subsidiary shall not include (a) any
of MFS Communications Company, Inc. or its Subsidiaries unless and until such
time as such corporation is designated by the Company, by Board Resolution, as a
"Restricted Subsidiary" or otherwise similarly treated under the Company's $3.75
billion five-year revolving credit agreement in effect at the date of this
Indenture or any other agreement of the Company for indebtedness for borrowed
money, or (b) any Receivables Subsidiary .
"Sale and Leaseback Transaction" means, with respect to the Company or
------------------------------
a Restricted Subsidiary, any direct or indirect arrangement pursuant to which
Property is sold or transferred by such Person and is thereafter leased back
from the purchaser or transferee thereof by the Company or a Restricted
Subsidiary.
"Security" has the meaning stated in the first recital of this
--------
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however that, if at any time there
is more than one Person acting as Trustee under this Indenture, "Securities"
with respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"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
-------------------
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
---------------
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable, as such date may be extended pursuant
to the provisions of Section 308.
"Subsidiary" means, in respect of any Person, a corporation a majority
----------
of the outstanding voting stock of which is owned, directly or indirectly, by
such Person or one or more other Subsidiaries of such Person. For the purposes
of this definition, "voting stock" means stock having 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.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
------------------- ----
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
-------
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
- -----------------
11
<PAGE>
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
-------------
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
--------------------
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Valuation Date" has the meaning specified in Section 312(c).
--------------
"Yield to Maturity" means the yield to maturity, computed at the time
-----------------
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
------------------------------------
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1006) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
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(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case
--------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations 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 as 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
as 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 104. Acts of Holders. (a) Any request, demand,
---------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities of
all series or one or more series, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. If Securities of
a series are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and conclusive
in favor of the Trustee and the Company and any agent of the Trustee or the
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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 1506.
(b) 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 reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
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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, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request,
-------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
-------------------------
provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address 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
any case where notice to Holders of Registered Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders of Registered Securities or the sufficiency of any
notice to Holders of Bearer Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in the City
of New York and in such other city or cities as may be specified in such
Securities on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.
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If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
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 107. 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 108. 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 109. Separability Clause. In case any provision in this
-------------------
Indenture or in any Security or coupon 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 110. Benefits of Indenture. Nothing in this Indenture or in
---------------------
the Securities or coupons, express or implied, shall give to any Person, other
than the parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and
-------------
coupons shall be governed by and construed in accordance with the law of the
State of New York without regard to conflicts of laws principles thereof. This
Indenture is subject to the provisions of the TIA that are required to be part
of this Indenture and shall, to the extent applicable, be governed by such
provisions.
SECTION 112. Legal Holidays. In any case where any Interest Payment
--------------
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
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Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium, if any) need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repayment Date or
sinking fund payment date, or at the Stated Maturity or Maturity, provided that
--------
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date, sinking fund
payment date, Stated Maturity or Maturity, as the case may be, to the date of
such payment.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any,
-------------------
of each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms as shall be established in one or
more indentures supplemental hereto or approved from time to time by or pursuant
to a Board Resolution in accordance with Section 301, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
------------------------------------------------
Subject to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
-----------------------------------------
as Trustee
By:
-------------------------------------
Authorized Representative
SECTION 203. Securities Issuable in Global Form. If Securities of or
----------------------------------
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (8) 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 of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased 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 therein
or in the Company Order to be delivered to the Trustee pursuant to Section 303
or 304. Subject to the provisions of Section 303 and, if applicable, Section
304, the Trustee shall deliver and redeliver any Security in permanent global
form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 309 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (15) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall distinguish
the Securities of such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or dates will
be determined or extended, on which the principal of the Securities of the
series shall be payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which such interest will be payable and the Regular Record
Date, if any, for the interest payable on any Registered Security on any
Interest Payment Date, or the method by which such date shall be
determined, and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(5) the place or places, if any, other than or in addition to
Pittsburgh, Pennsylvania, where the principal of (and premium, if any),
interest, if any, on, and Additional Amounts, if any, payable in respect
of, Securities of the series shall be payable, any Registered Securities of
the series may be surrendered for registration of transfer, Securities of
the series may be surrendered for exchange and notices or demands to or
upon the Company in respect of the Securities of the series and this
Indenture may be served;
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<PAGE>
(6) the period or periods within which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other 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 the option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods
within which or the date or dates on which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other terms and conditions upon which Securities
of the series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series
shall be issuable;
(9) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(11) if other than Dollars, the Foreign Currency in which payment of
the principal of (and premium, if any) or interest or Additional Amounts,
if any, on the Securities of the series shall be payable or in which the
Securities of the series shall be denominated and the particular provisions
applicable thereto in accordance with, in addition to or in lieu of any of
the provisions of Section 312;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be determined
with reference to an index, formula or other method (which index, formula
or method may be based, without limitation, on one or more currencies,
currency units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
(13) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, 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, currency unit or units or composite currency or currencies
other than that in which such Securities are denominated or stated to be
payable, the period or periods within which (including the Election Date),
and the terms and conditions upon which, such election may be made, and the
20
<PAGE>
time and manner of determining the exchange rate between the currency or
currencies, currency unit or units or composite currency or currencies in
which such Securities are denominated or stated to be payable and the
currency or currencies, currency unit or units or composite currency or
currencies in which such Securities are to be so payable, in each case in
accordance with, in addition to or in lieu of any of the provisions of
Section 312;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are consistent
with the Events of Default or covenants set forth herein;
(16) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities
and the terms upon which Bearer Securities of the series may be exchanged
for Registered Securities of the series and vice versa (if permitted by
applicable laws and regulations), whether any Securities of the series are
to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form with
or without coupons and, if so, whether beneficial owners of interests in
any such permanent global Security may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305, and, if
Registered Securities of the series are to be issuable as a global
Security, the identity of the depositary for such series;
(17) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(18) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if other
than in the manner provided in Section 304;
(19) the extent, if any, to which the provisions of Sections 1402
and/or 1403 shall be inapplicable to the Securities of the series and any
provisions in modification of, in addition to or in lieu of any of the
provisions of Article Fourteen;
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(20) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or terms
of such certificates, documents or conditions;
(21) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(22) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1007 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have
the option to redeem such Securities rather than pay such Additional
Amounts (and the terms of any such option);
(23) the designation of the initial Exchange Rate Agent, if any; and
(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) 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 Securities
of such series.
SECTION 302. Denominations. The Securities of each series shall be
-------------
issuable in such denominations as shall be specified as contemplated by Section
301. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating. The
----------------------------------------------
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by its Chairman of the Board, its President or one of its Vice
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Presidents, under its corporate seal reproduced thereon, and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
------------------
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
----------------
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and cancelled.
If all the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue.
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 TIA Section 315(a) through
315(d)) shall be fully protected in relying upon,
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(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture 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, subject to
applicable bankruptcy, insolvency, reorganization and other similar
laws of general applicability relating to or affecting the enforcement
of creditors' rights, to general equitable principles and to such
other qualifications as such counsel shall conclude do not materially
affect the rights of Holders of such Securities and any coupons; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities
have been complied with and that, to the best of the knowledge of the
signers of such certificate, no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
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,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee. Notwithstanding
the generality of the foregoing, the Trustee will not be required to
authenticate Securities denominated in a Foreign Currency if the Trustee
reasonably believes that it would be unable to perform its duties with respect
to such Securities.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
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authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized officer, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 310 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities. (a) 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, or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities. In the case of Securities of any series,
such temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), 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; provided, however, that no definitive Bearer Security shall be
-----------------
delivered in exchange for a temporary Registered Security; and provided further
----------------
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
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.
