AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 1995
REGISTRATION NO. 33-
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-51837
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
AND POST EFFECTIVE AMENDMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
LEHMAN BROTHERS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-2518466
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
3 WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285
(212) 526-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
THOMAS A. RUSSO, ESQ.
CHIEF LEGAL OFFICER
LEHMAN BROTHERS INC.
3 WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285
(212) 526-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
JENNIFER MARRE, ESQ. RAYMOND W. WAGNER, ESQ.
LEHMAN BROTHERS INC. SIMPSON THACHER & BARTLETT
3 WORLD FINANCIAL CENTER 425 LEXINGTON AVENUE
24TH FLOOR NEW YORK, NEW YORK 10017
NEW YORK, NEW YORK 10285
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement, as determined in
light of market conditions.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. X
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE><CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT AGGREGATE AGGREGATE AMOUNT OF
OF SECURITIES TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED (A) (B) (C) UNIT PRICE (C) (D) FEE (C) (E)
<S> <C> <C> <C> <C>
Debt Securities......... U.S. $750,000,000 100% U.S. $750,000,000 U.S. $258,621
</TABLE>
<TABLE>
<C> <S>
(a) Includes the amount, if any, that may be acquired and sold by an affiliate of the Registrant
in connection with certain market making activities of such affiliate.
(b) Or, if any Debt Securities are issued (i) with an initial offering price denominated in a
foreign currency or a foreign currency unit, such amount shall result in aggregate gross
proceeds equivalent to U.S. $750,000,000 to the Registrant at the time of initial offering or
(ii) at an original issue discount, such greater amount as shall result in aggregate gross
proceeds of U.S. $750,000,000 to the Registrant.
(c) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus herein also relates to
$275,000,000 of debt securities of the Registrant registered under Registration Statement No.
33-51837. A filing fee of $94,875 in respect of such securities was paid on January 7, 1994
upon the filing of such Registration Statement.
(d) Estimated solely for the purpose of calculating the registration fee.
(e) Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
</TABLE>
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS HEREIN
IS A COMBINED PROSPECTUS AND ALSO RELATES TO REGISTRATION STATEMENT NO. 33-51837
PREVIOUSLY FILED WITH THE COMMISSION ON FORM S-3 AND DECLARED EFFECTIVE MAY 18,
1994. THIS REGISTRATION STATEMENT ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO.
1 TO REGISTRATION STATEMENT NO. 33-51837.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION DATED OCTOBER 23, 1995
LEHMAN BROTHERS INC.
DEBT SECURITIES
------------------------
Lehman Brothers Inc. (the "Company") may offer from time to time unsecured
senior debt securities ("Senior Debt Securities") and unsecured senior
subordinated debt securities ("Senior Subordinated Debt Securities") and
(together, "Debt Securities") consisting of debentures, notes and/or other
evidences of indebtedness in one or more series for proceeds of up to
U.S.$1,025,000,000, or the equivalent thereof if any of the Senior Debt
Securities are denominated in a foreign currency or foreign currency unit.
The Senior Subordinated Debt Securities will (as hereinafter defined) rank
equally with all other senior subordinated indebtedness of the Company and are
subordinated to all Senior Indebtedness as defined in the Subordinated
Indenture. There is no limitation on the amount of Senior Indebtedness which may
be incurred by the Company.
The Debt Securities may be offered as separate series in amounts, at prices
and on terms to be determined at the time of sale. The Senior Debt Securities
may be sold for United States dollars, foreign currencies or foreign currency
units, and the principal of and interest, if any, on the Debt Securities may be
payable in United States dollars, foreign currencies or foreign currency units.
The Senior Subordinated Debt Securities may be sold only for, and may be payable
only in, United States dollars. The specific designation, priority, aggregate
principal amount, the currency or currency unit for which the Debt Securities
may be purchased, the currency or currency unit in which the principal and
interest, if any, is payable, the rate (or method of calculation) and time of
payment of interest, if any, authorized denominations, maturity, offering price,
any redemption terms, any listing on a securities exchange and the initial
public offering price and any other terms in connection with the offering and
sale of Debt Securities in respect of which this Prospectus is being delivered
are set forth in an applicable Prospectus Supplement.
The Senior Debt Securities may be issued in registered form or bearer form
with coupons attached. In addition, all or a portion of the Senior Debt
Securities of a series may be issued in global form. Senior Debt Securities in
bearer form will be offered only outside the United States to non-United States
persons and to offices located outside the United States of certain United
States financial institutions. See "Limitations on Issuance of Bearer
Securities." The Senior Subordinated Debt Securities may be issued only in
registered form.
For a discussion of certain United States federal income tax consequences to
holders of Debt Securities, see "United States Taxation."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Debt Securities may be sold through, or through underwriting syndicates
managed by, Lehman Brothers Inc. alone or with one or more other underwriters.
The applicable Prospectus Supplement sets forth the names of the specific
managing underwriter or underwriters and the members of the underwriting
syndicate, if any, involved in the sale of the Debt Securities in respect of
which this Prospectus is being delivered.
------------------------
This Prospectus, together with the applicable Prospectus Supplement, may
also be used by Lehman Brothers International (Europe) in connection with offers
and sales of Debt Securities related to market making transactions at negotiated
prices related to prevailing market prices at the time of sale or otherwise.
Lehman Brothers International (Europe) may act as principal or agent in such
transactions.
------------------------
, 1995
<PAGE>
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. INFORMATION
CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT
BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PRELIMINARY PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "SEC"). Such reports and information may be inspected and copied
at the public reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the SEC:
New York Regional Office, 7 World Trade Center, New York, New York 10048; and
Chicago Regional Office, Suite 1400, Northwestern Atrium Center, 500 W. Madison
Street, Chicago, Illinois 60661-2511; and copies of such material can be
obtained from the Public Reference Section of the SEC, Washington, D.C. 20549,
at prescribed rates. In addition, reports and other information concerning the
Company may be inspected at the offices of the New York Stock Exchange, Inc.
(the "NYSE") at 20 Broad Street, New York, New York 10005.
The Company has filed with the SEC registration statements on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statements") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statements, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. For further information,
reference is hereby made to the Registration Statements.
------------------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed by the Company with the SEC
pursuant to the Exchange Act are hereby incorporated by reference in this
Prospectus:
(1) The Company's Transition Report on Form 10-K for the eleven months
ended November 30, 1994.
(2) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended February 28, May 31, 1995 and August 31, 1995.
(3) The Company's Current Report on Form 8-K dated January 13, 1995.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities offered by an applicable
Prospectus Supplement shall be deemed to be incorporated by reference into this
Prospectus from the date of filing of such document. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of the Registration
Statements and this Prospectus to the extent that a statement contained herein,
in an applicable Prospectus Supplement or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of the
Registration Statements or this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner of any Debt Security, to whom a copy of this Prospectus is
delivered, upon the written or oral request of any such person, a copy of any or
all of the documents which are incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests should be directed to Mary Jo Capko,
the Controller's Office, Lehman Brothers Inc., 3 World Financial Center, 27th
Floor, New York, New York 10285 (telephone (212) 526-0660).
2
<PAGE>
THE COMPANY
The Company is one of the leading global investment banks serving
institutional, corporate, government and high net worth individual clients and
customers. The Company's worldwide headquarters in New York are complemented by
offices in additional locations in the United States, Europe, the Middle East,
Latin America and the Asia Pacific region. The Company also operates a
commodities trading and sales operation in London. Affiliates of the Company
provide investment banking and capital markets services in Europe and Asia.
The Company's business includes capital raising for clients through
securities underwriting and direct placements; corporate finance and strategic
advisory services; merchant banking; securities sales and trading; asset
management; research; and the trading of foreign exchange, derivative products
and certain commodities. The Company acts as a market marker in all major fixed
income and equity products in both the domestic and international markets. The
Company is a member of all principal securities and commodities exchanges in the
United States, as well as the National Association of Securities Dealers, Inc.
("NASD"). Affiliates of the Company hold memberships or associate memberships on
several principal international securities and commodities exchanges, including
the London, Tokyo, Hong Kong, Frankfurt and Milan stock exchanges.
The Company was incorporated in Delaware in 1965. The Company is a
wholly-owned subsidiary of Lehman Brothers Holdings Inc. ("Holdings"). The
Company's executive offices are located at 3 World Financial Center, New York,
New York 10285 (telephone (212) 526-7000). Unless the context otherwise
indicates, the term "Company" as used in this Prospectus includes Lehman
Brothers Inc. and its subsidiaries.
USE OF PROCEEDS
Except as otherwise may be set forth in an applicable Prospectus Supplement
accompanying this Prospectus, the Company intends to apply the net proceeds from
the sale of the Debt Securities to its general funds to be used for general
corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for each of the four years in the period ended December 31, 1993, the
eleven months ended November 30, 1994 and the nine months ended August 31, 1995:
ELEVEN MONTHS ENDED NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, NOVEMBER 30, AUGUST 31,
- ------------------------------- ------------------- -----------------
1990 1991 1992 1993 1994 1995
- ---- ---- ---- ---- ------------------- -----------------
* 1.05 1.05 * * 1.01
- ------------
* Earnings were inadequate to cover fixed charges and would have had to increase
approximately $569 million in 1990, $214 million in 1993 and $51 million in
fiscal 1994 in order to cover the deficiencies for the respective periods.
In computing the ratio of earnings to fixed charges, "earnings" consist of
earnings from continuing operations before income taxes and fixed charges.
"Fixed charges" consist principally of interest expense and one-third of office
rentals and one-fifth of equipment rentals, which are deemed to be
representative of the interest factor.
3
<PAGE>
DESCRIPTION OF SENIOR DEBT SECURITIES
The following description sets forth general terms and provisions of the
Senior Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Senior Debt Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may or may
not apply to the Senior Debt Securities so offered will be described in the
Prospectus Supplement relating to such Senior Debt Securities.
The Senior Debt Securities are to be issued under an indenture, dated as of
October 23, 1995, between the Company and The Bank of New York, Trustee, (the
"Senior Indenture"). A copy of the Senior Indenture is filed as an exhibit
to the Registration Statements of which this Prospectus is a part. This
Prospectus contains descriptions of all material provisions of the Senior
Indenture. The summaries of such provisions of the Senior Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Senior Indenture, including the
definitions therein of certain terms. Wherever particular provisions or defined
terms of the Senior Indenture are referred to, such provisions or defined terms
are incorporated herein by reference. All articles and sections of the Senior
Indenture, and all capitalized terms set forth below, have the meanings
specified in the Senior Indenture.
GENERAL
The Indenture does not limit the amount of Senior Debt Securities which may
be issued thereunder and provides that Senior Debt Securities may be issued from
time to time in one or more series.
Reference is made to an applicable Prospectus Supplement for the following
terms and other information with respect to the Senior Debt Securities being
offered thereby: (1) the title of such Senior Debt Securities; (2) any limit on
the aggregate principal amount of such Senior Debt Securities; (3) whether the
Senior Debt Securities are to be issuable as Registered Securities or Bearer
Securities or both, and if Bearer Securities are issued, whether Bearer
Securities may be exchanged for Registered Securities and the circumstances and
places for such exchange, if permitted; (4) whether the Senior Debt Securities
are to be issued in whole or in part in the form of one or more temporary or
permanent global Senior Debt Securities ("Global Securities") in registered or
bearer form and, if so, the identity of the depositary, if any, for such Global
Security or Securities; (5) the date or dates (or manner of determining the
same) on which such Senior Debt Securities will mature; (6) the rate or rates
(or manner of determining the same) at which such Senior Debt Securities will
bear interest, if any, and the date or dates from which such interest will
accrue; (7) the dates (or manner of determining the same) on which such interest
will be payable and the Regular Record Dates for such Interest Payment Dates for
Senior Debt Securities which are Registered Securities, and the extent to which,
or the manner in which, any interest payable on a temporary or permanent global
Senior Debt Security on an Interest Payment Date will be paid if other than in
the manner described under "Global Securities" below; (8) any mandatory or
optional sinking fund or analogous provisions; (9) each office or agency where,
subject to the terms of the applicable Senior Indenture as described below under
"Payment and Paying Agents", the principal of and premium, if any, and interest,
if any, on the Senior Debt Securities will be payable and each office or agency
where, subject to the terms of the Senior Indenture as described below under
"Denominations, Registration and Transfer," the Senior Debt Securities may be
presented for registration of transfer or exchange; (10) the date, if any, after
which, and the price or prices in the currency or currency unit in which, such
Senior Debt Securities are payable pursuant to any optional or mandatory
redemption provision; (11) any provisions for payment of additional amounts for
taxes and any provision for redemption, in the event the Company must comply
with reporting requirements in respect of a Senior Debt Security or must pay
such additional amounts in respect of any Senior Debt Security; (12) the terms
and conditions, if any, upon which the Senior Debt Securities of such series may
be repayable prior to maturity at the option of the holder thereof (which option
may be conditional) and the price or prices in the currency or currency unit in
which such Senior Debt Securities are payable; (13) the denominations in which
any Senior Debt Securities which are Registered Securities will be issuable if
other than denominations of $1,000 and any integral multiple thereof, and the
denomination or denominations in which any Senior Debt Securities which are
Bearer
4
<PAGE>
Securities will be issuable if other than the denomination of $5,000; (14) the
currency, currencies or currency units for which such Senior Debt Securities may
be purchased and the currency, currencies or currency units in which the
principal of and interest, if any, on such Senior Debt Securities may be
payable; (15) any index used to determine the amount of payments of principal of
and premium, if any, and interest, if any, on such Senior Debt Securities; (16)
the terms and conditions, if any, pursuant to which such Senior Debt Securities
may be converted or exchanged for other securities of the Company or any other
person; (17) the terms and conditions, if any, pursuant to which the principal
of and premium, if any, and interest, if any, on such Senior Debt Securities are
payable, at the election of the Company or the holder thereof, in securities or
other property; and (18) other terms of the Senior Debt Securities.
If any of the Senior Debt Securities are sold for foreign currencies or
foreign currency units or if the principal of or interest, if any, on any series
of Senior Debt Securities is payable in foreign currencies or foreign currency
units, the restrictions, elections, tax consequences, specific terms and other
information with respect to such issue of Senior Debt Securities and such
currencies or currency units will be set forth in an applicable Prospectus
Supplement relating thereto.
One or more series of Senior Debt Securities may be sold at a substantial
discount below their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable to any such series are
described under "United States Taxation" and may be further described in an
applicable Prospectus Supplement.
The Senior Debt Securities will be unsecured obligations of the Company
constituting part of the senior debt of the Company (the "Senior Debt") and will
rank equally with all other unsecured debt of the Company except subordinated
debt.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise provided with respect to a series of Senior Debt
Securities, the Senior Debt Securities will be issuable as Registered Securities
without coupons and in denominations of $1,000 or any integral multiple thereof.
Senior Debt Securities of a series may be issuable in whole or in part in the
form of one or more Global Securities, as described below under "Global
Securities." One or more Global Securities will be issued in a denomination or
aggregate denominations equal to the aggregate principal amount of Senior Debt
Securities of the series to be represented by such Global Security or
Securities. If so provided with respect to a series of Senior Debt Securities,
Senior Debt Securities of such series will be issuable solely as Bearer
Securities with coupons attached or as both Registered Securities and Bearer
Securities. (Section 201).
In connection with the sale during the "restricted period" as defined in
Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations
(generally, the first 40 days after the closing date and, with respect to unsold
allotments, until sold), no Bearer Security shall be mailed or otherwise
delivered to any location in the United States (as defined under "Limitations on
Issuance of Bearer Securities"). A Bearer Security in definitive form (including
interests in a permanent Global Security) may be delivered only if the Person
entitled to receive such Bearer Security furnishes written certification, in the
form required by the Indenture, to the effect that such Bearer Security is not
owned by or on behalf of a United States person (as defined under "Limitations
on Issuance of Bearer Securities"), or, if a beneficial interest in such Bearer
Security is owned by or on behalf of a United States person, that such United
States person (i) acquired and holds the Bearer Security through a foreign
branch of a United States financial institution, (ii) is a foreign branch of a
United States financial institution purchasing for its own account or resale
(and in either case, (i) or (ii), such financial institution agrees to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder)
or (iii) is a financial institution purchasing for resale during the restricted
period only to non-United States persons outside the United States. (Sections
303, 304). See "Global Securities--Bearer Debt Securities" and "Limitations on
Issuance of Bearer Securities."
5
<PAGE>
Registered Securities of any series (other than a Global Security) will be
exchangeable for other Registered Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations. In
addition, if Senior Debt Securities of any series are issuable as both
Registered Securities and as Bearer Securities, at the option of the Holder upon
request confirmed in writing, and subject to the terms of the Senior Indenture,
definitive Bearer Securities (with all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will be exchangeable
into definitive Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Unless
otherwise indicated in an applicable Prospectus Supplement, any definitive
Bearer Security surrendered in exchange for a definitive Registered Security
between a Regular Record Date or a Special Record Date and the relevant date for
payment of interest shall be surrendered without the coupon relating to such
date for payment of interest and interest will not be payable in respect of the
definitive Registered Security issued in exchange for such definitive Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the terms of the Senior Indenture. (Section 305). Except as
provided in an applicable Prospectus Supplement, Bearer Securities will not be
issued in exchange for Registered Securities.
Senior Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the office of any
transfer agent designated by the Company for such purpose with respect to any
series of Senior Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Senior Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. The Company has appointed the Trustee as Security
Registrar under the Senior Indenture. (Section 305). If a Prospectus Supplement
refers to any transfer agents (in addition to the Security Registrar) initially
designated by the Company with respect to any series of Senior Debt Securities,
the Company may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
except that, if Senior Debt Securities of a series are issuable only as
Registered Securities, the Company will be required to maintain a transfer agent
in each Place of Payment for such series and, if Senior Debt Securities of a
series are issuable as Bearer Securities, the Company will be required to
maintain (in addition to the Security Registrar) a transfer agent in a Place of
Payment for such series located outside the United States. The Company may at
any time designate additional transfer agents with respect to any series of
Senior Debt Securities. (Section 1002).
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Senior Debt Securities of any
series during a period beginning at the opening of business 15 days before any
selection of Senior Debt Securities of that series to be redeemed and ending at
the close of business on (A) if Senior Debt Securities of the series are
issuable only as Registered Securities, the day of mailing of the relevant
notice of redemption and (B) if Senior Debt Securities of the series are
issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if Senior Debt Securities of the series are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption; (ii) register the transfer of or exchange any
Registered Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Security being redeemed in part; or (iii)
exchange any Bearer Security called for redemption, except to exchange such
Bearer Security for a Registered Security of that series and like tenor which is
immediately surrendered for redemption. (Section 305).
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Bearer Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such Paying Agents outside the United States as the Company may designate from
time to time, at the option of the Holder, by check or by transfer to an account
6
<PAGE>
maintained by the payee with a bank located outside the United States. (Sections
307 and 1002). Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on Bearer Securities on any Interest Payment
Date will be made only against surrender of the coupon relating to such Interest
Payment Date. (Section 1001). No payment of interest on a Bearer Security will
be made unless on the earlier of the date of the first such payment by the
Company or the delivery by the Company of the Bearer Security in permanent form
(including interests in a permanent Global Security) (the "Certification Date"),
a written certificate in the form and to the effect described under
"Denominations, Registration and Transfer" is provided to the Company. No
payment with respect to any Bearer Security will be made at any office or agency
of the Company in the United States or by check mailed to any address in the
United States or by transfer to an account maintained with a bank located in the
United States. Notwithstanding the foregoing, payment of principal of (and
premium, if any) and interest on Bearer Securities denominated and payable in
U.S. dollars will be made at the office of the Company's Paying Agent in the
Borough of Manhattan, The City of New York if, and only if, payment of the full
amount thereof in U.S. dollars at all offices or agencies outside the United
States is illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 1002).
Payment of principal of (and premium, if any) and any interest on Registered
Securities (other than a Global Security) will be made in U.S. dollars at the
office of such Paying Agent or Paying Agents as the Company may designate from
time to time, except that at the option of the Company payment of any interest
may be made (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or (ii) by wire transfer to
an account maintained by the Person entitled thereto as specified in the
Security Register. (Sections 305, 307, 1002). Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any instalment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest payment. (Section 307).
The principal corporate trust office of the Trustee under the applicable
Senior Indenture in The City of New York will be designated as the Company's
sole Paying Agent for payments with respect to Senior Debt Securities which are
issuable solely as Registered Securities and as the Company's Paying Agent in
the Borough of Manhattan, The City of New York, for payments with respect to
Senior Debt Securities (subject to the limitations described above in the case
of Bearer Securities) which may be issuable as Bearer Securities. Any Paying
Agents outside the United States and any other Paying Agents in the United
States initially designated by the Company for the Senior Debt Securities will
be named in an applicable Prospectus Supplement. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agents or approve a change in the office through which any Paying Agent acts,
except that, if Senior Debt Securities of a series are issuable only as
Registered Securities, the Company will be required to maintain a Paying Agent
in each Place of Payment for such series, and if Senior Debt Securities of a
series may be issuable as Bearer Securities, the Company will be required to
maintain (i) a Paying Agent in the Borough of Manhattan, The City of New York
for payments with respect to any Registered Securities of the series (and for
payments with respect to Bearer Securities of the series in the circumstances
described above, but not otherwise), and (ii) a Paying Agent in a Place of
Payment located outside the United States where Senior Debt Securities of such
series and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Senior Debt Securities of such series are listed
on The Luxembourg Stock Exchange (the "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 in Luxembourg or any other
required city located outside the United States, as the case may be, for the
Senior Debt Securities of such series. (Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) or interest on any Senior Debt Security which
remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company and the
Holder of such Senior Debt Security or any coupon will thereafter look only to
the Company for payment thereof. (Section 1003).
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GLOBAL SECURITIES
The Senior Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with or on
behalf of a depository (a "Depository") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued in either registered or
bearer form and in either temporary or permanent form.
The specific terms of the depository arrangement with respect to any Senior
Debt Securities of a series will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will apply to all depository arrangements.
Senior Debt Securities which are to be represented by a Global Security in
registered form to be deposited with or on behalf of a Depository will be
registered in the name of such Depository or its nominee. Upon the issuance of a
Global Security in registered form, the Depository for such Global Security will
credit the respective principal amounts of the Senior Debt Securities
represented by such Global Security to the accounts of institutions that have
accounts with such depository or its nominee ("participants"). The accounts to
be credited shall be designated by the underwriters or agents of such Senior
Debt Securities or by the Company, if such Senior Debt Securities are offered
and sold directly by the Company. Ownership of beneficial interests in such
Global Securities will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in such Global Securities will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by the
Depository or its nominee for such Global Security. Ownership of beneficial
interests in Global Securities by persons that hold through participants will be
shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
So long as the Depository for a Global Security in registered form, or its
nominee, is the registered owner of such Global Security, such depository or
such nominee, as the case may be, will be considered the sole owner or holder of
the Senior Debt Securities represented by such Global Security for all purposes
under the Senior Indenture. Except as set forth below, owners of beneficial
interests in such Global Securities will not be entitled to have Senior Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Senior
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Senior Indenture.
Payment of principal of, premium, if any, and any interest on Senior Debt
Securities registered in the name of or held by a Depository or its nominee will
be made to the Depository or its nominee, as the case may be, as the registered
owner or the holder of the Global Security. None of the Company, the Trustee,
any Paying Agent or the Security Registrar for such Senior Debt Securities will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. (Section 308).
The Company expects that the Depository for a permanent Global Security in
registered form, upon receipt of any payment of principal, premium or interest
in respect of a permanent Global Security, will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of such Depository. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
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A Global Security in registered form may not be transferred except as a
whole by the Depository for such Global Security to a nominee of such depository
or by a nominee of such depository to such depository or another nominee of such
depository or by such depository or any such nominee to a successor of such
depository or a nominee of such successor. If a Depository for a permanent
Global Security in registered form is at any time unwilling or unable to
continue as depository and a successor depository is not appointed by the
Company within 90 days, the Company will issue Senior Debt Securities in
definitive form in exchange for all of the Global Securities representing such
Senior Debt Securities. In addition, the Company may at any time and in its sole
discretion determine not to have any Senior Debt Securities in registered form
represented by one or more Global Securities and, in such event, will issue
Senior Debt Securities in definitive form in exchange for all of the Global
Securities representing such Senior Debt Securities. (Section 305). Further, if
the Company so specifies with respect to the Senior Debt Securities of a series,
an owner of a beneficial interest in a Global Security representing Senior Debt
Securities of such series may, on terms acceptable to the Company and the
Depository for such Global Security, receive Senior Debt Securities of such
series in definitive form. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery in
definitive form of Senior Debt Securities of the series represented by such
Global Security equal in principal amount to such beneficial interest and to
have such Senior Debt Securities registered in its name (if the Senior Debt
Securities of such series are issuable as Registered Securities). Senior Debt
Securities of such series so issued in definitive form will be issued (a) as
Registered Securities in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof if the Senior Debt Securities
of such series are issuable as Registered Securities, (b) as Bearer Securities
in the denomination, unless otherwise specified by the Company, of $5,000 if the
Senior Debt Securities of such series are issuable as Bearer Securities or (c)
as either Registered or Bearer Securities if the Senior Debt Securities of such
series are issuable in either form. (Section 305). See, however, "Limitations on
Issuance of Bearer Securities" below for a description of certain restrictions
on the issuance of a Bearer Security in definitive form in exchange for an
interest in a Global Security.
BEARER DEBT SECURITIES
If so specified in an applicable Prospectus Supplement, pending the
availability of a permanent Global Security, all or any portion of the Senior
Debt Securities of a series which may be issuable as Bearer Securities will
initially be represented by one or more temporary Global Securities, without
interest coupons, to be deposited with a common depositary in London for Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel") for
credit to the designated accounts. The interests of the beneficial owner or
owners in a temporary Global Security in bearer form will be exchangeable for:
(i) in whole, definitive Bearer Securities, (ii) in whole, Senior Debt
Securities to be represented thereafter by one or more permanent Global
Securities, in bearer form without interest coupons, and/or (iii) in whole or in
part, definitive Registered Securities, on or after the Exchange Date; provided,
however, that if definitive Bearer Securities have previously been issued in
exchange for an interest in a permanent Global Security in bearer form
representing Senior Debt Securities of the same series, then interests in such
Senior Debt Securities (with certain exceptions) shall only be exchangeable, in
whole, for definitive Bearer Securities, definitive Registered Securities, or
any combination thereof, representing Senior Debt Securities having the same
interest rate and Stated Maturity, but only upon written certification in the
form and to the effect described under "Denominations, Registration and
Transfer" unless such certification has been provided on an earlier interest
payment date. The beneficial owner of a Senior Debt Security represented by a
permanent Global Security in bearer form may, on or after the applicable
Exchange Date and upon 30 days' notice to the applicable Trustee given through
Euroclear or Cedel, exchange its interest in whole for definitive Bearer
Securities or, if specified in an applicable Prospectus Supplement, in whole or
in part, definitive Registered Securities of any authorized denomination,
provided, however, that if definitive Bearer Securities are issued in partial
exchange for Senior Debt Securities represented by such permanent Global
Security such issuance (with certain exceptions)
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shall give rise to the exchange of such permanent Global Security in whole for,
at the option of the Holders, definitive Bearer Securities, definitive
Registered Securities, or any combination thereof. 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 in connection with such
exchange. (Sections 303 and 304).
Unless otherwise specified in an applicable Prospectus Supplement, interest
in respect of any portion of a temporary Global Security in bearer form payable
in respect of an Interest Payment Date occurring prior to the issuance of a
permanent Global Security in bearer form will be paid to each of Euroclear and
Cedel with respect to the portion of the temporary Global Security in bearer
form held for its account. Each of Euroclear and Cedel will undertake in such
circumstances to credit such interest received by it in respect of a temporary
Global Security in bearer form to the respective accounts for which it holds
such temporary Global Security in bearer form as of the relevant Interest
Payment Date, but only upon receipt in each case of written certification, in
the form and to the effect described under "Denomination, Registration and
Transfer."
LIMITATION ON LIENS
So long as any Senior Debt Securities remain outstanding, unless an
applicable Prospectus Supplement relating thereto provides otherwise, the
Company will not, and will not permit any Designated Subsidiary (as defined
below), directly or indirectly, to create, issue, assume, incur or guarantee any
indebtedness for money borrowed which is secured by a mortgage, pledge, lien,
security interest or other encumbrance of any nature on any of the present or
future common stock of a Designated Subsidiary unless the Senior Debt Securities
and, if the Company so elects, any other indebtedness of the Company ranking at
least pari passu with the Senior Debt Securities, shall be secured equally and
ratably with (or prior to) such other secured indebtedness for money borrowed so
long as it is outstanding. (Section 1005).