(b) Unless otherwise provided in or pursuant to a Board Resolution,
this Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company.
If any such temporary Security is issued in global form, then such temporary
global Security shall, unless otherwise provided therein, be delivered to the
London office of a depositary or common depositary (the "Common Depositary"),
for the benefit of Euroclear and CEDEL, for credit to the respective accounts of
the beneficial owners of such Securities (or to such other accounts as they may
direct).
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<PAGE>
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
---------
however, that, unless otherwise specified in such temporary global Security,
- -------
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
----------------
shall be delivered in exchange for a portion of a temporary global Security only
in compliance with the requirements of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
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<PAGE>
such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee
of a certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of the Trustee
or in any office or agency of the Company in a Place of Payment a register for
each series of Securities (the registers maintained in such office or in any
such office or agency of the Company in a Place of Payment being herein
sometimes referred to collectively as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and of transfers of Registered
Securities. The Security Register shall be in written form or any other form
capable of being converted into written form within a reasonable time. The
Trustee, at its Corporate Trust Office, is hereby initially appointed "Security
Registrar" for the purpose of registering Registered Securities and transfers of
Registered Securities on such Security Register as herein provided. In the event
that the Trustee shall cease to be Security Registrar, it shall have the right
to examine the Security Register at all reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company 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 Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
27
<PAGE>
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 303) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 301,
at the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
---------
however, that, except as otherwise provided in Section 1002, interest
- -------
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is The Depository Trust Company ("DTC"), then, unless the terms of such
global Security expressly permit such global Security to be exchanged in whole
or in part for definitive Securities, a global Security may be transferred, in
whole but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC,
or to a successor to DTC for such global Security selected or approved by the
Company or to a nominee of such successor to DTC. If at any time DTC notifies
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the Company that it is unwilling or unable to continue as depositary for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 if so
required by applicable law or regulation, the Company shall appoint a successor
depositary with respect to such global Security or Securities. If (x) a
successor depositary for such global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable series of Securities represented by such
global Security or Securities advise DTC to cease acting as depositary for such
global Security or Securities or (z) the Company, in its sole discretion,
determines at any time that all Outstanding Securities (but not less than all)
of any series issued or issuable in the form of one or more global Securities
shall no longer be represented by such global Security or Securities, then the
Company shall execute, and the Trustee shall authenticate and deliver,
definitive Securities of like series, rank, tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such global
Security or Securities. If any beneficial owner of an interest in a permanent
global Security is otherwise 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 and provided that
any applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver, definitive Securities
in aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent global Security
shall be surrendered for exchange by DTC or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
-----------------
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
----------------
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent global Security is payable in accordance with 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
29
<PAGE>
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i)
to issue, register the transfer of or exchange any Security if such Security may
be among those selected for redemption during a period beginning at the opening
of business 15 days before selection of the Securities to be redeemed under
Section 1103 and ending at the close of business on (A) if such Securities are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if such Securities are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
--------
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If
------------------------------------------------
any mutilated Security or a Security with a mutilated coupon appertaining to it
is surrendered to the Trustee or the Company, together with, in proper cases,
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
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request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
-----------------
any interest on and any Additional Amounts with respect to, Bearer Securities
shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
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.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved; Optional
--------------------------------------------------------
Interest Reset. (a) Except as otherwise specified with respect to a series of
- --------------
Securities in accordance with the provisions of Section 301, interest on any
Registered Security that 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 at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; provided,
---------
however, that each installment of interest on any Registered Security may at the
- -------
Company's option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 309,
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to the address of such Person as it appears on the Security Register or (ii)
transfer to an account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment (which shall not be less than 20 days after such notice is
received by the Trustee), and at the same time the Company shall deposit
with the Trustee an amount of money in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities
of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) 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 on or 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
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Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities of
such series at 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 in each
place of payment, but such publications shall not be a condition precedent
to the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2). In case a Bearer Security of any
series is surrendered at the office or agency in a Place of Payment for
such series in exchange for a Registered Security of such series after the
close of business at such office or agency on any Special Record Date and
before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall
be surrendered without the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be 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.
(b) The provisions of this Section 307(b) may be made applicable to
any series of Securities pursuant to Section 301 (with such modifications,
additions or substitutions as may be specified pursuant to such Section 301).
The interest rate (or the spread or spread multiplier used to calculate such
interest rate, if applicable) on any Security of such series may be reset by the
Company on the date or dates specified on the face of such Security (each an
"Optional Reset Date"). The Company may exercise such option with respect to
such Security by notifying the Trustee of such exercise and the related
information referred to below at least 50 but not more than 60 days prior to an
Optional Reset Date for such Security. Not later than 40 days prior to each
Optional Reset Date, the Trustee shall transmit, in the manner provided for in
Section 106, to the Holder of any such Security a notice (the "Reset Notice")
indicating whether the Company has elected to reset the interest rate (or the
spread or spread multiplier used to calculate such interest rate, if
applicable), and if so, upon receipt of such information (i) such new interest
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rate (or such new spread or spread multiplier, if applicable) and (ii) the
provisions, if any, for redemption during the period from such Optional Reset
Date to the next Optional Reset Date or if there is no such next Optional Reset
Date, to the Stated Maturity Date of such Security (each such period a
"Subsequent Interest Period"), including the date or dates on which or the
period or periods during which and the price or prices at which such redemption
may occur during the Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
(or the spread or spread multiplier used to calculate such interest rate, if
applicable) provided for in the Reset Notice and establish an interest rate (or
a spread or spread multiplier used to calculate such interest rate, if
applicable) that is higher than the interest rate (or the spread or spread
multiplier, if applicable) provided for in the Reset Notice, for the Subsequent
Interest Period by causing the Trustee to transmit, in the manner provided for
in Section 106, notice of such higher interest rate (or such higher spread or
spread multiplier, if applicable) to the Holder of such Security. Such notice
shall be irrevocable. All Securities with respect to which the interest rate (or
the spread or spread multiplier used to calculate such interest rate, if
applicable) is reset on an Optional Reset Date, and with respect to which the
Holders of such Securities have not tendered such Securities for repayment (or
have validly revoked any such tender) pursuant to the next succeeding paragraph,
will bear such higher interest rate (or such higher spread or spread multiplier,
if applicable).
The Holder of any such Security will have the option to elect
repayment by the Company of the principal of such Security on each Optional
Reset Date at a price equal to the principal amount thereof plus interest
accrued to such Optional Reset Date. In order to obtain repayment on an Optional
Reset Date, the Holder must follow the procedures set forth in Article Thirteen
for repayment at the option of Holders except that the period for delivery or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to such Optional Reset Date and except that, if the Holder has tendered any
Security for repayment pursuant to the Reset Notice, the Holder may, by written
notice to the Trustee, revoke such tender or repayment until the close of
business on the tenth day before such Optional Reset Date.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Extension of Maturity. The provisions of this Section
---------------------
308 may be made applicable to any series of Securities pursuant to Section 301
(with such modifications, additions or substitutions as may be specified
pursuant to such Section 301) (any series of Securities to which the provisions
of this Section 308 are made applicable are hereinafter referred to as the
"Renewable Securities"). The Renewable Securities shall mature on the initial
Stated Maturity thereof unless the maturity of all or any portion of the
principal amount thereof is extended pursuant to the procedures described below.