The term "Designated Subsidiary" means any present or future consolidated
subsidiary of the Company, the consolidated net worth of which constitutes at
least 5% of the consolidated net worth of the Company. As of September 30, 1995,
the Company's Designated Subsidiaries were Lehman Commercial Paper Inc.,
Structured Assets Securities Corporation, LB I Group Inc. and Lehman Brothers
Financial Products Inc.
EVENTS OF DEFAULT
Except as may otherwise be set forth in an applicable Prospectus Supplement
relating to a series of Debt Securities, the following are Events of Default
under the Senior Indenture with respect to Senior Debt Securities of such
series: (a) failure to pay principal of or premium, if any, on any Senior Debt
Security of that series when due; (b) failure to pay interest, if any, on any
Senior Debt Security of that series and any related coupons when due, continued
for 30 days; (c) failure to deposit any sinking fund payment or analogous
obligation, when due, continued for 30 days, in respect of any Senior Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Senior Indenture (other than a covenant included in the Senior
Indenture solely for the benefit of a series of Senior Debt Securities other
than that series), continued for 90 days after written notice as provided in the
Senior Indenture; and (e) certain events in bankruptcy, insolvency or
reorganization in respect of the Company. (Section 501). An Event of Default
with respect to a particular series of Senior Debt Securities does not
necessarily constitute an Event of Default with respect to any other series of
Senior Debt Securities issued under the same or another Senior Indenture. The
Trustee may withhold notice to the Holders of any series of Senior Debt
Securities of any default with respect to such series (except in the payment of
principal, premium or interest, if any) if it considers such withholding to be
in the interests of such Holders. (Section 602).
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If an Event of Default with respect to Senior Debt Securities of any series
at the time outstanding occurs and is continuing, unless the principal of all of
the Senior Debt Securities of such series shall have already become due and
payable, either the Trustee or the Holders of at least 25% in principal amount
of the outstanding Senior Debt Securities of that series may declare the
principal amount (or, if the Senior Debt Securities of that series are (i)
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of the series, or (ii) Indexed Securities or Dual
Currency Securities, the amount determined in accordance with the specified
terms of the series) of all the Senior Debt Securities of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to Senior Debt Securities of any series has been made, but before a
judgment or decree based on acceleration has been obtained and entered, the
Holders of a majority in principal amount of the outstanding Senior Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 502). For information as to waiver of defaults, see
"Meetings, Modification and Waiver."
The Senior Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during default to act with the required
standard of care, to exercise any of its rights or powers under such Senior
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity. (Section 603). Subject
to such provisions for indemnification of the Trustee, the Holders of a majority
in principal amount of the outstanding Senior Debt Securities of any series will
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 Senior Debt Securities of that
series. (Section 512).
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Senior Indenture and as to any default in such performance. (Section 1006).
SATISFACTION AND DISCHARGE
The Senior Indenture provides that the Company shall be discharged from its
obligations under the Senior Debt Securities of such series (with certain
exceptions) at any time prior to the Stated Maturity or redemption thereof when
(a) the Company has irrevocably deposited with the Trustee, in trust, (i)
sufficient funds in the currency or currency unit in which the Senior Debt
Securities of such series are payable to pay the principal of (and premium, if
any), and interest, if any, to Stated Maturity (or redemption) on, the Senior
Debt Securities of such series, or (ii) such amount of direct obligations of, or
obligations the principal of and interest, if any, on which are fully guaranteed
by, the government which issued the currency in which the Senior Debt Securities
of such series are payable, and which are not subject to prepayment, redemption
or call, as will, together with the predetermined and certain income to accrue
thereon without consideration of any reinvestment thereof, be sufficient to pay
when due the principal of (and premium, if any), and interest, if any, to Stated
Maturity (or redemption) on, the Senior Debt Securities of such series, or (iii)
such combination of such funds and securities as described in (i) and (ii),
respectively, as will, together with the predetermined and certain income to
accrue on any such securities as described in (ii), be sufficient to pay when
due the principal of (and premium, if any), and interest, if any, to Stated
Maturity (or redemption) on, the Senior Debt Securities of such series and (b)
the Company has paid all other sums payable with respect to the Senior Debt
Securities of such series and (c) certain other conditions are met. Upon such
discharge, the Holders of the Senior Debt Securities of such series shall no
longer be entitled to the benefits of the Indenture, except for certain rights,
including registration of transfer and exchange of the Senior Debt Securities of
such series and replacement of lost, stolen or mutilated Senior Debt Securities,
and shall look only to such deposited funds or obligations for payment.
(Sections 401 and 403).
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DEFEASANCE OF CERTAIN OBLIGATIONS
If the terms of the Senior Debt Securities of any series so provide, the
Company may omit to comply with the restrictive covenants in Section 801
("Company May Consolidate, Etc., Only on Certain Terms"), Section 1005
("Limitations on Liens on Common Stock of Designated Subsidiaries") and any
other specified covenant and any such omission with respect to such Sections
shall not be an Event of Default with respect to the Senior Debt Securities of
such series, if (a) the Company has irrevocably deposited with the applicable
Trustee, in trust, (i) sufficient funds in the currency or currency unit in
which the Senior Debt Securities of such series are payable to pay the principal
of (and premium, if any), and interest, if any, to Stated Maturity (or
redemption) on, the Senior Debt Securities of such series, or (ii) such amount
of direct obligations of, or obligations the principal of and interest, if any,
on which are fully guaranteed by, the government which issued the currency in
which the Senior Debt Securities of such series are payable and which are not
subject to prepayment, redemption or call, as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay when due the principal of (and
premium, if any), and interest, if any, to Stated Maturity (or redemption) on,
the Senior Debt Securities of such series or, (iii) such combination of such
funds and securities as described in (i) and (ii), respectively, as will,
together with the predetermined and certain income to accrue on any such
securities as described in (ii), be sufficient to pay when due the principal of
(and premium, if any), and interest, if any, to Stated Maturity (or redemption)
on, the Senior Debt Securities of such series and (b) certain other conditions
are met. The obligations of the Company under the Senior Indenture with respect
to the Senior Debt Securities of such series, other than with respect to the
covenants referred to above shall remain in full force and effect. (Section
1009).
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Senior Indenture may be made by the
Company and the Trustee with the consent of the Holders of not less than 66 2/3%
in principal amount of the Outstanding Debt Securities of each series issued
under the Senior Indenture affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
Holder of each Outstanding Debt Security affected thereby, (a) change the Stated
Maturity of the principal of, or any instalment of principal of or interest, if
any, on, any Senior Debt Security, (b) reduce the principal amount of, or the
premium, if any, or interest, if any, on, any Senior Debt Security, (c) change
any obligation of the Company to pay additional amounts, (d) reduce the amount
of principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (e) adversely affect the right of repayment or repurchase,
if any, at the option of the Holder, (f) reduce the amount, or postpone the date
fixed for, any payment under any sinking fund or analogous provision, (g) change
the place or currency or currency unit of payment of principal of or premium, if
any, or interest, if any, on any Senior Debt Security, (h) change or eliminate
the right, if any, to elect payment in a coin or currency or currency unit other
than that in which Senior Debt Securities which are Registered Securities are
denominated or stated to be payable, (i) impair the right to institute suit for
the enforcement of any payment on or with respect to any Senior Debt Security,
(j) reduce the percentage in principal amount of Outstanding Debt Securities of
any series, the consent of the Holders of which is required for modification or
amendment of the Senior Indenture or for waiver of compliance with certain
provisions of the Senior Indenture or for waiver of certain defaults, (k) reduce
the requirements contained in the Senior Indenture for quorum or voting, or (l)
change any obligation of the Company to maintain an office or agency in the
places and for the purposes required in the Senior Indenture. (Section 902).
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Senior Debt Securities of that series waive, insofar as that series is
concerned, compliance by the Company with certain restrictive provisions of the
Senior Indenture. (Section 1007). The Holders of not less than a majority in
principal amount of the
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Outstanding Debt Securities of any series may on behalf of the Holders of all
Senior Debt Securities of that series and any coupons appertaining thereto waive
any past default under the Senior Indenture with respect to that series, except
a default in the payment of the principal of or premium, if any, or interest, if
any, on any Senior Debt Security of that series or in the payment of any sinking
fund instalment or analogous obligation or in respect of a provision which under
the Senior Indenture cannot be modified or amended without the consent of the
Holder of each Outstanding Debt Security of that series affected. (Section 513).
The Senior Indenture contains provisions for convening meetings of the
Holders of Senior Debt Securities of a series if Senior Debt Securities of that
series are issuable as Bearer Securities. (Section 1301). A meeting may be
called at any time by the applicable Trustee, and also, upon request, by the
Company or Holders of at least 10% in principal amount of the Outstanding Debt
Securities of such series, in any such case upon notice given in accordance with
"Notices" below. (Section 1302). Except as limited by the proviso in the second
preceding paragraph, any resolution presented at a meeting or adjourned meeting
at which a quorum is present may be adopted by the affirmative vote of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
that series; provided, however, that, except as limited by the proviso in the
second preceding paragraph, any resolution with respect to any consent or waiver
which may be given by the Holders of not less than 66 2/3% in principal amount
of the Outstanding Debt Securities of a series may be adopted at a meeting or an
adjourned meeting at which a quorum is present only by the affirmative vote of
66 2/3% in principal amount of the Outstanding Debt Securities of that series;
and provided, further, that, except as limited by the proviso in the second
preceding paragraph, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of Outstanding Debt Securities of a series
may be adopted at a meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of Holders of
Senior Debt Securities of any series duly held in accordance with the applicable
Senior Indenture will be binding on all Holders of Senior Debt Securities of
that series and the related coupons. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the Outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the Holders of
not less than 66 2/3% in principal amount of the Outstanding Debt Securities of
a series, the persons holding or representing 66 2/3% in principal amount of the
Outstanding Debt Securities of such series will constitute a quorum.(Section
1304).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may, without the consent of any Holders of Outstanding Debt
Securities, consolidate or merge with or into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate or merge with or into, or transfer or lease its assets substantially
as an entirety to, the Company, provided that (i) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
which acquires or leases the assets of the Company substantially as an entirety
is organized under the laws of any United States jurisdiction and assumes the
Company obligations on the Senior Debt Securities and under the Senior
Indenture, (ii) after giving effect to the transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing, and (iii) certain other
conditions are met. (Section 801).
NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement
relating to a series of Senior Debt Securities, notices to Holders of Bearer
Securities will be given by publication in a daily
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newspaper in the English language of general circulation in The City of New York
and in London, and so long as such Bearer Securities are listed on the Stock
Exchange and the Stock Exchange shall so require, in a daily newspaper of
general circulation in Luxembourg or, if not practical, elsewhere in Western
Europe. Such publication is expected to be made in The Wall Street Journal, the
Financial Times and the Luxemburger Wort. Notices to Holders of Registered
Securities will be given by mail to the addresses of such Holders as they appear
in the Security Register. (Sections 101 and 106).
TITLE
Title to any temporary global Senior Debt Security, any permanent global
Senior Debt Security, any Bearer Securities and any coupons appertaining thereto
will pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon and the registered owner of any Registered Security as the absolute owner
thereof (whether or not such Senior Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308).
REPLACEMENT OF DEBT SECURITIES AND COUPONS
Any mutilated Senior Debt Security or a Senior Debt Security with a
mutilated coupon appertaining thereto will be replaced by the Company at the
expense of the Holder upon surrender of such Senior Debt Security to the
Trustee. Senior Debt Securities or coupons that become destroyed, stolen or lost
will be replaced by the Company at the expense of the Holder upon delivery to
the Trustee of the Senior Debt Security and coupons or evidence of the
destruction, loss or theft thereof satisfactory to the Company and the Trustee;
in the case of any coupon which becomes destroyed, stolen or lost, such coupon
will be replaced by issuance of a new Senior Debt Security in exchange for the
Senior Debt Security to which such coupon appertains. In the case of a
destroyed, lost or stolen Senior Debt Security or coupon an indemnity
satisfactory to the Trustee and the Company may be required at the expense of
the Holder of such Senior Debt Security or coupon before a replacement Senior
Debt Security will be issued. (Section 306).
CONCERNING THE TRUSTEES
The Company and its affiliates maintain bank accounts, borrow money and have
other customary banking relationships with the Trustee.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered or sold during the restricted period (as defined
under "Description of Senior Debt Securities-- Denominations, Registration and
Transfer"), or delivered in definitive form in connection with a sale during the
restricted period, in the United States or to United States persons other than
to (a) the United States office of (i) an international organization (as defined
in Section 7701(a)(18) of the Code), (ii) a foreign central bank (as defined in
Section 895 of the Code), or (iii) any underwriter, agent, or dealer offering or
selling Bearer Securities during the restricted period (a "Distributor")
pursuant to a written contract with the issuer or with another Distributor, that
purchases Bearer Securities for resale or for its own account and agrees to
comply with the requirements of Section 165(j)(3)(A), (B), or (C) of the Code,
or (b) the foreign branch of a United States financial institution purchasing
for its own account or for resale, which institution agrees to comply with the
requirements of Section 165(j)(3)(A), (B), or (C) of the Code. In addition, a
sale of a Bearer Security may be made during the restricted period to a United
States person who acquired and holds the Bearer Security on the Certification
Date through a foreign branch of a United States financial institution that
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Code. Any Distributor (including an affiliate of a Distributor) offering or
selling Bearer Securities during the restricted period must agree not to offer
or sell Bearer Securities in the United States or to United States persons
(except as discussed above) and must employ procedures reasonably designed to
ensure that its employees or agents directly engaged in selling Bearer
Securities are aware of these restrictions.
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Bearer Securities and their interest coupons will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Section 165(j) and 1287(a) of the
Internal Revenue Code."
Purchasers of Bearer Securities may be affected by certain limitations under
United States tax laws. See "United States Taxation--Backup Withholding."
As used herein, "United States person" means 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 and an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source, and "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. The term "Non-United States Holder" means any Holder which is
not an United States person.
DESCRIPTION OF SENIOR SUBORDINATED DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Senior Subordinated Debt Securities to which any Prospectus Supplement may
relate. The particular terms of the Senior Subordinated Debt Securities offered
by any Prospectus Supplement and the extent, if any, to which such general
provisions may or may not apply to the Senior Subordinated Debt Securities so
offered will be described in the Prospectus Supplement relating to such Senior
Subordinated Debt Securities.