On the Interest Payment Dates in each year, the maturity of the Renewable
Securities will be extended to the Interest Payment Date occurring twelve months
after such Interest Payment Date, unless the Holder thereof elects to terminate
the automatic extension of the maturity of the Renewable Securities or of any
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portion thereof having a principal amount of $100,000 or any multiple of $1,000
in excess thereof by delivering a notice to such effect to the Security
Registrar for the Renewable Securities not less than 25 nor more than 35 days
prior to such Interest Payment Date. Such notice shall be provided in the manner
described in the last paragraph of this Section 308. Such option may be
exercised by a Holder with respect to less than the entire principal amount of
such Holder's Renewable Securities, provided that the principal amount for which
such option is not exercised is at least $100,000 or any larger amount that is
an integral multiple of $1,000. Notwithstanding the foregoing, the maturity of
the Renewable Securities may not be extended beyond the date set forth on the
face of such Security as the final maturity date (the "Final Maturity Date"). If
the Holder elects to terminate the automatic extension of the maturity of any
portion of the principal amount of the Renewable Securities, such portion will
become due and payable on the Interest Payment Date falling six months after the
Interest Payment Date prior to which the Holder made such election.
An election to terminate the automatic extension of maturity may be
revoked as to any portion of the Renewable Securities having a principal amount
of $100,000 or any multiple of $1,000 in excess thereof by delivering a notice
to such effect to the Security Registrar on any day following the effective date
of the election to terminate the automatic extension of maturity and prior to
the date 10 days before the date on which such portion would otherwise mature.
Such notice shall be provided in the manner described in the last paragraph of
this Section 308. Such a revocation may be made for less than the entire
principal amount of the Renewable Securities for which the automatic extension
of maturity has been terminated; provided that the principal amount of the
Renewable Securities for which the automatic extension of maturity has been
terminated and for which such a revocation has not been made is at least
$100,000 or any larger amount that is an integral multiple of $1,000.
Notwithstanding the foregoing, a revocation may not be made during the period
from and including a Regular Record Date to but excluding the immediately
succeeding Interest Payment Date.
An election to terminate the automatic extension of the maturity of
the Renewable Securities, if not revoked as described above by the Holder making
the election or any subsequent Holder, will be binding upon such subsequent
Holder.
The Renewable Securities may be redeemed in whole or in part at the
option of the Company on the Interest Payment Dates in each year at a redemption
price of 100% of the principal amount of the Renewable Securities to be
redeemed, together with interest accrued and unpaid thereon to the date of
redemption. Notice of redemption will be provided by mailing a notice of such
redemption to each Holder by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to the
respective address of each Holder as that address appears upon the books
maintained by the Registrar.
Notwithstanding the foregoing, not later than 20 days before the
original Stated Maturity of such Security, the Company may, at its option,
revoke the interest rate provided for in the Extension Notice and establish a
higher interest rate for the Extension Period by causing the Trustee to
transmit, in the manner provided for in Section 106, notice of such higher
interest rate to the Holder of such Security. Such notice shall be irrevocable.
All Securities with respect to which the Stated Maturity is extended will bear
such higher interest rate.
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In order to deliver notice to the Security Registrar for purposes of
terminating (with respect to all or a portion of a Renewable Security) an
automatic extension of maturity, the Holder must follow the procedures set forth
in Article Thirteen for repayment at the option of Holders, except that the
period for delivery of notification to the Trustee shall be at least 25 but not
more than 35 days prior to the Original Stated Maturity and except that, if the
Holder has so elected to tender any Renewable Security for repayment, the Holder
may by written notice to the Trustee revoke such tender for repayment until the
close of business on the tenth day before the Original Stated Maturity.
SECTION 309. Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the Holder of any Bearer Security and the Holder of any
coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 310. Cancellation. All Securities and coupons surrendered
------------
for payment, redemption, repayment at the 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,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any Securities
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previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. Cancelled Securities and coupons held by
the Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless by a Company Order the
Company directs their return to it.
SECTION 311. Computation of Interest. Except as otherwise specified
-----------------------
as contemplated by Section 301 with respect to Securities of any series,
interest on the Securities of each series shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
SECTION 312. Currency and Manner of Payments in Respect of
---------------------------------------------
Securities. (a) Unless otherwise specified with respect to any Securities
- -----------
pursuant to Section 301, with respect to Registered Securities of any series not
permitting the election provided for in paragraph (b) below or the Holders of
which have not made the election provided for in paragraph (b) below, and with
respect to Bearer Securities of any series, except as provided in paragraph (d)
below, payment of the principal of (and premium, if any) and interest, if any,
on, and Additional Amounts, if any, in respect of any Registered or Bearer
Security of such series will be made in the currency or currencies, currency
unit or units or composite currency or currencies in which such Registered
Security or Bearer Security, as the case may be, is payable. The provisions of
this Section 312 may be modified or superseded with respect to any Securities
pursuant to Section 301.
(b) It may be provided pursuant to Section 301 with respect to
Registered Securities of any series that Holders shall have the option, subject
to paragraphs (d) and (e) below, to receive payments of principal of (and
premium, if any) or interest, if any, on and Additional Amounts, if any, in
respect of such Registered Securities in any of the currencies, currency units
or composite currencies which may be designated for such election by delivering
to the Trustee for such series of Registered Securities a written election with
signature guarantees and in the applicable form established pursuant to Section
301, not later than the close of business on the Election Date immediately
preceding the applicable payment date. If a Holder so elects to receive such
payments in any such currency, currency unit or composite currency, such
election will remain in effect for such Holder or any transferee of such Holder
until changed by such Holder or such transferee by written notice to the Trustee
for such series of Registered Securities (but any such change must be made not
later than the close of business on the Election Date immediately preceding the
next payment date to be effective for the payment to be made on such payment
date and no such change of election may be made with respect to payments to be
made on any Registered Security of such series with respect to which an Event of
Default has occurred or with respect to which the Company has deposited funds
pursuant to Article Four or Fourteen or with respect to which a notice of
redemption has been given by the Company or a notice of option to elect
repayment has been sent by such Holder or such transferee). Any Holder of any
such Registered Security who shall not have delivered any such election to the
Trustee of such series of Registered Securities not later than the close of
business on the applicable Election Date will be paid the amount due on the
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applicable payment date in the relevant currency or currencies, currency unit or
units or composite currency or currencies as provided in Section 312(a). The
Trustee for each such series of Registered Securities shall notify the Exchange
Rate Agent as soon as practicable after the Election Date of the aggregate
principal amount of Registered Securities for which Holders have made such
written election.
(c) Unless otherwise specified pursuant to Section 301, if the
election referred to in paragraph (b) above has been provided for pursuant to
Section 301, then, unless otherwise specified pursuant to Section 301, not later
than the fourth Business Day after the Election Date for each payment date for
Registered Securities of any series, the Exchange Rate Agent will deliver to the
Company a written notice specifying, in the currency or currencies, currency
unit or units or composite currency or currencies in which Registered Securities
of such series are payable, the respective aggregate amounts of principal of
(and premium, if any) and interest, if any, on, and Additional Amounts, if any,
in respect of the Registered Securities to be paid on such payment date,
specifying the amounts in such currency or currencies, currency unit or units or
composite currency or currencies so payable in respect of the Registered
Securities as to which the Holders of Registered Securities denominated in any
currency or currencies, currency unit or units or composite currency or
currencies shall have elected to be paid in another currency, currency unit or
composite currency as provided in paragraph (b) above. If the election referred
to in paragraph (b) above has been provided for pursuant to Section 301 and if
at least one Holder has made such election, then, unless otherwise specified
pursuant to Section 301, on the second Business Day preceding such payment date
the Company will deliver to the Trustee for such series of Registered Securities
an Exchange Rate Officer's Certificate in respect of the Dollar, Foreign
Currency or currencies, ECU or currency unit payments to be made on such payment
date. Unless otherwise specified pursuant to Section 301, the Dollar, Foreign
Currency or currencies, ECU or currency unit amount receivable by Holders of
Registered Securities who have elected payment in a currency or currency unit as
provided in paragraph (b) above shall be determined by the Exchange Rate Agent
based on the highest bid quotation in The City of New York received at
approximately 11:00 A.M., New York City time, on the second Business Day (the
"Valuation Date") preceding the applicable payment date from three recognized
foreign exchange dealers for the purchase by the quoting dealer of the currency,
currency unit or composite currency in which such payment would otherwise be
made for the currency, currency unit or composite currency in which Holders have
elected payment for settlement on such payment date in the aggregate amount of
the currency, currency unit or composite currency in which such payment would
otherwise be made to such Holders and at which the applicable dealer commits to
execute a contract, and such determination shall be conclusive and binding for
all purposes, absent manifest error. If such bid quotations are not available,
payments will be made in the currencies, currency units or composite currencies
in which the Registered Securities are payable as if no election under paragraph
(b) above was made. All currency exchange costs will be borne by the Holders
making the election provided for in paragraph (b) above by deductions from
payments to such Holders.
(d) If a Conversion Event occurs with respect to a Foreign Currency,
the ECU or any other currency unit in which any of the Securities are
denominated or payable other than pursuant to an election provided for pursuant
to paragraph (b) above, then with respect to each date for the payment of
principal of (and premium, if any) and interest, if any, on, and Additional
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Amounts, if any, in respect of, the applicable Securities denominated or payable
in such Foreign Currency, the ECU or such other currency unit occurring after
the last date on which such Foreign Currency, the ECU or such other currency
unit was used (the "Conversion Date"), the Dollar shall be the currency of
payment for use on each such payment date. Unless otherwise specified pursuant
to Section 301, the Dollar amount to be paid by the Company to the Trustee of
each such series of Securities and by such Trustee or any Paying Agent to the
Holders of such Securities with respect to such payment date shall be, in the
case of a Foreign Currency other than a currency unit, the Dollar Equivalent of
the Foreign Currency or, in the case of a currency unit, the Dollar Equivalent
of the Currency Unit, in each case as determined by the Exchange Rate Agent in
the manner provided in paragraph (f) or (g) below.
(e) Unless otherwise specified pursuant to Section 301, if the Holder
of a Registered Security denominated in any currency or currencies, currency
unit or units or composite currency or currencies shall have elected to be paid
in another currency or currencies, currency unit or units or composite currency
or currencies as provided in paragraph (b) above, and a Conversion Event occurs
with respect to such elected currency or currencies, currency unit or units or
composite currency or currencies, such Holder shall receive payment in the
currency or currencies, currency unit or units or composite currency or
currencies in which payment would have been made in the absence of such
election; and if a Conversion Event occurs with respect to the currency or
currencies, currency unit or units or composite currency or currencies in which
payment would have been made in the absence of such election, such Holder shall
receive payment in Dollars as provided in paragraph (d) of this Section 312.
(f) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Exchange Rate Agent and shall be obtained for each subsequent
payment date by converting the specified Foreign Currency into Dollars at the
Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined
by the Exchange Rate Agent and subject to the provisions of paragraph (h) below
shall be the sum of each amount obtained by converting the Specified Amount of
each Component Currency into Dollars at the Market Exchange Rate for such
Component Currency on the Valuation Date with respect to each payment.
(h) For purposes of this Section 312, the following terms shall have
the following meanings:
A "Component Currency" shall mean any currency which, on the
Conversion Date, was a component currency of the relevant currency unit or
composite currency, including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the number of
units of such Component Currency or fractions thereof which were
represented in the relevant currency unit or composite currency, including,
but not limited to, the ECU, on the Conversion Date. If after the
Conversion Date the official unit of any Component Currency is altered by
way of combination or subdivision, the Specified Amount of such Component
Currency shall be divided or multiplied in the same proportion. If after
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the Conversion Date two or more Component Currencies are consolidated into
a single currency, the respective Specified Amounts of such Component
Currencies shall be replaced by an amount in such single currency equal to
the sum of the respective Specified Amounts of such consolidated Component
Currencies expressed in such single currency, and such amount shall
thereafter be a Specified Amount and such single currency shall thereafter
be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more currencies, the Specified Amount
of such Component Currency shall be replaced by amounts of such two or more
currencies, having an aggregate Dollar Equivalent value at the Market
Exchange Rate on the date of such replacement equal to the Dollar
Equivalent of the Specified Amount of such former Component Currency at the
Market Exchange Rate immediately before such division, and such amounts
shall thereafter be Specified Amounts and such currencies shall thereafter
be Component Currencies. If, after the Conversion Date of the relevant
currency unit, including, but not limited to, the ECU, a Conversion Event
(other than any event referred to above in this definition of "Specified
Amount") occurs with respect to any Component Currency of such currency
unit and is continuing on the applicable Valuation Date, the Specified
Amount of such Component Currency shall, for purposes of calculating the
Dollar Equivalent of the Currency Unit, be converted into Dollars at the
Market Exchange Rate in effect on the Conversion Date of such Component
Currency.
"Election Date" shall mean the Regular Record Date for the applicable
series of Registered Securities or at least 16 days prior to Maturity, as
the case may be, or such other prior date for any series of Registered
Securities as specified pursuant to clause 13 of Section 301 by which the
written election referred to in Section 312(b) may be made.
All decisions and determinations of the Exchange Rate Agent regarding
the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the
Currency Unit, the Market Exchange Rate and changes in the Specified Amounts as
specified above shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Company, the Trustee for the appropriate series of Securities and all Holders of
such Securities denominated or payable in the relevant currency or currencies,
currency unit or units or composite currency or currencies. The Exchange Rate
Agent shall promptly give written notice to the Company and the Trustee for the
appropriate series of Securities of any such decision or determination.
In the event that the Company determines in good faith that a
Conversion Event has occurred with respect to a Foreign Currency, the Company
will immediately give written notice thereof to the Trustee of the appropriate
series of Securities and to the Exchange Rate Agent (and such Trustee will
promptly thereafter give notice in the manner provided in Section 106 to the
affected Holders) specifying the Conversion Date. In the event the Company so
determines that a Conversion Event has occurred with respect to the ECU or any
other currency unit in which Securities are denominated or payable, the Company
will immediately give written notice thereof to the Trustee of the appropriate
series of Securities and to the Exchange Rate Agent (and such Trustee will
promptly thereafter give notice in the manner provided in Section 106 to the
affected Holders) specifying the Conversion Date and the Specified Amount of
each Component Currency on the Conversion Date. In the event the Company
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determines in good faith that any subsequent change in any Component Currency as
set forth in the definition of Specified Amount above has occurred, the Company
will similarly give written notice to the Trustee of the appropriate series of
Securities and to the Exchange Rate Agent.