The Securities are to be issued under an indenture, dated as of June 14,
1989 (the "Original Indenture"), as amended and supplemented (the Original
Indenture, as amended and supplemented, the "Subordinated Indenture") between
the Company and Bank of America Illinois (formerly Continental Bank), as trustee
(the "Trustee"). The form of such Original Indenture is incorporated by
reference as an exhibit to the Registration Statements and copies of the
supplements thereto are filed as exhibits to the Registration Statements. This
Prospectus contains descriptions of all material provisions of the Subordinated
Indenture. The summaries of such provisions of the Indenture do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Subordinated Indenture, including the definitions
therein of certain terms. Wherever particular provisions or defined terms of the
Subordinated Indenture are referred to, such provisions or defined terms are
incorporated herein by reference. All articles and sections of the Subordinated
Indenture, and all capitalized terms set forth below, have the meanings
specified in the Subordinated Indenture.
GENERAL
The Subordinated Indenture does not limit the aggregate principal amount of
Senior Subordinated Debt Securities which may be issued thereunder and provides
that Senior Subordinated Debt Securities may be issued thereunder from time to
time in one or more series. The Senior Subordinated Debt Securities will be
unsecured obligations of the Company and will rank equally with all indebtedness
of the Company designated as Senior Subordinated Indebtedness. At September 30,
1995, approximately $3.2 billion of Senior Subordinated Indebtedness (on an
unconsolidated basis) was outstanding.
Reference is made to the Prospectus Supplement relating to the particular
series of Senior Subordinated Debt Securities offered thereby for the following
terms of such Senior Subordinated Debt Securities: (1) the title of such Senior
Subordinated Debt Securities; (2) any limit on the aggregate principal amount of
such Senior Subordinated Debt Securities; (3) the date or dates on which such
Senior Subordinated Debt Securities will mature; (4) the rate or rates (which
may be fixed or variable) per annum at which such Senior Subordinated Debt
Securities will bear interest, if any, and the date
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from which such interest will accrue; (5) the dates on which such interest will
be payable and the Regular Record Dates for such Interest Payment Dates; (6) any
mandatory or optional sinking fund or obligation to purchase or analogous
provisions; (7) if applicable, the date after which and the price or prices at
which such Senior Subordinated Debt Securities may, pursuant to any optional or
mandatory redemption provisions, be redeemed at the option of the Company or of
the Holder thereof and the other detailed terms and provisions of such optional
or mandatory redemption; (8) any additional restrictive convenants included for
the benefit of the Holders of such Senior Subordinated Debt Securities; (9) any
additional Events of Acceleration or Events of Default provided with respect to
such Senior Subordinated Debt Securities; and (10) any other terms of such
Senior Subordinated Debt Securities.
The Subordinated Indenture provides the Company with the ability, in
addition to the ability to issue Senior Subordinated Debt Securities with terms
different from those of Senior Subordinated Debt Securities previously issued,
to "reopen" a previous issue of Senior Subordinated Debt Securities and issue
additional Senior Subordinated Debt Securities of such series. (Section 301).
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of and premium, if any, and interest, if any, on the Senior
Subordinated Debt Securities offered thereby will be payable, and such Senior
Subordinated Debt Securities will be exchangeable and transfers thereof will be
registrable, at the office of the Trustee at the address designated in the
Prospectus Supplement, provided that, at the option of the Company, payment of
interest may be made by check mailed to the address of the Person entitled
thereto as it appears in the Security Register. (Sections 305, 307 and 308).
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Senior Subordinated Debt Securities offered thereby will be issued only in
fully registered form without coupons in denominations of $1,000 or any integral
multiple thereof. (Section 302). No service charge will be made for any transfer
or exchange of such Senior Subordinated Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 305).
Securities may be issued under the Subordinated Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount from the
principal amount thereof. "Original Issue Discount Security" means any security
which provides for an amount less than the principal amount thereof to be due
and payable following an Event of Acceleration or an Event of Default. (Section
101). If the Senior Subordinated Debt Securities are Original Issue Discount
Securities or are treated as issued with original issue discount for federal
income tax purposes, special federal income tax, accounting and other
considerations applicable thereto will be described in the Prospectus Supplement
relating thereto.
RESTRICTIONS ON PAYMENT
The Company's obligation to pay the Senior Subordinated Debt Securities at
maturity shall be suspended if, after giving effect to such payment, the
Company's net capital would be reduced below its Applicable Minimum Capital or
its adjusted net capital. The Company's Applicable Minimum Capital and adjusted
net capital are the minimum amounts of capital to be maintained by the Company
as required by the rules and regulations of various domestic exchanges, boards
of trade and governmental agencies to which it is subject in order to permit
payment of subordinated debt capital. If such obligation is suspended for more
than six months, the Company will be required to liquidate its business.
If any principal payment is made on the Senior Subordinated Debt Securities at a
time when the Company's net capital is below its Applicable Minimum Capital, the
Holders of the Senior Subordinated Debt Securities are required to repay to the
Company, its successors or assigns, the sum so paid; provided however, that any
suit for such recovery must be commenced within two years of the date of such
payment. (Sections 702(b) and 1203).
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The Company may not make any optional redemptions of the Senior Subordinated
Debt Securities without the consent of various domestic exchanges and boards of
trade or if the Company's net capital will be reduced below certain minimum
requirements. If any principal payment is made on the Senior Subordinated Debt
Securities notwithstanding the foregoing, the Holders of the Senior Subordinated
Debt Securities are required to repay to the Company, its successors or assigns,
the sum so paid, provided, however, that any suit for such recovery must be
commenced within two years of the date of such payment. (Section 1203).
REDEMPTION
Unless otherwise indicated in the Prospectus Supplement relating thereto, if
the Senior Subordinated Debt Securities offered thereby should cease to
constitute "net capital" for purposes of the Net Capital Rule (as hereinafter
defined), then the Company at any time may redeem for cash such Senior
Subordinated Debt Securities in whole or in part at their principal amount (or,
if the Senior Subordinated Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) plus accrued interest, if any. (Section 1202).
SUBORDINATION
The payment of the principal of, premium, if any, and interest, if any, on
the Senior Subordinated Debt Securities is expressly subordinated, to the extent
and in the manner set forth in the Subordinated Indenture, in right of payment
to the prior payment of all Senior Indebtedness. "Senior Indebtedness" includes
all Indebtedness (as defined below) of the Company, to the extent unsecured,
arising out of any matter or event occurring prior to the date on which any
payment on or in respect of any Debt Securities matures and becomes due and
payable, which has not in whole or in part been subordinated in right of payment
to any other Indebtedness of the Company. "Indebtedness" means all obligations
which would be treated as liabilities in accordance with generally accepted
accounting principles. By reason of such subordination, upon the maturity of any
Senior Indebtedness, full payment in accordance with the terms thereof must be
made or provided for before any payment of principal or interest, if any, or
premium, if any, is made upon the Senior Subordinated Debt Securities and, in
the event of bankruptcy, assignment for benefit of creditors, liquidation,
reorganization or other marshalling of assets and liabilities of the Company,
payment of the principal and interest, if any, and/or premium, if any, on the
Senior Subordinated Debt Securities will be subordinated to the prior payment in
full of all Senior Indebtedness, and nothing shall be paid to the Holders of the
Senior Subordinated Debt Securities unless all amounts due to the Holders of
Senior Indebtedness has been paid or provided for. (Sections 401 and 402).
There is no limitation in the Subordinated Indenture on the amount of Senior
Indebtedness or other Indebtedness that may exist. At September 30, 1995, Senior
Indebtedness (on an unconsolidated basis) was approximately $139 billion and
total assets of the Company (on an unconsolidated basis) were approximately $144
billion. The Prospectus Supplement related to a particular series of Senior
Subordinated Debt Securities will set forth the amount of Senior Indebtedness
then outstanding.
JUNIOR INDEBTEDNESS
The Senior Subordinated Debt Securities will be senior in right of payment
to certain Indebtedness of the Company designated as subordinated debt in the
respective instrument or plan document pursuant to which such Indebtedness was
issued or incurred. (Section 411). At September 30, 1995, approximately $211
million of such subordinated debt (on an unconsolidated basis) was outstanding.
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FINANCIAL COVENANTS
The Company may pay dividends on its common stock (with the exception of
dividends paid in common stock) only to the extent that the aggregate of such
dividends paid subsequent to June 30, 1978 does not exceed the sum of (i)
$5,000,000, (ii) the aggregate Consolidated Net Income earned since that date,
(iii) the net proceeds of the sale since that date of common stock of the
Company and (iv) the net proceeds of indebtedness sold since that date which was
thereafter converted into common stock of the Company. (Section 505).
EVENTS OF DEFAULT AND ACCELERATION AND NOTICE THEREOF
The Holders of a majority in aggregate principal amount of the outstanding
Senior Subordinated Debt Securities of a series will have the right to direct
the time, method and place of conducting any proceeding for exercising any
remedy available to the Trustee with respect to the Securities of such series.
The Trustee or the Holders of not less than 25% in aggregate principal amount of
the outstanding Senior Subordinated Debt Securities of a series may, if an Event
of Acceleration as defined in the Subordinated Indenture occurs with respect to
Senior Subordinated Debt Securities of that series, declare, by notice in
writing, the principal amount (or, if the Senior Subordinated Debt Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all
Outstanding Securities of that series and the interest accrued thereon to be due
and payable on the last business day of the sixth calendar month following such
notice (but not earlier than the first anniversary of the date of issuance of
such Senior Subordinated Debt Securities in any event) and, if such Event of
Acceleration is not cured by the Company prior to such last business day, the
Outstanding Senior Subordinated Debt Securities of that series will be due and
payable on that date. In case an Event of Default with respect to Senior
Subordinated Debt Securities of any series shall occur, the principal amount
(or, if the Senior Subordinated Debt Securities of that series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all Outstanding Securities of that
series will become immediately due and payable. Subject to provisions requiring
the exercise of the degree of care a prudent man would show in the conduct of
his own affairs, the Trustee will be under no obligation to exercise any of its
rights or powers under the Subordinated Indenture at the request of any of the
Holders of Senior Subordinated Debt Securities unless they shall have offered to
the Trustee reasonable security or indemnity. Except as specifically provided in
the Subordinated Indenture, nothing therein relieves the Trustee from liability
for its own negligent action, its own negligent failure to act or its own wilful
misconduct. (Sections 702(a), 703, 714, 801 and 803(e)).
The following events constitute Events of Acceleration as defined in the
Subordinated Indenture with respect to any series of Senior Subordinated Debt
Securities: failure for 30 days to pay interest upon any Senior Subordindated
Debt Security of that series when due; failure to pay principal or premium, if
any, on any Senior Subordinated Debt Security of that series when due; failure
for 60 days after notice to perform a certain covenant in the Subordinated
Indenture; and, subject to certain conditions, acceleration of the maturity of
Indebtedness of the Company constituting net capital aggregating more that
$10,000,000 upon default thereon. Events of Default include: bankruptcy,
liquidation and similar proceedings and the failure for 15 consecutive days to
maintain the minimum amount of net capital under the Net Capital Rule necessary
to permit the Company to carry on its business as a broker-dealer. (Section
701).
The Subordinated Indenture provides that the Trustee shall, within 90 days
after the occurrence of an event described in the preceding paragraph (without
regard to any period of grace as therein specified or any requirement for the
giving of notice) or the failure of the Company to duly observe or perform any
provision of the Subordinated Indenture with respect to Senior Subordinated Debt
Securities of any series, give to the Holders of the outstanding Senior
Subordinated Debt Securities of that series notice of all uncured defaults known
to it with respect to Senior Subordinated Debt
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Securities of that series (including both Events of Default and Events of
Acceleration); provided that, except in the case of default in the payment of
principal or interest, if any, on any of the Subordinated Debt Securities of
that series or the payment of any sinking fund installment, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the Holders of the outstanding
Senior Subordinated Debt Securities of that series. (Section 802).
The Company must deliver to the Trustee annually an officers' certificate
stating whether or not the signers thereof have obtained knowledge of any
existing default by the Company in the performance or fulfillment of the
covenants, agreements and obligations contained in the Subordinated Indenture
with respect to any series of Senior Subordinated Debt Securities and, if so,
specifying each such default and the nature thereof. (Section 506).
MODIFICATION OF THE SUBORDINATED INDENTURE
Modifications and amendments of the Subordinated Indenture may be made by
the Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the outstanding Senior Subordinated
Debt Securities of each series affected thereby; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
outstanding Senior Subordinated Debt Security affected thereby: (a) change the
stated maturity date of the principal of, or any installment of principal of or
interest, if any, on, any Senior Subordinated Debt Security; (b) reduce the
principal amount of, or the premium (if any) or interest, if any, on, any Senior
Subordinated Debt Security; (c) adversely affect any right of repayment at the
option of the Holder of any Senior Subordinated Debt Security, or reduce the
amount of, or postpone the date fixed for, the payment of any sinking fund or
analogous obligation; (d) reduce the amount of principal of an Original Issue
Discount Security payable upon acceleration of the Maturity thereof; (e) change
the place or currency of payment of principal of, or premium (if any) or
interest, if any, on, any Senior Subordinated Debt Security; (f) impair the
right to institute suit for the enforcement of any payment on or with respect to
any Senior Subordinated Debt Security; or (g) reduce the percentage in principal
amount of outstanding Senior Subordinated Debt Securities of any series, the
consent of the Holders of which is required for modification or amendment of the
Subordinated Indenture or for waiver of compliance with certain provisions of
the Subordinated Indenture or for waiver of certain defaults. (Section 1102).
The Holders of not less than a majority in aggregate principal amount of the
outstanding Senior Subordinated Debt Securities of any series may on behalf of
the Holders of all Senior Subordinated Debt Securities of that series waive,
insofar as that series is concerned, compliance by the Company with certain
restrictive covenants of the Subordinated Indenture. (Section 507). The Holders
of a majority in aggregate principal amount of the outstanding Senior
Subordinated Debt Securities of any series may on behalf of the Holders of all
Senior Subordinated Debt Securities of that series waive any past default under
the Subordinated Indenture with respect to that series, except a default in the
payment of the principal of, or the premium (if any) or interest, if any, on,
any Senior Subordinated Debt Security of that series or in respect of a
provision which under the Subordinated Indenture cannot be modified or amended
without the consent of the Holder of each outstanding Senior Subordinated Debt
Security of that series affected. (Section 715).
SATISFACTION AND DISCHARGE
The Subordinated Indenture may be fully satisfied and discharged not earlier
than two years after payment of all outstanding Senior Subordinated Debt
Securities shall have been made or duly provided for. (Section 601).
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CERTAIN INFORMATION RELATING TO THE TRUSTEE
The Company and its affiliates maintain bank accounts, borrow money and have
other customary banking relationships with the Trustee.
UNITED STATES TAXATION
In the opinion of Simpson Thacher & Bartlett, special United States tax
counsel to the Company, the following discussion is an accurate summary of the
material United States federal income tax consequences of the purchase,
ownership and disposition of Debt Securities as of the date hereof.
Except where noted, it deals only with Debt Securities held as
capital assets by United States Holders and does not deal with special
situations, such as those of dealers in securities or currencies, financial
institutions, life insurance companies, persons holding Debt Securities as a
part of a hedging or conversion transaction or a straddle or United States
Holders whose "functional currency" is not the U.S. dollar. Furthermore, the
discussion below is based upon the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), and regulations, rulings and judicial decisions
thereunder as of the date hereof, and such authorities may be repealed, revoked
or modified so as to result in federal income tax consequences different from
those discussed below. Any special United States federal income tax
considerations relevant to a particular issue of Debt Securities will be
provided in the applicable Prospectus Supplement. PERSONS CONSIDERING THE
PURCHASE, OWNERSHIP OR DISPOSITION OF DEBT SECURITIES SHOULD CONSULT THEIR OWN
TAX ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR
PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY
OTHER TAXING JURISDICTION.
PAYMENTS OF INTEREST
Except as set forth below, interest on a Debt Security will generally be
taxable to a United States Holder as ordinary income at the time it is paid or
accrued in accordance with the United States Holder's method of accounting for
tax purposes. As used herein, a "United States Holder" of a Debt Security means
a holder that 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 any political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. A "Non-United States Holder" is a holder that is not a United
States Holder.
ORIGINAL ISSUE DISCOUNT
United States Holders of Debt Securities issued with original issue discount
("OID") will be subject to special tax accounting rules, as described in greater
detail below. United States Holders of such Debt Securities should be aware that
they generally must include OID in gross income in advance of the receipt of
cash attributable to that income. However, United States Holders of such Debt
Securities generally will not be required to include separately in income cash
payments received on the Debt Securities, even if denominated as interest, to
the extent such payments do not constitute qualified stated interest (as defined
below). Debt Securities issued with OID will be referred to as "Original Issue
Discount Debt Securities." Notice will be given in the applicable Prospectus
Supplement when the Company determines that a particular Debt Security will be
an Original Issue Discount Debt Security.
This summary is based upon final Treasury regulations applicable to debt
instruments issued with OID (the "OID Regulations"). The following discussion
does not address Debt Securities providing for contingent payments other than
Debt Securities that bear qualified stated interest.
A Debt Security with an "issue price" that is less than its stated
redemption price at maturity (the sum of all payments to be made on the Debt
Security other than "qualified stated interest") will be issued with OID if such
difference is at least 0.25 percent of the stated redemption price at maturity
multiplied by the number of complete years to maturity. The "issue price" of
each Debt Security in a particular offering will be the first price at which a
substantial amount of that particular offering is sold
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(other than to an underwriter, placement agent or wholesaler). The term
"qualified stated interest" means stated interest that is unconditionally
payable in cash or in property (other than debt instruments of the issuer) at
least annually at a single fixed rate or, subject to certain conditions, based
on one or more indices. Interest is payable at a single fixed rate only if the
rate appropriately takes into account the length of the interval between
payments. Notice will be given in the applicable Prospectus Supplement when the
Company determines that a particular Debt Security will bear interest that is
not qualified stated interest.
In the case of a Debt Security issued with de minimis OID (i.e., discount
that is not OID because it is less than 0.25 percent of the stated redemption
price at maturity multiplied by the number of complete years to maturity), the
United States Holder generally must include such de minimis OID in income as
principal payments on the Debt Securities are made in proportion to the stated
principal amount of the Debt Security. Any amount of de minimis OID that has
been included in income shall be treated as capital gain.
Original Issue Discount Debt Securities that may be redeemed prior to their
stated maturity at the option of the Company and/or at the option of the Holder
may be subject to rules that differ from the general rules discussed herein.
Persons considering the purchase of Original Issue Discount Debt Securities with
such features should carefully examine the applicable Prospectus Supplement and
should consult their own tax advisors with respect to such features since the
tax consequences with respect to OID will depend, in part, on the particular
terms and features of the Debt Securities.
United States Holders of Original Issue Discount Debt Securities with a
maturity upon issuance of more than one year must, in general, include OID in
income in advance of the receipt of some or all of the related cash payments.
The amount of OID includible in income by the initial United States Holder of an
Original Issue Discount Debt Security is the sum of the "daily portions" of OID
with respect to the Debt Security for each day during the taxable year or
portion of the taxable year in which such United States Holder held such Debt
Security ("accrued OID"). The daily portion is determined by allocating to each
day in any "accrual period" a pro rata portion of the OID allocable to that
accrual period. The "accrual period" for an Original Issue Discount Debt
Security may be of any length and may vary in length over the term of the Debt
Security, provided that each accrual period is no longer than one year and each
scheduled payment of principal or interest occurs on the first day or the final
day of an accrual period. The amount of OID allocable to any accrual period is
an amount equal to the excess, if any, of (a) the product of the Debt Security's
adjusted issue price at the beginning of such accrual period and its yield to
maturity (determined on the basis of compounding at the close of each accrual
period and properly adjusted for the length of the accrual period) over (b) the
sum of any qualified stated interest allocable to the accrual period. OID
allocable to a final accrual period is the difference between the amount payable
at maturity (other than a payment of qualified stated interest) and the adjusted
issue price at the beginning of the final accrual period. Special rules will
apply for calculating OID for an initial short accrual period. The "adjusted
issue price" of a Debt Security at the beginning of any accrual period is equal
to its issue price increased by the accrued OID for each prior accrual period
(determined without regard to the amortization of any acquisition or bond
premium, as described below) and reduced by any payments made on such Debt
Security (other than qualified stated interest) on or before the first day of
the accrual period. Under these rules, a United States Holder will have to
include in income increasingly greater amounts of OID in successive accrual
periods. The Company is required to provide information returns stating the
amount of OID accrued on Debt Securities held of record by persons other than
corporations and other exempt Holders.
In the case of an Original Issue Discount Debt Security that is a floating
rate Debt Security, both the "yield to maturity" and "qualified stated interest"
will be determined solely for purposes of calculating the accrual of OID as
though the Debt Security will bear interest in all periods at a fixed rate
generally equal to the rate that would be applicable to interest payments on the
Debt Security on its date of issue or, in the case of certain floating rate Debt
Securities, the rate that reflects the yield to maturity that is reasonably
expected for the Debt Security. Additional rules may apply if interest on a
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floating rate Debt Security is based on more than one interest index. Persons
considering the purchase of Floating Rate Debt Securities should carefully
examine the applicable Prospectus Supplement and should consult their own tax
advisors regarding the U.S. federal income tax consequences of the holding and
disposition of such Debt Securities.
United States Holders may elect to treat all interest on any Debt Security
as OID and calculate the amount includible in gross income under the constant
yield method described above. For the purposes of this election, interest
includes stated interest, acquisition discount, OID, de minimis OID, market
discount, de minimis market discount and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium. The election is to be made for
the taxable year in which the United States Holder acquired the Debt Security,
and may not be revoked without the consent of the Internal Revenue Service (the
"IRS"). UNITED STATES HOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS ABOUT
THIS ELECTION.
SHORT-TERM DEBT SECURITIES
In the case of Original Issue Discount Debt Securities having a term of one
year or less ("Short-Term Debt Securities"), under the OID Regulations all
payments (including all stated interest) will be included in the stated
redemption price at maturity and, thus, United States Holders will generally be
taxable on the discount in lieu of stated interest. The discount will be equal
to the excess of the stated redemption price at maturity over the issue price of
a Short-Term Debt Security, unless the United States Holder elects to compute
this discount using tax basis instead of issue price. In general, individuals
and certain other cash method United States Holders of a Short-Term Debt
Security are not required to include accrued discount in their income currently
unless they elect to do so. United States Holders that report income for federal
income tax purposes on the accrual method and certain other United States
Holders are required to accrue discount on such Short-Term Debt Securities (as
ordinary income) on a straight-line basis, unless an election is made to accrue
the discount according to a constant yield method based on daily compounding. In
the case of a United States Holder that is not required, and does not elect, to
include discount in income currently, any gain realized on the sale, exchange or
retirement of the Short-Term Debt Security will be ordinary income to the extent
of the discount accrued through the date of sale, exchange or retirement. In
addition, a United States Holder that does not elect to currently include
accrued discount in income may be required to defer deductions for a portion of
the United States Holder's interest expense with respect to any indebtedness
incurred or continued to purchase or carry such Debt Securities.
MARKET DISCOUNT
If a United States Holder purchases a Debt Security (other than an Original
Issue Discount Debt Security) for an amount that is less than its stated
redemption price at maturity or, in the case of an Original Issue Discount Debt
Security, its adjusted issue price, the amount of the difference will be treated
as "market discount" for federal income tax purposes, unless such difference is
less than a specified de minimis amount. Under the market discount rules, a
United States Holder will be required to treat any principal payment on, or any
gain on the sale, exchange, retirement or other disposition of, a Debt Security
as ordinary income to the extent of the market discount which has not previously
been included in income and is treated as having accrued on such Debt Security
at the time of such payment or disposition. In addition, the United States
Holder may be required to defer, until the maturity of the Debt Security or its
earlier disposition in a taxable transaction, the deduction of all or a portion
of the interest expense on any indebtedness incurred or continued to purchase or
carry such Debt Security.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Debt Security, unless
the United States Holder elects to accrue on a constant interest method. A
United States Holder of a Debt Security may elect to include market discount in
income currently as it accrues (on either a ratable or constant interest
method), in which case the rule described above regarding deferral of interest
deductions will not apply. This election to include market discount in income
currently, once made, applies to all market discount obligations acquired on or
after the first taxable year to which the election applies and may not be
revoked without the consent of the IRS.
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ACQUISITION PREMIUM; AMORTIZABLE BOND PREMIUM
A United States Holder that purchases a Debt Security for an amount that is
greater than its adjusted issue price but equal to or less than the sum of all
amounts payable on the Debt Security after the purchase date other than payments
of qualified stated interest will be considered to have purchased such Debt
Security at an "acquisition premium." Under the acquisition premium rules, the
amount of OID which such holder must include in its gross income with respect to
such Debt Security for any taxable year will be reduced by the portion of such
acquisition premium properly allocable to such year.
A United States Holder that purchases a Debt Security for an amount in
excess of the sum of all amounts payable on the Debt Security after the purchase
date other than qualified stated interest will be considered to have purchased
such Debt Security at a "premium" and will not be required to include any OID in
income. A United States Holder generally may elect to amortize the premium over
the remaining term of the Debt Security on a constant yield method. The amount
amortized in any year will be treated as a reduction of the United States
Holder's interest income from the Debt Security. Bond premium on a Debt Security
held by a United States Holder that does not make such an election will decrease
the gain or increase the loss otherwise recognized on disposition of the Debt
Security. The election to amortize premium on a constant yield method once made
applies to all debt obligations held or subsequently acquired by the electing
United States Holder on or after the first day of the first taxable year to
which the election applies and may not be revoked without the consent of the
IRS.
SALE, EXCHANGE AND RETIREMENT OF DEBT SECURITIES
A United States Holder's tax basis in a Debt Security will, in general, be
the United States Holder's cost therefor, increased by OID, market discount or
any discount with respect to a Short-Term Debt Security previously included in
income by the United States Holder and reduced by any amortized premium and any
cash payments on the Debt Security other than qualified stated interest. Upon
the sale, exchange or retirement of a Debt Security, a United States Holder will
recognize gain or loss equal to the difference between the amount realized upon
the sale, exchange or retirement (less any accrued qualified stated interest,
which will be taxable as such) and the adjusted tax basis of the Debt Security.
Except as described above with respect to certain Short-Term Debt Securities or
with respect to market discount, such gain or loss will be capital gain or loss
and will be long-term capital gain or loss if at the time of sale, exchange or
retirement the Debt Security has been held for more than one year. Under current
law, net capital gains of individuals are, under certain circumstances, taxed at
lower rates than items of ordinary income. The deductibility of capital losses
is subject to limitations.
NON-UNITED STATES HOLDERS
Under present United States federal income and estate tax law, and subject
to the discussion below concerning backup withholding:
(a) no withholding of United States federal income tax will be required
with respect to the payment by the Company or any Paying Agent of principal,
premium, if any, or interest (which for purposes of this discussion includes
OID) on a Debt Security owned by a Non-United States Holder, provided (i)
that the beneficial owner does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of the
Company entitled to vote within the meaning of section 871(h)(3) of the Code
and the regulations thereunder, (ii) the beneficial owner is not a
controlled foreign corporation that is related to the Company through stock
ownership, (iii) the beneficial owner is not a bank whose receipt of
interest on a Debt Security is described in section 881(c)(3)(A) of the Code
and (iv) in the case of a Registered Security, the beneficial owner
satisfies the statement requirement (described generally below) set forth in
section 871(h) and section 881(c) of the Code and the regulations
thereunder;
(b) no withholding of United States federal income tax will be required
with respect to any gain or income realized by a Non-United States Holder
upon the sale, exchange or retirement of a Debt Security; and
23
<PAGE>
(c) a Debt Security beneficially owned by an individual who at the time
of death is a Non-United States Holder will not be subject to United States
federal estate tax as a result of such individual's death, provided that
such individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the company entitled
to vote within the meaning of section 871(h)(3) of the Code and provided
that the interest payments with respect to such Debt Security would not have
been, if received at the time of such individual's death, effectively
connected with the conduct of a United States trade or business by such
individual.
To satisfy the requirement referred to in (a)(iv) above, the beneficial
owner of such Debt Security, or a financial institution holding the Debt
Security on behalf of such owner, must provide, in accordance with specified
procedures, a paying agent of the Company with a statement to the effect that
the beneficial owner is not a U.S. person, citizen or resident. Pursuant to
current temporary Treasury regulations, these requirements will be met if (1)
the beneficial owner provides his name and address, and certifies, under
penalties of perjury, that he is not a U.S. person, citizen or resident (which
certification may be made on an Internal Revenue Service Form W-8 (or successor
form)) or (2) a financial institution holding the Debt Security on behalf of the
beneficial owner certifies, under penalties of perjury, that such statement has
been received by it and furnishes a paying agent with a copy thereof.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of premium, if
any, and interest (including OID) made to such Non-United States Holder will be
subject to a 30% withholding tax unless the beneficial owner of the Debt
Security provides the Company or its paying agent, as the case may be, with a
properly executed (1) Internal Revenue Service Form 1001 (or successor form)
claiming an exemption from withholding under the benefit of a tax treaty or (2)
Internal Revenue Service Form 4224 (or successor form) stating that interest
paid on the Note is not subject to withholding tax because it is effectively
connected with the beneficial owner's conduct of a trade or business in the
United States.