The Trustee of the appropriate series of Securities shall be fully
justified and protected in relying and acting upon information received by it
from the Company and the Exchange Rate Agent and shall not otherwise have any
duty or obligation to determine the accuracy or validity of such information
independent of the Company or the Exchange Rate Agent.
SECTION 313. Appointment and Resignation of Successor Exchange Rate
------------------------------------------------------
Agent. (a) Unless otherwise specified pursuant to Section 301, if and so long
- -----
as the Securities of any series (i) are denominated in a currency other than
Dollars or (ii) may be payable in a currency other than Dollars, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one Exchange Rate Agent. The Company will cause the Exchange Rate Agent
to make the necessary foreign exchange determinations at the time and in the
manner specified pursuant to Section 301 for the purpose of determining the
applicable rate of exchange and, if applicable, for the purpose of converting
the issued currency or currencies, currency unit or units or composite currency
or currencies into the applicable payment currency or currency unit for the
payment of principal (and premium, if any) and interest, if any, and Additional
Amounts, if any, pursuant to Section 312.
(b) No resignation of the Exchange Rate Agent and no appointment of a
successor Exchange Rate Agent pursuant to this Section shall become effective
until the acceptance of appointment by the successor Exchange Rate Agent as
evidenced by a written instrument delivered to the Company and the Trustee of
the appropriate series of Securities accepting such appointment executed by the
successor Exchange Rate Agent.
(c) If the Exchange Rate Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Exchange
Rate Agent for any cause, with respect to the Securities of one or more series,
the Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Exchange Rate Agent or Exchange Rate Agents with respect to the
Securities of that or those series (it being understood that any such successor
Exchange Rate Agent may be appointed with respect to the Securities of one or
more or all of such series and that, unless otherwise specified pursuant to
Section 301, at any time there shall only be one Exchange Rate Agent with
respect to the Securities of any particular series that are originally issued by
the Company on the same date and that are initially denominated and/or payable
in the same currency or currencies, currency unit or units or composite currency
or currencies).
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ARTICLE FOUR
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 any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1007), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than
(i) coupons appertaining to Bearer Securities surrendered for exchange
for Registered Securities and maturing after such exchange, whose
surrender is not required or has been waived as provided in Section
305, (ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption Date,
whose surrender has been waived as provided in Section 1106, and (iv)
Securities and coupons of such series for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003), have been delivered to the
Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if then redeemable at the option of the Company, are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency or
currencies, currency unit or units or composite currency or currencies
in which the Securities of such series are payable, sufficient to pay
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and discharge the entire indebtedness on such Securities and such
coupons not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest, and any Additional
Amounts with respect thereto, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the provisions
--------------------------
of the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any), and any interest and
Additional Amounts for whose payment such money has been deposited with or
received by the Trustee, but such money need not be segregated from other funds
except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default", wherever used
-----------------
herein with respect to any particular series of Securities, except as may be
provided with respect to such series pursuant to Section 301, means any one of
the following events (whatever the reason for such Event of Default and whether
or not 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):
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
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(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its
Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or other evidence of
indebtedness of the Company (including a default with respect to Securities
of any series other than that series) or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness of the Company (including this Indenture),
whether such indebtedness now exists or shall hereafter be created, which
default shall constitute a failure to pay an aggregate principal amount
exceeding $50,000,000 of such indebtedness when due and payable after the
expiration of any applicable grace period with respect thereto and shall
have resulted in such indebtedness in an aggregate principal amount
exceeding $50,000,000 becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have
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 10% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" hereunder;
provided, however, that if such default under such bond, debenture, note,
-----------------
mortgage, indenture or other instrument or evidence of indebtedness shall
be remedied or cured by the Company or waived pursuant to such agreement or
instrument, then, unless the Stated Maturity of the Securities shall have
been accelerated as provided herein, the Event of Default hereunder by
reason thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of either the Trustee
or the Holders; or
(6) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
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(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company,
and, in any such case, such order or decree remains unstayed and in effect
for 90 days; or
(8) any other Event of Default provided with respect to Securities of
that series pursuant to Section 301.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or other similar official under any Bankruptcy
Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If
--------------------------------------------------
an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series and
except, if applicable, as provided in Sections 312(b), 312(d) and 312(e)):
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(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that
series and any related coupons,
(B) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
borne by or provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium, if any) or
interest on Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if:
- -------
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related
coupon when such interest or Additional Amount becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
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judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series 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
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of 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 of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts, if
any, 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
(ii) 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 of Securities of such series and coupons 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 to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
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SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities or Coupons. All rights of action and claims under this Indenture or
- ---------------------
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by
------------------------------
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest and any
Additional Amounts, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest and
any Additional Amounts payable, 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 aggregate amounts due and payable on
such Securities and coupons for principal (and premium, if any), interest
and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Security of any
-------------------
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium, if any, and Interest and Additional Amounts. Notwithstanding any other
- ----------------------------------------------------
provision in this Indenture, the Holder of any Security or coupon shall have the
right which is absolute and unconditional to receive payment of the principal of
(and premium, if any) and (subject to Sections 305 and 307) interest on, and any
Additional Amounts in respect of, such Security or payment of such coupon on the
respective due dates expressed in such Security or coupon (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
----------------------------------
any Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or coupons is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of
----------------------------
the Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
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SECTION 512. Control by Holders of Securities. The Holders of not
--------------------------------
less than a majority in principal amount of the Outstanding Securities of any
series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Securities of such series,
provided that
- -------------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security of
such series or any related coupons, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, 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 usury, 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.
SECTION 515. 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 or omitted by it as Trustee, the filing
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by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, 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 any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence
------------------
of any default hereunder with respect to the Securities of any series, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
-----------------
case of a default in the payment of the principal of (or premium, if any) or
interest on or any Additional Amounts with respect to any Security of such
series, or in the payment of any sinking or purchase fund installment with
respect to the Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interests of
the Holders of the Securities and coupons of such series; and provided further
----------------
that in the case of any default or breach of the character specified in Section
501(4) with respect to the Securities and coupons of such series, no such notice
to Holders shall be given until at least 60 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 the Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of
-------------------------
TIA Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 303
which shall be sufficiently evidenced as provided therein) and any
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resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon 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;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
--------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
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Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
-------------------
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. 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 in writing with the Company.
SECTION 606. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its own 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.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(5) or Section 501(6), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
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 (or premium, if any) or interest
on particular Securities or any coupons.
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The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests. (a) There shall at all times be a Trustee hereunder which shall be
- ---------
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, State, Territorial or District of Columbia 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.
(b) The following indentures shall be deemed to be specifically
described herein for the purposes of clause (i) of the first proviso contained
in TIA Section 310(b): [none].
SECTION 608. 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 609.
(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 an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 607(a) and
shall fail to resign after written request therefor by the Company or by
any Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
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). 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, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to 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 in the
manner provided for notices to the Holders of Securities in Section 106. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. 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 shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its lien and claim, if any, provided
for in Section 606.
(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
55
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successor Trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto, pursuant to Article Nine
hereof, wherein each successor Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Securities,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in 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 610. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- --------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided 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 or coupons 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 or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own
56
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name or that of its predecessor Trustee, with the full force and effect which
this Indenture provides for the certificate of authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when
-----------------------------------
any of the Securities remain Outstanding, 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 exchange, registration of transfer or
partial redemption or repayment thereof, 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. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company. 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, except as may otherwise be provided pursuant to Section 301, shall
at all times be a bank or trust company or corporation organized and doing
business and in good standing under the laws of the United States of America or
of any State or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$5,000,000 and subject to supervision or examination by Federal or State
authorities. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or the requirements of the aforesaid 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. In case 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 further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
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 give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
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Section 106. 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 herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
MELLON BANK, N.A.,
as Trustee
By [Name of Authenticating Agent]
--------------------------------------
as Authenticating Agent
By
--------------------------------------
Authorized Representative
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every
--------------------------------------------
Holder of Securities or coupons, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
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 TIA Section 312(b).
SECTION 702. Reports by Trustee. Within 60 days after May 15 of each
------------------
year commencing with the first May 15 after the first issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities if and as required in TIA Section 313(c) a brief report dated as of
such May 15 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
------------------
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of such Sections, then
it will file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
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SECTION 704. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders. The Company will furnish or cause to be furnished to the Trustee:
- -------
(a) semi-annually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities, semi-
annually, upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
- -----------------
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
-------------------------------------------------------
and Conveyances Permitted Subject to Certain Conditions. The Company may
- -------------------------------------------------------
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (i) either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium, if any) and any interest (including all Additional Amounts, if any,
payable pursuant to Section 1007) on all the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company by
supplemental indenture, complying with Article Nine hereof, satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation, and (ii) the
Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 802. Rights and Duties of Successor Corporation. In case of
------------------------------------------
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and
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delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. The
--------------------------------------------
Trustee shall receive and shall be entitled to rely upon an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default
are to be for the benefit of less than all series of Securities, stating
that such Events of Default are expressly being included solely for the
benefit of such series); provided, however, that in respect of any such
-----------------
additional Events of Default such supplemental indenture may provide for a
particular
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period of grace after default (which period may be shorter or longer than
that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default or may limit the right of the Holders of a
majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive such
default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
--------
affect the interests of the Holders of Securities of any series or any
related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
--------
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to provide security for the Securities; or
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
(9) 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 which shall not be inconsistent with
the provisions of this Indenture, provided such provisions shall not
--------
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(10) 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 Sections 401, 1402 or
1403; provided that any such action shall not adversely affect the
--------
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders. With
-----------------------------------------------
the consent of the Holders of not less than a majority in principal amount of
all Outstanding Securities affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the
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Trustee, the Company, when authorized by or pursuant to 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 and any related coupons under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any Security;
or reduce the principal amount thereof or the rate or amount of interest
thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change any obligation of
the Company to pay Additional Amounts pursuant to Section 1007 (except as
contemplated by Section 801(1) and permitted by Section 901(1)), or reduce
the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, or adversely affect any right of
repayment at the option of the Holder of any Security, or change any Place
of Payment where, or the currency or currencies, currency unit or units or
composite currency or currencies in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity thereof
(or in the case of redemption or repayment at the option of the Holder, on
or after the Redemption Date or the Repayment Date, as the case may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the requirements of
Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture 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, but shall require
the consent,
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in accordance with the provisions of this Section 902, of the Holders of at
least a majority of the Outstanding Securities of such one or more particular
series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution
---------------------------------
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest and
-------------------------------------------------------
Additional Amounts. The Company covenants and agrees for the benefit of the
- ------------------
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1007 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are
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<PAGE>
evidenced thereby as they severally mature. Unless otherwise specified with
respect to Securities of any series pursuant to Section 301, at the option of
the Company, all payments of principal may be paid by check to the registered
Holder of the Registered Security or other person entitled thereto against
surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a
-------------------------------
series are issuable only as Registered Securities, the Company shall 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 or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (A) in Pittsburgh, Pennsylvania, an office or agency where any
Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise); (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Securities of that series pursuant to Section 1007);
provided, however, that if the Securities of that series are listed on the
- ------------------
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain a
Paying Agent for the Securities of that series in Luxembourg or any other
required city located outside the United States, as the case may be, so long as
the Securities of that series are listed on such exchange; and (C) subject to
any laws or regulations applicable thereto, in a Place of Payment for that
series located outside the United States an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, except that
Bearer Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 1007) at the offices
specified in the Security, in London, England, and the Company hereby appoints
the same as its agent to receive such respective presentations, surrenders,
notices and demands, and the Company hereby appoints the Trustee its agent to
receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States or by check
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mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
-----------------
the Securities of a series are payable in Dollars, payment of principal of and
any premium and interest on any Bearer Security (including any Additional
Amounts payable on Securities of such series pursuant to Section 1007) shall be
made at the office of the Company's Paying Agent in Pittsburgh, Pennsylvania, if
(but only if) payment in Dollars of the full amount of such principal, premium,
interest or Additional Amounts, as the case may be, at all offices or agencies
outside the United States maintained for the purpose by the Company in
accordance with this Indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may 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 of 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 accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in Pittsburgh, Pennsylvania,
and initially appoints the Trustee at its Corporate Trust Office as Paying Agent
in such city and as its agent to receive all such presentations, surrenders,
notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one Exchange Rate Agent.
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 any Securities and any related coupons, it will, on or before each due
date of the principal of (and premium, if any), or interest on or Additional
Amounts in respect of, any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum in the currency
or currencies, currency unit or units or composite currency or currencies in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except, if
applicable, as provided in Sections 312(b), 312(d) and 312(e) ) sufficient to
pay the principal (and premium, if any) or interest or Additional Amounts 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 and any related coupons, it will, on or before each due
date of the principal of (and premium, if any), or interest on or Additional
Amounts in respect of, any Securities of that series, deposit with a Paying
Agent a sum (in the currency or currencies, currency unit or units or composite
currency or currencies described in the preceding paragraph) sufficient to pay
the
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principal (and premium, if any) or interest or Additional Amounts, so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest or Additional Amounts 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 other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, 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, or any AdditionaL Amounts in respect of, any Security of any series
and remaining unclaimed for two years after such principal (and premium, if
any), or interest or Additional Amounts has become due and payable shall be paid
to the Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, 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 notice to be mailed to the
Holders or published once in an Authorized Newspaper to the effect that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such mailing or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
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SECTION 1004. LIMITATION ON LIENS. The Company shall not, and shall
-------------------
not permit any Restricted Subsidiary to, directly or indirectly, create, or
suffer to be created or to exist, any Lien (other than Permitted Liens) upon any
of its Property or assets, whether now owned or hereafter acquired, or any
interest therein or any income or profits therefrom, unless it has made or will
make effective provision whereby the Securities will be secured by such Lien
equally and ratably with (or prior to) all other indebtedness of the Company or
any Restricted Subsidiary secured by such Lien for so long as any such other
indebtedness of the Company or any Restricted Subsidiary shall be so secured.
Notwithstanding the foregoing, the Company may, and may permit any Restricted
Subsidiary to, issue, assume, guarantee, or permit to exist indebtedness secured
by Liens on Property that are not Permitted Liens without equally and ratably
securing the Securities, provided that the sum of all such indebtedness then
being issued, assumed or guaranteed together with such indebtedness theretofore
issued, assumed or guaranteed that remains outstanding does not exceed 15% of
the Consolidated Net Tangible Assets immediately prior to the time such
indebtedness was issued, assumed or guaranteed.