If a Non-United States Holder is engaged in a trade or business in the
United States and premium, if any, or interest (including OID) on the Debt
Security is effectively connected with the conduct of such trade or business,
the Non-United States Holder, although exempt from the withholding tax discussed
above, will be subject to United States federal income tax on such interest and
OID on a net income basis in the same manner as if it were a United States
Holder. In addition, if such holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments. For this purpose, such
premium, if any, and interest (including OID) on a Debt Security will be
included in such foreign corporation's earnings and profits.
Any gain or income realized upon the sale, exchange or retirement of a Debt
Security will not be subject to United States federal income tax if (i) such
gain or income is not effectively connected with a trade or business in the
United States of the Non-United States Holder, and (ii) in the case of a Non-
United States Holder who is an individual, either such individual is not present
in the United States for 183 days or more in the taxable year of such sale,
exchange or retirement, or certain other conditions are not met.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to certain
payments of principal, interest, OID and premium paid on Debt Securities and to
the proceeds of sale of a Debt Security made to United States Holders other than
certain exempt recipients (such as corporations). A 31% backup withholding tax
will apply to such payments if the United States Holder fails to provide a
taxpayer identification number or certification of foreign or other exempt
status or fails to report in full dividend and interest income.
No information reporting on IRS Form 1099 or backup withholding will be
required with respect to payments made by the Company or any paying agent to
Non-United States Holders (1) if those
24
<PAGE>
payments are made outside of the United States on Bearer Securities or (2) on
Registered Securities with respect to which a statement described in (a)(iv)
under "Non-United States Holders" has been received and the payor does not have
actual knowledge that the beneficial owner is a United States person. However,
interest (including OID) paid to a Non-United States Holder on a Registered
Security will be required to be reported annually on IRS Form 1042-S.
In addition, backup withholding and information reporting will not apply if
payments of the principal, interest, OID or premium on a Debt Security are paid
or collected by a foreign office of a custodian, nominee or other foreign agent
on behalf of the beneficial owner of such Debt Security, or if a foreign office
of a broker (as defined in applicable Treasury regulations) pays the proceeds of
the sale of a Debt Security to the owner thereof. If, however, such nominee,
custodian, agent or broker is, for United States federal income tax purposes, a
U.S. person, a controlled foreign corporation or a foreign person that derives
50% or more of its gross income for certain periods from the conduct of a trade
or business in the United States, such payments will not be subject to backup
withholding but will be subject to information reporting, unless (1) such
custodian, nominee, agent or broker has documentary evidence in its records that
the beneficial owner is not a U.S. person and certain other conditions are met
or (2) the beneficial owner otherwise establishes an exemption. Temporary
Treasury regulations provide that the Treasury is considering whether backup
withholding will apply with respect to such payments of principal, interest or
the proceeds of a sale that are not subject to backup withholding under the
current regulations. Under proposed Treasury regulations not currently in effect
backup withholding will not apply to such payments absent actual knowledge that
the payee is a United States person.
Payments of principal, interest, OID and premium on a Debt Security paid to
the beneficial owner of a Debt Security by a United States office of a
custodian, nominee or agent, or the payment by the United States office of a
broker of the proceeds of sale of a Debt Security, will be subject to both
backup withholding and information reporting unless the beneficial owner
provides the statement referred to in (a)(iv) above and the payor does not have
actual knowledge that the beneficial owner is a United States person or
otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
CAPITAL REQUIREMENTS
As registered broker-dealers, the Company and certain of its subsidiaries
(the "Regulated Subsidiaries") are subject to the SEC's net capital rule (Rule
15c3-1, the "Net Capital Rule"), promulgated under the Exchange Act. The
Exchange monitors the application of the Net Capital Rule by the Company, and
the NASD monitors the application of the Net Capital Rule by the Regulated
Subsidiaries. The Company and the Regulated Subsidiaries compute net capital
under the alternative method of the Net Capital Rule which requires the
maintenance of minimum net capital, as defined. A broker-dealer may be required
to reduce its business if its net capital is less than 4% of aggregate debit
balances and may also be prohibited from expanding its business or paying cash
dividends if resulting net capital would be less than 5% of aggregate debit
balances. In addition, the Net Capital Rule does not allow withdrawal of
subordinated capital if net capital would be less than 5% of such debit
balances.
The Net Capital Rule also limits the ability of broker-dealers to transfer
large amounts of capital to parent companies and other affiliates. Under the Net
Capital Rule equity capital can not be withdrawn from a broker-dealer without
the prior approval of the SEC when net capital after the withdrawal would be
less than 25% of its securities positions haircuts (which are deductions from
capital of certain specified percentages of the market value of securities to
reflect the possibility of a market decline prior to disposition). In addition,
the Net Capital Rule requires broker-dealers to notify the SEC and the
appropriate self-regulatory organization two business days before a withdrawal
of excess net capital if the withdrawal would exceed the greater of $500,000 or
30% of the broker-dealer's excess net capital, and two business days after a
withdrawal that exceeds the greater of $500,000 or 20%
25
<PAGE>
of excess net capital. Finally, the Net Capital Rule authorizes the SEC to order
a freeze on the transfer of capital if a broker-dealer plans a withdrawal of
more than 30% of its excess net capital and the SEC believes that such a
withdrawal would be detrimental to the financial integrity of the firm or would
jeopardize the broker-dealer's ability to pay its customers.
Compliance with the Net Capital Rule could limit those operations of the
Company and its Regulated Subsidiaries that require the intensive use of
capital, such as underwriting and trading activities and the financing of
customer account balances.
The Company is subject to other domestic and international regulatory
requirements with which it is required to comply.
OUTSTANDING SUBORDINATED DEBT INSTRUMENTS
The Company has issued various subordinated debt instruments in a form, and
to persons, approved by the NYSE in accordance with the provisions of NYSE Rule
325. When issued, the Debt Securities shall constitute such subordinated debt.
The Company is permitted to treat such subordinated debt as capital for the
purposes of the Net Capital Rule and NYSE Rule 325. The instruments evidencing
such subordinated debt provide that they shall be subordinated and junior in
right of payment to the prior payment in full, or provision for such payment, of
all obligations to all other present and future creditors of the Company (except
for other subordinated debt similarly subordinated).
PLAN OF DISTRIBUTION
The Company may sell Debt Securities through, or through underwriting
syndicates managed by, Lehman Brothers Inc. ("Lehman Brothers") alone or with
one or more other underwriters. The specific managing underwriter or
underwriters with respect to the offer and sale of Debt Securities are set forth
on the cover of a Prospectus Supplement relating to such Debt Securities and the
members of the underwriting syndicate, if any, are named in such Prospectus
Supplement. Only the underwriters so named in a Prospectus Supplement are
underwriters, in connection with the Debt Securities offered thereby. The
Prospectus Supplement also describes the discounts and commissions to be allowed
or paid to the underwriters, all other items constituting underwriting
compensation, the discounts and commissions to be allowed or paid to
dealers, if any, and the exchanges, if any, on which the Debt Securities will be
listed.
The Debt Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The obligations of the
underwriters to purchase such Debt Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Debt Securities of the series offered by the Prospectus Supplement if any of
such Debt Securities are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time. To the extent, if any, that Debt Securities to be purchased
by Lehman Brothers, as underwriter, are not sold by it at the public offering
price set forth in the Prospectus Supplement, the Company, as issuer of such
Debt Securities, will not receive the full amount of net proceeds of such Debt
Securities set forth on the cover of the Prospectus Supplement.
If so indicated in the Prospectus Supplement, the Company will authorize the
underwriters to solicit offers by certain institutional investors to purchase
Debt Securities providing for payment and delivery on a future date specified in
the Prospectus Supplement. There may be limitations on the minimum amount which
may be purchased by any such institutional investor or on the portion of the
aggregate principal amount of the particular Debt Securities which may be sold
pursuant to such arrangements. Institutional investors to which such offers may
be made, when authorized, include
26
<PAGE>
commercial and savings banks, insurance companies, pension funds, educational
and charitable institutions and such other institutions as may be approved by
the Company. The obligations of any such purchasers pursuant to such delayed
delivery and payment arrangements will not be subject to any conditions except
(i) the purchase by an institution of the particular Debt Securities shall not
at the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject, and (ii) the Company shall
have sold to such underwriters the total principal amount of such Debt
Securities less the principal amount thereof covered by such arrangements.
Underwriters will not have any responsibility in respect of the validity of such
arrangements or the performance of the Company or such institutional investors
thereunder.
The underwriters may be entitled under agreements entered into with the
Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which the underwriters may be required to make in respect thereof.
The underwriters may engage in transactions with, or perform services for, the
Company in the ordinary course of business.
Each underwriter will represent and agree that (i) it has not offered or
sold and will not offer or sell any Debt Securities to persons in the United
Kingdom except to persons whose ordinary activities involve then in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995 (the
"Regulations"); (ii) it complied and will comply with all applicable provisions
of the Financial Services Act 1986 and the Regulations with respect to anything
done by it in relation to the Debt Securities in, from or otherwise involving
the United Kingdom; and (iii) it has only issued or passed on and will only
issue or pass on to any person in the United Kingdom any document received by it
in connection with the issue of the Debt Securities if that person is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom such document may
otherwise lawfully be issued or passed on.
This Prospectus, together with an applicable Prospectus Supplement, may also
be used by Lehman Brothers International (Europe) ("LBIE") in connection with
offers and sales of Securities related to market making transactions, by and
through LBIE, at negotiated prices related to prevailing market prices at the
time of sale or otherwise. LBIE may act as principal or agent in such
transactions.
The underwriting arrangements for any offering of the Debt Securities will
comply with the requirements of Schedule E of the By-Laws of the NASD regarding
an NASD member firm underwriting its own securities. Pursuant to Section 5 of
Schedule E to the By-Laws of the NASD, the net proceeds to be received by the
Company from the sale of the Debt Securities shall be placed in a duly
established escrow account and shall not be released therefrom or used by the
Company in any manner until the Company has filed with the NASD a computation of
net capital in the manner required by and meeting the requirements of Section 5
of Schedule E.
ERISA MATTERS
The Company may be considered a "party in interest" within the meaning of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and a
"disqualified person" under corresponding provisions of the Code, with respect
to certain employee benefit plans. Certain transactions between an employee
benefit plan and a party in interest or disqualified person may result in
"prohibited transactions" within the meaning of ERISA and the Code. ANY EMPLOYEE
BENEFIT PLAN PROPOSING TO INVEST IN THE DEBT SECURITIES SHOULD CONSULT WITH ITS
LEGAL COUNSEL.
27
<PAGE>
LEGAL OPINIONS
Unless otherwise indicated in an applicable Prospectus Supplement relating
to Debt Securities, the validity of the Debt Securities offered hereby will be
passed upon for the Company by Karen M. Muller, Esq., Deputy General Counsel of
the Company, and for any underwriter by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), 425 Lexington Avenue, New
York, New York 10017. Simpson Thacher & Bartlett acts as counsel in various
matters for Lehman Brothers Holdings Inc., the Company and certain of their
subsidiaries.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements and schedules of the Company for the
eleven months ended November 30, 1994, and for the years ended December 31, 1993
and December 31, 1992 appearing in the Company's Transition Report on Form 10-K
for the eleven months ended November 30, 1994, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements and schedules are, and audited financial statements included in
subsequently filed documents will be, incorporated herein by reference in
reliance upon the reports of Ernst & Young LLP pertaining to such financial
statements (to the extent covered by consents filed with the Securities and
Exchange Commission) given upon the authority of such firm as experts in
accounting and auditing.
28
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY AGENT OR UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO LEHMAN BROTHERS INC.
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE OF
THIS PROSPECTUS.
--------------------- DEBT SECURITIES
TABLE OF CONTENTS
PAGE
----
Available Information................. 2
Documents Incorporated by Reference... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 3
Description of Senior Debt Securities.. 4
Limitations on Issuance of Bearer ---------------------
Securities.......................... 14
Description of Senior Subordinated PROSPECTUS
Debt Securities..................... 15
United States Taxation................ 20 , 1995
Capital Requirements.................. 25 ---------------------
Outstanding Subordinated Debt
Instruments......................... 26
Plan of Distribution.................. 26
ERISA Matters......................... 27
Legal Opinions........................ 28
Independent Accountants............... 28
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses to be incurred by Lehman Brothers
Inc. (the "Registrant"), in connection with the offering described in this
Registration Statement (other than underwriting discounts and commissions).
SEC registration fee............................................ $258,621
NASD fee........................................................ $ 30,500
Legal fees and expenses......................................... 50,000*
Accounting fees and expenses.................................... 40,000*
Fees and expenses of Trustee.................................... 30,000*
Blue Sky qualification fees and expenses........................ 25,000*
Printing and engraving fees..................................... 40,000*
Miscellaneous................................................... 2,879*
--------
Total..................................................... $477,000
--------
--------
- ------------
* Estimated and subject to future contingencies
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of the Registrant requires the
Registrant to indemnify its directors and officers to the fullest extent
permitted by Delaware General Corporation Law. In addition, the directors of the
Registrant are insured under officers' and directors' liability insurance
policies purchased by the Company. The directors, officers and employees of the
Registrant are also insured against fiduciary liabilities under the Employee
Retirement Income Security Act of 1974.
Any underwriting agreement or agency agreement with respect to an offering
of securities registered hereunder will provide for the indemnification of the
Registrant and its officers and directors by the underwriters or agents, as the
case may be, against certain liabilities including liabilities under the
Securities Act of 1933.
ITEM 16. EXHIBITS
The Exhibit Index on page E-1 is hereby incorporated by reference.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to
II-1
<PAGE>
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Act of 1934 that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Restated Certificate of Incorporation and other
provisions summarized in Item 15 above, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 23rd day of
October, 1995.
LEHMAN BROTHERS INC.
By /s/ Michael R. Milversted
...................................