SECTION 1005. Intentionally Omitted.
---------------------
SECTION 1006. Statement as to Compliance. The Company will deliver
--------------------------
to the Trustee, within 120 days after the end of each fiscal year (which as of
the date hereof is December 31), a brief certificate from the principal
executive officer, principal financial officer or principal accounting officer
as to his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture and, in the event of any noncompliance,
specifying such noncompliance and the nature and status thereof. For purposes
of this Section 1006, such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
SECTION 1007. Additional Amounts. If any Securities of a series
------------------
provide for the payment of Additional Amounts, the Company will pay to the
Holder of any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section 301. Whenever
in this Indenture there is mentioned, in any context except in the case of
Section 502(1), the payment of the principal of or any premium or interest on,
or in respect of, any Security of any series or payment of any related coupon or
the net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established pursuant to Section 301
to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms 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.
Except as otherwise specified as contemplated by Section 301, 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'
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Certificate, the Company will furnish the Trustee and the Company's principal
Paying Agent or Paying Agents, if other than the Trustee, with an Officers'
Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
or any related coupons who are not United States persons without withholding for
or on account of any tax, assessment or other governmental charge described in
the Securities of the 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 of that series or
related coupons and the Company will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. In the event that
the Trustee or any Paying Agent, as the case may be, shall not so receive the
above-mentioned certificate, then the Trustee or such Paying Agent shall be
entitled (i) to assume that no such withholding or deduction is required with
respect to any payment of principal or interest with respect to any Securities
of a series or related coupons until it shall have received a certificate
advising otherwise and (ii) to make all payments of principal and interest with
respect to the Securities of a series or related coupons without withholding or
deductions until otherwise advised. 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 or in reliance on any Officers' Certificate furnished pursuant to this
Section or in reliance on the Company's not furnishing such an Officers'
Certificate.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series
------------------------
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of 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 of such Redemption
Date and of the principal amount of Securities of such series to be redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If
-------------------------------------------------
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the
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Redemption Date by the Trustee, from the Outstanding Securities of such series
issued on such date with the same terms not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security 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 106, not less than 30 days nor more than
60 days prior to the Redemption Date, unless a shorter period is specified by
the terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if
any, payable in respect of the Securities to be redeemed,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if
any, will become due and
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payable upon each such Security, or the portion thereof, to be redeemed
and, if applicable, that interest thereon shall cease to accrue on and
after said date,
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and accrued interest, if any, or for conversion,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by
all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company,
the Trustee for such series and any Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 305 or otherwise,
the last date, as determined by the Company, on which such exchanges may be
made,
(10) the CUSIP number of such Securities, if any, and
(11) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or rate,
and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by
the Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price. On or prior to any
---------------------------
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not
do in the case of a sinking fund payment under Article Twelve, segregate and
hold in trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except, if
applicable, as provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay
on the Redemption Date the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
or portions thereof 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 in the currency or currencies,
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currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) (together with accrued interest,
if any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall, if the same were interest-bearing, cease to
bear interest and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with said
notice, together with all coupons, if any, appertaining thereto maturing after
the Redemption Date, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
-----------------
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons for
such interest; and provided further that installments of interest on Registered
----------------
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
---------
however, that interest represented by coupons shall be payable only at an office
- -------
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security
---------------------------
which is to be redeemed only in part (pursuant to the provisions of this Article
or of Article Twelve) 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, 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.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this
------------------------
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
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 such Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
-------------------------------------------------------
The Company may, in satisfaction of all or any part of any mandatory sinking
fund payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such 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, as provided for
by the terms of such Securities; provided that such Securities so delivered or
applied as a credit have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less
-----------------------------------------
than 45 days prior to each sinking fund payment date for Securities of any
series, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series and except, if applicable, as
provided in Sections 312(b), 312(d) and 312(e)) and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202, and the optional amount, if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and will also deliver to the
Trustee any Securities to be so delivered and credited. If such Officers'
Certificate shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Company shall thereupon be obligated
to pay the amount therein specified. 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
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having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of
------------------------
any series before their Stated Maturity at the option of Holders thereof shall
be made in accordance with the terms of such Securities and (except as otherwise
specified by the terms of such series established pursuant to Section 301) in
accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any series
-----------------------
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Company covenants that on or before the Repayment Date it
will deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series and except, if applicable, as provided in Sections
312(b), 312(d) and 312(e)) sufficient to pay the principal (or, if so provided
by the terms of the Securities of any series, a percentage of the principal) of,
and (except if the Repayment Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof, as the case may be, to be
repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject
------------------
to repayment at the option of the Holders thereof will contain an "Option to
Elect Repayment" form on the reverse of such Securities. In order for any
Security to be repaid at the option of the Holder, the Trustee must receive at
the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a telegram, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. ("NASD"), or a commercial bank or trust company in the United States
setting forth the name of the Holder of the Security, the principal amount of
the Security, the principal amount of the Security to be repaid, the certificate
number or a description of the tenor and terms of the Security, a statement that
the option to elect repayment is being exercised thereby and a guarantee that
the Security to be repaid, together with the duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the Trustee not later than the fifth Business Day after the date of such
telegram, facsimile transmission or letter; provided, however,
-----------------
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that such telegram, facsimile transmission or letter shall only be effective if
such Security and form duly completed are received by the Trustee by such fifth
Business Day. If less than the entire principal amount of such Security is to be
repaid in accordance with the terms of such Security, the principal amount of
such Security to be repaid, in increments of the minimum denomination for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the
unpaid principal amount of such Security would be less than the minimum
authorized denomination of Securities of the series of which such Security to be
repaid is a part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder thereof, exercise
of the repayment option by the Holder shall be irrevocable unless waived by the
Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If Securities of any series providing for repayment at the option of
- -------
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
- -----------------
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable (but without interest thereon,
unless the Company shall default in the payment thereof) to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
-----------------
by coupons shall be payable only at an office or agency located outside
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the United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repayment Date) shall, until
paid, bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any
-------------------------
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance. Unless otherwise provided, pursuant to
- ---------------------------------
Section 301, in respect of the Securities of or within a series, the Company
may, at its option, by Board Resolution at any time, elect to have either or
both of (a) the defeasance provisions of Section 1402 or (b) the covenant
defeasance provisions of Section 1403 apply to the Outstanding Securities of or
within such series and any coupons appertaining thereto upon compliance with the
applicable conditions set forth in this Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's exercise
------------------------
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1405 and the other Sections of this Indenture
referred to in clauses (A) and (B) of this Section, and to have satisfied all
its other obligations under such Securities and any coupons appertaining thereto
and this Indenture insofar as such Securities and any coupons appertaining
thereto are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (A) the
rights of Holders of such Outstanding Securities and any coupons appertaining
thereto to receive, solely from the trust fund described in Section 1404 and as
more fully set forth in such Section, payments in respect of the principal of
(and premium, if any) and
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interest, if any, on such Securities and any coupons appertaining thereto when
such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 305, 306, 1002 and 1003 and with respect to the
payment of Additional Amounts, if any, on such Securities as contemplated by
Section 1007, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article
Fourteen, the Company may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1403 with respect to such
Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of
-------------------
the above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under any
covenant with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
1404 are satisfied (hereinafter, "covenant defeasance"), and such Securities and
any coupons appertaining thereto shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with any
such covenant, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. For this purpose, such covenant defeasance means that, with
respect to such Outstanding Securities and any coupons appertaining thereto, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any covenant or by
reason of reference in any covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a default or an
Event of Default under Section 501(4) or 501(8) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Securities and any coupons appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Article Fourteen applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities and any
coupons appertaining thereto, (1) an amount (in such currency, currencies
or currency unit in which such Securities and any coupons appertaining
thereto are then specified as payable at Stated Maturity), or (2)
Government Obligations applicable to such Securities and coupons
appertaining thereto (determined on the basis of the currency, currencies
or currency unit in which such Securities and coupons appertaining thereto
are then specified as payable at Stated Maturity) which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment of principal of (and premium, if any) and interest,
if any, on such Securities and any coupons appertaining thereto, money in
an amount, or (3) a combination thereof in an amount, in any case,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written
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certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium, if any) and interest, if
any, on such Outstanding Securities and any coupons appertaining thereto on
the Stated Maturity of such principal or installment of principal or
interest and (ii) any mandatory sinking fund payments or analogous payments
applicable to such Outstanding Securities and any coupons appertaining
thereto on the day on which such payments are due and payable in accordance
with the terms of this Indenture and of such Securities and any coupons
appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities and
any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 501(6) and 501(7) are
concerned, at any time during 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).