Michael R. Milversted
Treasurer
II-3
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Thomas A. Russo, Michael R. Milversted and Karen
M. Muller and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) and supplements to this Registration
Statement and any Registration Statement previously filed by the Registrant or a
predecessor in interest, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE><CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------ -----------------
<S> <C> <C>
/s/ RICHARD S. FULD, JR. Chairman of the Board, Chief October 23, 1995
........................................ Executive Officer, and
Richard S. Fuld, Jr. Director (principal
executive officer)
/s/ T. CHRISTOPHER PETTIT Chief Operating Officer, October 23, 1995
........................................ President and Director
T. Christopher Pettit
/s/ ROBERT MATZA Chief Financial Officer and October 23, 1995
........................................ Director (principal
Robert Matza financial officer)
/s/ DAVID GOLDFARB (principal accounting officer) October 23, 1995
........................................
David Goldfarb
/s/ ROGER S. BERLIND Director October 23, 1995
........................................
Roger S. Berlind
/s/ PHILIP CALDWELL Director October 23, 1995
........................................
Philip Caldwell
/s/ HOWARD L. CLARK, JR. Director October 23, 1995
........................................
Howard L. Clark, Jr.
/s/ SHERMAN R. LEWIS, JR. Director October 23, 1995
........................................
Sherman R. Lewis, Jr.
/s/ MALCOLM WILSON Director October 23, 1995
........................................
Malcolm Wilson
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
FILED HEREWITH(-)
PREVIOUSLY FILED(*)
EXHIBIT OR INCORPORATED BY
NUMBER DESCRIPTION REFERENCE TO
- ------ ----------------------------------------------------- ---------------------------
<C> <S> <C>
1(a) --Form of Underwriting Agreement for Debt Securities
(including Delayed Delivery Contract)............... --
4(a) --Form of Subordinated Indenture between the
Registrant and Continental Bank, National
Association, as Trustee (the "Trustee"), with
respect to the Registrant's Senior Subordinated
Debt Securities.................................... Exhibit 4.3 to Registration
Statement No. 33-28381
filed on April 27, 1989
4(b) --First Supplemental Indenture, dated as of June 21,
1989, between the Registrant and the Trustee with
respect to the Registrant's 9 1/2% Senior
Subordinated Notes Due 1997........................ Exhibit 4(b) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(c) --Second Supplemental Indenture, dated as of October
3, 1990, between the Registrant and the Trustee
with respect to the Registrant's 9 7/8% Senior
Subordinated Notes Due 1993........................ Exhibit 4(c) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(d) --Third Supplemental Indenture dated as of December
2, 1992, between the Registrant and the Trustee
with respect to the Securities..................... Exhibit 4(d) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(e) --Fifth Supplemental Indenture dated as of January
14, 1993, between the Registrant and the Trustee
with respect to the Registrant's Floating Rate
Senior Subordinated Notes Due 1994................. Exhibit 4(f) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(f) --Sixth Supplemental Indenture dated as of May 17,
1993, between the Registrant and the Trustee with
respect to the Registrant's Floating Rate Senior
Subordinated Notes Due 1996........................ Exhibit 4(g) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(g) --Seventh Supplemental Indenture dated as of November
17, 1993, between the Registrant and the Trustee
with respect to the Registrant's 5 3/4% Senior
Subordinated Notes Due 1998........................ Exhibit 4(h) to
Registration Statement No.
33-51837 filed on May 17,
1994
</TABLE>
<PAGE>
<TABLE><CAPTION>
FILED HEREWITH(-)
PREVIOUSLY FILED(*)
EXHIBIT OR INCORPORATED BY
NUMBER DESCRIPTION REFERENCE TO
- ------ ----------------------------------------------------- ---------------------------
<C> <S> <C>
4(h) --Eighth Supplemental Indenture dated as of December
23, 1993, between the Registrant and the Trustee
with respect to the Registrant's Step-Up Senior
Subordinated Notes Due 2003........................ Exhibit 4(i) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(i) --Form of Ninth Supplemental Indenture between the
Registrant and the Trustee with respect to the
Securities......................................... Exhibit 4(j) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(j) --Tenth Supplemental Indenture dated as of August 4,
1994 between the Registrant and the Trustee with
respect to the Registrant's 7 5/8% Senior
Subordinated Notes Due 1998........................ Exhibit 4(k) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(k) --Eleventh Supplemental Indenture dated as of August
25, 1994 between the Registrant and the Trustee
with respect to the Registrant's 7 3/8% Senior
Subordinated Notes due 1997........................ Exhibit 4(l) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(l) --Twelfth Supplemental Indenture dated as of July 14,
1995 between the Registrant and the Trustee with
respect to the Registrant's 7 1/8% Senior
Subordinated Notes due 2002........................ Exhibit 4(m) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(m) --Forms of Subordinated Debt Securities.............. Pages 13 to 21 of Exhibit
4.3 to Registration
Statement No. 33-28381
filed on April 27, 1989
4(n) --Form of Floating Rate Note......................... Exhibit 4(o) to
Registration Statement No.
33-51837 filed on May 17,
1994
4(o) --Senior Indenture dated as of October 23, 1995
between the Registrant and The Bank of New York, as
Trustee (the "Trustee"), with respect to the
Registrant's Senior Securities...................... --
4(p) --Form of Senior Debt Securities..................... --
5 --Opinion and consent of Karen Muller, Esq. .......... --
8 --Opinion of Simpson Thacher & Bartlett re tax
matters.............................................. --
</TABLE>
<PAGE>
<TABLE><CAPTION>
FILED HEREWITH(-)
PREVIOUSLY FILED(*)
EXHIBIT OR INCORPORATED BY
NUMBER DESCRIPTION REFERENCE TO
- ------ ----------------------------------------------------- ---------------------------
<C> <S> <C>
12 --Computation of ratio of earnings to fixed
charges.............................................. Exhibit 12 to the
Registrant's Transition on
Form 10-K for the fiscal
year ended November 30,
1994 and to the
Registrant's Quarterly
Report on Form 10-Q for the
nine months ended August
31, 1995
23(a) --Consent of Karen Muller, Esq. (included in Exhibit
5)................................................... --
23(b) --Consent of Ernst & Young, Independent Auditors..... --
23(c) --Consent of Simpson Thacher & Bartlett (included in
Exhibit 8)........................................... --
24 --Power of Attorney.................................. Included on Page II-4 of
this Registration Statement
25(a) --Form T-1 Statement of Eligibility under Trust
Indenture Act of 1939 of Bank of America, Illinois... --
25(b) --Form T-1 Statement of Eligibility under Trust
Indenture Act of 1939 of The Bank of New York........ --
</TABLE>
Exhibit 1(a)
Debt Securities
LEHMAN BROTHERS INC.
UNDERWRITING AGREEMENT
----------------------
New York, New York
Dated the date set forth
In Schedule I hereto
To the Representative(s)
named in Schedule I
hereto, of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
Lehman Brothers Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you and the other underwriters named in
Schedule II hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), the principal amount of its debt
securities identified in Schedule I hereto (the "Securities") to be issued
under the indenture (the "Indenture") identified in such Schedule I, between
the Company and the trustee (the "Trustee") identified therein. If the firm
or firms listed in Schedule II hereto include only the firm or firms listed
in Schedule I hereto, then the terms "Underwriters" and "Representatives"
shall each be deemed to refer to such firm or firms.
1. Representations and Warranties. The Company represents and
warrants to each Underwriter that:
(a) The Company meets the requirements for the use of Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations promulgated thereunder (the "Rules"), and has
carefully prepared and filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (the file number
of which is set forth in Schedule I hereto), which has become effective,
for the registration of the Securities under the Securities Act. The
registration statement, as amended at the date of this Agreement, meets
the requirements set forth in Rule 415(a)(1)(x) under the Securities Act
and complies in all other material respects with such rule. The Company
proposes to file with the Commission pursuant to Rule 424 under the
Securities Act ("Rule 424") a supplement to the form of prospectus
included in the registration statement relating to the initial offering
of the Securities and the plan of distribution thereof and has
previously advised you of all further
<PAGE>
2
information (financial and other) with respect to the Company to be set
forth therein. The term "Registration Statement" means the registration
statement, as amended at the date of this Agreement, including the
exhibits thereto, financial statements, and all documents incorporated
therein by reference pursuant to Item 12 of Form S-3 (the "Incorporated
Documents"), and such prospectus as then amended, including the
Incorporated Documents, is hereinafter referred to as the "Basic
Prospectus"; and such supplemented form of prospectus, in the form in
which it shall be filed with the Commission pursuant to Rule 424
(including the Basic Prospectus as so supplemented), is hereinafter
called the "Final Prospectus". Any preliminary form of the Basic
Prospectus which has heretofore been filed pursuant to Rule 424 is
hereinafter called the "Interim Prospectus". Any reference herein to
the Registration Statement, the Basic Prospectus, any Interim Prospectus
or the Final Prospectus shall be deemed to refer to and include the
Incorporated Documents which were filed under the Securities Exchange
Act of 1934 (the "Exchange Act"), on or before the date of this
Agreement or the issue date of the Basic Prospectus, any Interim
Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Interim
Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any Incorporated Documents under the Exchange Act
after the date of this Agreement or the issue date of the Basic
Prospectus, any Interim Prospectus or the Final Prospectus, as the case
may be, and deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus is first
filed with the Commission pursuant to Rule 424, when, before the Closing
Date (hereinafter defined), any amendment to the Registration Statement
becomes effective, when, before the Closing Date, any Incorporated
Document is filed with the Commission, when any supplement to the Final
Prospectus is filed with the Commission and at the Closing Date, the
Registration Statement, the Final Prospectus and any such amendment or
supplement will comply in all material respects with the applicable
requirements of the Securities Act and the Rules, and the Incorporated
Documents will comply in all material respects with the requirements of
the Exchange Act or the Securities Act, as applicable, and the rules and
regulations adopted by the Commission thereunder; on the date hereof and
on the Closing Date, the Indenture shall have been qualified under and
will comply in all material respects with the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); on the date it became
effective, the Registration Statement did not, and, on the date that any
post-effective amendment to the Registration Statement becomes
effective, the Registration Statement as amended by such post-effective
amendment did not or will
<PAGE>
3
not, as the case may be, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; on the date the
Final Prospectus is filed with the Commission pursuant to Rule 424 and
on the Closing Date, the Final Prospectus, as it may be amended or
supplemented, will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made,
not misleading; and on said dates, the Incorporated Documents will
comply in all material respects with the applicable provisions of the
Exchange Act and rules and regulations of the Commission thereunder,
and, when read together with the Final Prospectus, or the Final
Prospectus as it may be then amended or supplemented, will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading; provided that the foregoing representations and warranties
in this paragraph (b) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to
the Company by or through the Representatives on behalf of any
Underwriter specifically for use in connection with the preparation of
the Registration Statement or the Final Prospectus, as they may be
amended or supplemented, or to any statements in or omissions from the
statement of eligibility and qualification on Form T-1 of the Trustee
under the Trust Indenture Act ("Form T-1").
(c) The Basic Prospectus and any Interim Prospectus, as of their
respective dates, complied in all material respects with the
requirements of the Securities Act and of the Rules and did not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
Commission has not issued an order preventing or suspending the use of
the Basic Prospectus or any Interim Prospectus.
(d) The nationally recognized firm of independent public
accountants whose report appears in the Company's most recent Annual
Report on Form 10-K, which is incorporated by reference in the Final
Prospectus, are independent public accountants as required by the
Securities Act and the Rules.
(e) In the event that a report of a nationally recognized firm of
independent public accountants regarding historical financial
information with respect to any entity acquired by the Company is
required to be incorporated by
<PAGE>
4
reference in the Final Prospectus, such independent public accountants
were independent public accountants, as required by the Securities Act
and the Rules, during the period of their engagement to examine the
financial statements being reported on and at the date of their report.
(f) The audited consolidated financial statements of the Company
in the Final Prospectus and the Registration Statement present fairly on
a consolidated basis the financial position, the results of operations,
changes in common stock and other stockholder's equity and cash flows of
the Company and its subsidiaries, as of the respective dates and for the
respective periods indicated, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved. The unaudited consolidated financial statements of
the Company, if any, included in the Final Prospectus and the
Registration Statement and the related notes are true, complete and
correct, subject to normally recurring changes resulting from year-end
audit adjustments, and have been prepared in accordance with the
instructions to Form 10-Q.
(g) Except as described in or contemplated by the Registration
Statement and the Final Prospectus, there has not been any material
adverse change in or any adverse development which materially affects
the business, properties, financial condition or results of the Company
or the Company and its subsidiaries taken as whole, from the dates as of
which information is given in the Registration Statement and Final
Prospectus.
(h) The Securities conform to the description thereof contained in
the Final Prospectus, are duly and validly authorized, and, when validly
authenticated, issued and delivered in accordance with the Indenture and
sold to the Underwriters as provided in this Agreement, will be validly
issued and outstanding obligations of the Company entitled to the
benefits of the Indenture.
(i) The Company does not have any subsidiaries having business or
properties that are material to the business and properties of the
Company and its subsidiaries taken as a whole with the possible
exception of Lehman Commercial Paper Inc. (the "Named Subsidiary").
Neither the Company nor the Named Subsidiary is in violation of its
corporate charter or by-laws or in default under any agreement,
indenture or instrument, the effect of which violation or default would
be material to the Company and its subsidiaries taken as a whole. The
execution, delivery and performance of this Agreement will not
constitute a breach of, result in the creation or imposition of any
material lien, charge or encumbrance upon any of the assets of the
Company or any of its subsidiaries pursuant to the terms of, or
constitute a default under, any material agreement, indenture or
<PAGE>
5
instrument, or result in a violation of the corporate charter or by-laws
of the Company or any of its subsidiaries or any order, rule or
regulation of any court or governmental agency having jurisdiction over
the Company, the Named Subsidiary or their property. Except as set
forth in the Final Prospectus or as required by the Securities Act, the
Exchange Act, the Trust Indenture Act and applicable state securities
laws, no consent, authorization or order of, or filing or registration
with, any court or governmental agency is required for the execution,
delivery and performance of this Agreement.
(j) The Company and the Named Subsidiary have been duly organized,
are validly existing and in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and in good standing as foreign corporations and are fully
registered as a broker-dealer, broker, dealer or investment advisor, as
the case may be, in each jurisdiction in which their respective
ownership of property or the conduct of their respective businesses
requires such qualification or registration and in which the failure to
qualify or register would be reasonably likely, individually or in the
aggregate, to have a material adverse effect on the business, condition
or properties of the Company and its subsidiaries taken as a whole.