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of execution of this
Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of such Outstanding Securities and any
coupons appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred.
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto
will not recognize income, gain or loss for Federal income tax purposes as
a result of such covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance
under Section 1403 (as the case may be) have been complied with and an
Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Company's
option under Section 1402 or Section 1403 (as the case may be),
registration is not required under the Investment Company Act of 1940, as
amended, by the Company, with respect
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to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- ----------------------------------------
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 312(b) or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs as contemplated in Section 312(d) or
312(e) or by the terms of any Security in respect of which the deposit pursuant
to Section 1404(a) has been made, the indebtedness represented by such Security
and any coupons appertaining thereto shall be deemed to have been, and will be,
fully discharged and satisfied through the payment of the principal of (and
premium, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable Market Exchange Rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
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Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in Section 1404 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect a defeasance or
covenant defeasance, as applicable, in accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting
-----------------------------------------
of Holders of Securities of any series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. 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 1501, to be held at such time and at such place in
Pittsburgh, Pennsylvania, or in New York, New York, as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 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 10% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in
Pittsburgh, Pennsylvania, or in New York, 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 1503. 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
(1) a Holder of one or more Outstanding Securities of such series, or (2) 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
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and their counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
--------------
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
- -----------------
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Securities of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
after the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(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 any adjourned meeting shall
state expressly the percentage, as provided above, of the principal amount of
the Outstanding Securities of such series which shall constitute a quorum.
Except as limited by 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 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, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities
of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
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(i) there shall be no minimum quorum requirement for such meeting; and
(ii) the principal amount of the Outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings. (a) Notwithstanding any provisions of this Indenture, the Trustee
- -----------
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
---------
however, that no vote shall be cast or counted at any meeting in respect of any
- -------
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. 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
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series or of their representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities of such series held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities of any Series shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the fact, setting forth a copy of the notice of the meeting
and showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
* * * * *
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This Indenture 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 Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed,
all as of the day and year first above written.
WORLDCOM, INC
By:
-------------------------------------
Title:
MELLON BANK, N.A.
By:
-------------------------------------
Title: Vice President
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EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section 2.165-
12(c)(1)(v) are herein referred to as "financial institutions") purchasing for
their own account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise WorldCom, Inc. or its agent that such financial institution will comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) are owned by United States or foreign financial institution(s) for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in addition, if the
owner is a United States or foreign financial institution described in clause
(iii) above (whether or not also described in clause (i) or (ii)), this is to
further certify that such financial institution has not acquired the Securities
for purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the above-
captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
A-1
<PAGE>
This certificate excepts and does not relate to [U.S. $]_____________
of such interest in the above-captioned Securities in respect of which we are
not able to certify and as to which we understand an exchange for an interest in
a Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Date: _______________, 19___
[To be dated no earlier than the 15th day
prior to (i) the Exchange Date or (ii)
the relevant Interest Payment Date
occurring prior to the Exchange Date,
as applicable]
[Name of Person Making Certification]
----------------------------------------
(Authorized Signatory)
Name:
Title:
A-2
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S. $]__________________
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(d)(1)(v) are herein
referred to as "financial institutions" purchasing for their own account or for
resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such financial institution has agreed, on
its own behalf or through its agent, that we may advise WorldCom, Inc. or its
agent that such financial institution will comply with the requirements of
Section 165 (j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by United States or
foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(7)), and, to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with
A-3
<PAGE>
respect to any portion of the part submitted herewith for exchange (or, if
relevant, collection of any interest) are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Date: ________________, 19___
[To be dated no earlier than the Exchange Date or the
relevant Interest Payment Date occurring Prior to the
Exchange Date, as applicable]
[_______________________] as
Operator of the Euroclear System
[Cedel S.A.]
By
--------------------------------------
A-4
<PAGE>
Exhibit 11.1
WORLDCOM, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
Primary:
Weighted average shares outstanding 888,245 387,566
Common stock equivalents 28,031 7,472
Common stock issuable upon conversion of:
Series A preferred stock 32,703 -
------------ ------------
948,979 395,038
============ ============
Fully diluted:
Weighted average shares outstanding 888,245 387,566
Common stock equivalents 28,031 8,586
Common stock issuable upon conversion of:
Series A preferred stock 32,703 -
Series B preferred stock 1,237 -
5% convertible notes - 10,270
Series 2 preferred stock - 5,266
------------ ------------
950,216 411,688
============ ============
Income applicable to common shareholders $ 43,054 $ 85,802
Add back:
Series A preferred dividend 6,364 -
Series B preferred dividend 246 -
Interest on 5% convertible notes, net of taxes - 1,491
Series 2 preferred dividend requirement - 505
------------ -----------
Net income applicable to common shareholders $ 49,664 $ 87,798
============ ===========
Earnings per share:
Primary $ 0.05 $ 0.22
Fully diluted $ 0.05 $ 0.21
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AND RELATED NOTES AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 68,348
<SECURITIES> 57,079
<RECEIVABLES> 1,218,311
<ALLOWANCES> (108,831)
<INVENTORY> 0
<CURRENT-ASSETS> 1,630,592
<PP&E> 4,741,836
<DEPRECIATION> (481,040)
<TOTAL-ASSETS> 19,595,269
<CURRENT-LIABILITIES> 1,781,877
<BONDS> 4,617,431
0
128
<COMMON> 8,913
<OTHER-SE> 13,021,153
<TOTAL-LIABILITY-AND-EQUITY> 19,595,269
<SALES> 1,677,239
<TOTAL-REVENUES> 1,677,239
<CGS> 911,469
<TOTAL-COSTS> 1,506,719
<OTHER-EXPENSES> (8,401)
<LOSS-PROVISION> 24,965
<INTEREST-EXPENSE> 75,455
<INCOME-PRETAX> 103,466
<INCOME-TAX> 53,802
<INCOME-CONTINUING> 49,664
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,054
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