Each of the Company and its Named Subsidiary holds all material
licenses, permits, and certificates from governmental authorities
necessary for the conduct of its business and owns, or possesses
adequate rights to use, all material rights necessary for the conduct of
such business and has not received any notice of conflict with the
asserted rights of others in respect thereof; and each of the Company
and its Named Subsidiary has the corporate power and authority necessary
to own or hold its properties and to conduct the businesses in which it
is engaged. Except as may be disclosed in the Registration Statement
and the Final Prospectus, all outstanding shares of capital stock of the
Named Subsidiary are owned by the Company, directly or indirectly
through subsidiaries, free and clear of any lien, pledge and encumbrance
or any claim of any third party and are duly authorized, validly issued
and outstanding, fully paid and non-assessable.
(k) Except as described in the Registration Statement and the
Final Prospectus, there is no material litigation or governmental
proceeding pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries which might reasonably be
expected to result in any material adverse change in the business,
properties, financial condition or results of operations of the Company
and its subsidiaries taken as a whole or which is required to be
disclosed in the Registration Statement and the Final Prospectus.
<PAGE>
6
(l) The certificates delivered pursuant to paragraph (f) of
Section 6 hereof and all other documents delivered by the Company or its
representatives in connection with the issuance and sale of the
Securities were on the dates on which they were delivered, or will be on
the dates on which they are to be delivered, in all material respects
true and complete.
2. Sale and Purchase of the Securities. The Company agrees to
sell to each Underwriter, and each Underwriter, on the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein stated, agrees to purchase from the Company,
at the purchase price set forth in Schedule I hereto, the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule II
hereto, except that, if Schedule I hereto provides for the sale of Securities
pursuant to delayed delivery arrangements, the respective principal amounts
of Securities to be purchased by the Underwriters shall be as set forth in
Schedule II hereto, less the respective amounts of Contract Securities
determined as provided below. Securities to be purchased by the Underwriters
are herein sometimes called the "Underwriters' Securities" and Securities to
be purchased pursuant to Delayed Delivery Contracts (as hereinafter defined)
are herein called "Contract Securities". The obligations of the Underwriters
under this Agreement are several and not joint.
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities, or a portion thereof,
from the Company pursuant to delayed delivery contracts ("Delayed Delivery
Contracts"), substantially in the form of Schedule III hereto but with such
changes therein as the Company may authorize or approve, and the Underwriters
will endeavor to make such arrangements. Delayed Delivery Contracts are to
be with institutional investors, including commercial and savings banks,
insurance companies, pension funds and educational and charitable
institutions. The Company will make Delayed Delivery Contracts in all cases
where sales of Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise agree, each
such Delayed Delivery Contract must be for not less than the minimum
principal amount set forth in Schedule I hereto and the total principal
amount of Contract Securities may not exceed the maximum principal amount set
forth in Schedule I hereto. The Underwriters will not have any
responsibility in respect of the validity or performance of Delayed Delivery
Contracts. The principal amount of Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be reduced by an amount
which bears the same proportion to the total principal amount of Contract
Securities as the principal amount of Securities set forth opposite the name
of such Underwriter bears to the total principal amount of Securities set
forth in Schedule II hereto, except to the extent that the Representatives
determine that such reduction shall be otherwise than in such
<PAGE>
7
proportion and so advise the Company in writing; provided, however, that the
total principal amount of Securities to be purchased by all Underwriters
shall be the total principal amount set forth in Schedule II hereto less the
total principal amount of Contract Securities.
3. Delivery and Payment. Delivery by the Company of the
Underwriters' Securities to the Representatives for the respective accounts
of the several Underwriters and payment by the Underwriters therefor by
certified or official bank check or checks payable in, or by wire transfer
of, immediately available (federal) funds to or upon the order of the Company
shall take place at the office, on the date and at the time specified in
Schedule I hereto, which date and time may be postponed by agreement between
the Representatives and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Underwriters' Securities being
herein called the "Closing Date").
Concurrently with the delivery of any payment for Underwriters'
Securities as provided in this Section 3, the Company will deliver to the
Representatives for the respective accounts of the several Underwriters a
check in an amount equal to the fee set forth in Schedule I hereto with
respect to the principal amount of Securities for which Delayed Delivery
Contracts are made.
The Underwriters' Securities will be registered in such names and
in such authorized denominations as the Representatives may request no less
than two full business days in advance of the Closing Date. The Company
agrees to have the Underwriters' Securities available for inspection,
checking and packaging by the Representatives at such place as is designated
by the Representatives, not later than 1:00 p.m., New York City time, on the
business day prior to the Closing Date.
4. Offering by Underwriters. The Company hereby confirms that
the Underwriters and dealers have been authorized to distribute or cause to
be distributed any Interim Prospectus and are authorized to distribute the
Final Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters). The
Representatives agree that, as soon as the Representatives believe the
offering of the Securities has been terminated, the Representatives will so
advise the Company.
5. Agreements. The Company agrees with the several Underwriters
that:
(a) The Company will cause the Final Prospectus to be filed with
the Commission pursuant to Rule 424 not later than 10:00 a.m., New York
City time, on the business day following the date of this Agreement and
will promptly advise the Representatives (A) when the Final Prospectus
<PAGE>
8
shall have been filed with the Commission pursuant to Rule 424, (B) when
any amendment to the Registration Statement relating to the Securities
shall have become effective, (C) of any request by the Commission for
any amendment of the Registration Statement, the Final Prospectus, the
Basic Prospectus or any Interim Prospectus, or for any additional
information, (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
qualification of the Indenture or the institution or threatening of any
proceedings for that purpose and (E) of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. After the date of this
Agreement and prior to the termination of the offering of these
Securities the Company will not file any amendment of the Registration
Statement or amendment or supplement to the Final Prospectus (except an
amendment or supplement to the Final Prospectus that is deemed to be
incorporated by reference in the Final Prospectus pursuant to Item 12 of
Form S-3) without the consent of the Representatives and will use its
best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof. Prior to
receipt of the advice to be given by the Representatives pursuant to
Section 4, the Company will not file any document that would be deemed
to be incorporated by reference in the Final Prospectus pursuant to
Item 12 of Form S-3 without delivering to the Representatives a copy of
the document proposed to be so filed, such delivery to be made at least
twenty-four hours prior to such filing, and the Company will consult
with the Representatives as to any comments which the Representatives
make in a timely manner with respect to the document so delivered.
(b) Subject to the last sentence of the immediately preceding
paragraph, if, at any time when a prospectus relating to the Securities
is required to be delivered under the Securities Act, any event occurs
as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to
amend or supplement the Final Prospectus to comply with the Securities
Act or the Rules, the Company promptly will prepare and file with the
Commission an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance and will
use its best efforts to cause any amendment of the Registration
Statement containing an amended Final Prospectus to be made effective as
soon as possible.
<PAGE>
9
(c) The Company will deliver to the Representatives, without
charge, (i) signed copies of the Registration Statement relating to the
Securities and of any amendments thereto (including all exhibits filed
with, or incorporated by reference in, any such document) and (ii) as
many conformed copies of the Registration Statement and of any
amendments thereto which shall become effective on or before the Closing
Date (excluding exhibits) as the Representatives may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an Underwriter or dealer, the Company will deliver, without
charge to the Representatives and to Underwriters and dealers, at such
office or offices as the Representatives may designate, as many copies
of the Basic Prospectus, any Interim Prospectus and the Final Prospectus
as the Representatives may reasonably request.
(e) The Company will make generally available to its security
holders and to the Representatives as soon as practicable an earnings
statement (which need not be audited) of the Company and its
subsidiaries, covering a period of at least 12 months beginning after
the date the Final Prospectus is filed with the Commission pursuant to
Rule 424, which will satisfy the provisions of Section 11(a) of the
Securities Act.
(f) The Company will furnish such information, execute such
instruments and take such actions as may be required to qualify the
Securities for offering and sale under the laws of such jurisdictions as
the Representatives may designate and will maintain such qualifications
in effect so long as required for the distribution of the Securities;
provided, however, that the Company shall not be required to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general or unlimited service
of process in any jurisdiction where it is not now so subject.
(g) So long as any Securities are outstanding, the Company will
furnish or cause to be furnished to the Representatives copies of all
annual reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission.
(h) If the Company has applied for the listing of the Securities
on the New York Stock Exchange Inc. (the "NYSE"), it will use its best
efforts to cause such listing to be approved as soon as possible.
(i) For a period beginning at the time of execution of this
Agreement and ending on the later of the business day following the
Closing Date or following the date on which
<PAGE>
10
any price restrictions on the sale of the Securities are terminated,
without the prior consent of the Representatives, the Company will not
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company covered by the Registration Statement or any
other registration statement filed under the Securities Act.
(j) The Company will use its best efforts to do and perform all
things to be done and performed hereunder prior to the Closing Date and
to satisfy all conditions precedent to the delivery of the Securities to
be purchased hereunder.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be subject
to the accuracy in all material respects of the representations and
warranties on the part of the Company contained herein as of the date hereof
and the Closing Date, to the accuracy of any material statements made in any
certificates, opinions, affidavits, written statements or letters furnished
to the Representatives or to Simpson Thacher & Bartlett ("Underwriters'
Counsel") pursuant to this Section 6, to the performance by the Company of
its respective obligations hereunder and to the following additional
conditions:
(a) The Final Prospectus shall have been filed with the Commission
pursuant to Rule 424 not later than 10:00 a.m., New York City time, on
the business day following the date of this Agreement or such later date
and time as shall be consented to in writing by the Representatives.
(b) No order suspending the effectiveness of the Registration
Statement, as amended from time to time, or suspending the qualification
of the Indenture, shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Commission and any requests
for additional information on the part of the Commission (to be included
in the Registration Statement or the Final Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the
Representatives.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Final Prospectus, there shall not
have been any change or decrease specified in the letter or letters
referred to in paragraphs (g) or (h) of this Section 6 which, in the
judgment of the Representatives, makes it impracticable or inadvisable
to proceed with the offering and delivery of the Securities as
contemplated by the Registration Statement and the Final Prospectus.
(d) The Company shall have furnished to the Representatives the
opinion of the Deputy General Counsel
<PAGE>
11
for the Company, dated the day of the Closing Date, to the effect that:
(i) The Company has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of
its incorporation with all requisite corporate power and authority
to own and operate its properties and to conduct its business as
described in the Final Prospectus.
(ii) The Securities and the Indenture conform in all material
respects to the descriptions thereof contained in the Final
Prospectus.
(iii) The Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance and other laws relating to or
affecting creditors' rights generally from time to time in effect
and to general principles of equity (whether considered in a
proceeding in equity or at law) and by an implied covenant of good
faith and fair dealing; and the Securities have been duly
authorized, executed, authenticated, issued and delivered and
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture, subject to the effects
of bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance and other laws relating to or affecting creditors'
rights generally from time to time in effect and to general
principles of equity (whether considered in a proceeding in equity
or at law) and by an implied covenant of good faith.
(iv) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of
the transactions contemplated in this Agreement, except for (1)
such consents, approvals, authorizations or orders as have been
obtained under the Securities Act and such as may be required under
the Exchange Act and the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by
the Underwriters, and (2) the qualification of the Indenture under
the Trust Indenture Act, which has been obtained.
(v) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules which
have not been filed as exhibits to the Registration Statement or
<PAGE>
12
incorporated therein by reference as permitted by the Rules.
(vi) To the best of such counsel's knowledge, neither the
Company nor its Named Subsidiary is in violation of its corporate
charter or by-laws, or in default under any material agreement,
indenture or instrument known to such counsel, the effect of which
violation or default would be material to the Company and its
subsidiaries taken as a whole.
(vii) This Agreement and, to the extent applicable, the
Delayed Delivery Contracts have been duly authorized, executed and
delivered by the Company; the execution, delivery and performance
of this Agreement and any Delayed Delivery Contracts by the Company
will not constitute a breach of, or result in the creation or
imposition of any material lien, charge or encumbrance upon any of
the assets of the Company or its Named Subsidiary pursuant to the
terms of, or constitute a default under, any material agreement,
indenture or instrument known to such counsel and to which the
Company or its Named Subsidiary is a party or is bound, or result
in a violation of the corporate charter or by-laws of the Company
or its Named Subsidiary or any order, rule or regulation known to
such counsel of any court or governmental agency having
jurisdiction over the Company, its Named Subsidiary or any of their
respective properties, the effect of which would be material to the
Company and its subsidiaries taken as a whole.
(viii) The Registration Statement has become effective under
the Securities Act, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose is pending or threatened by the Commission.
(ix) The Registration Statement, the Final Prospectus and
each amendment thereof or supplement thereto (except that no
opinion need be expressed as to the financial statements or other
financial or statistical data or the Form T-1 of the Trustee under
the Trust Indenture Act included or incorporated by reference
therein) comply as to form in all material respects with the
requirements of the Securities Act and the Rules.
(x) If the Securities are to be listed on the NYSE,
authorization therefor has been given, subject to official notice
of issuance and evidence of satisfactory distribution, or the
Company has filed a preliminary listing application and all
required
<PAGE>
13
supporting documents with respect to the Securities with the NYSE,
and such counsel has no reason to believe that the Securities will
not be authorized for listing, subject to official notice of
issuance and evidence of satisfactory distribution.
(xi) The Named Subsidiary is a duly organized and validly
existing corporation in good standing under the laws of the
jurisdiction of its incorporation with all requisite corporate
power and authority to own and operate its properties and to
conduct its business as described in the Final Prospectus. Each of
the Company and its Named Subsidiary is duly qualified to do
business as a foreign corporation, is in good standing and is duly
registered as a broker-dealer, broker, dealer or investment
advisor, as the case may be, in each jurisdiction in which the
nature of the business conducted by it or in which the ownership or
holding by lease of the properties owned or held by it require such
qualification or registration and where the failure to so qualify
or register would have a material adverse effect on the Company and
its subsidiaries taken as a whole.
(xii) All the outstanding shares of capital stock of the
Company's Named Subsidiary have been duly and validly authorized
and issued and are fully paid and non-assessable and, except for
directors' qualifying shares, are owned by the Company or a
subsidiary of the Company free and clear of any claims, liens,
encumbrances and security interests.
(xiii) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company
or any of its subsidiaries which would affect the subject matter of
this Agreement or is required to be disclosed in the Final
Prospectus which is not disclosed and correctly summarized therein.
Such opinion shall also contain a statement that although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Final Prospectus (except as to those matters
stated in paragraph (ii) of such opinion), such counsel has no reason to
believe that (i) the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading or (ii) the Final Prospectus contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that no
opinion need be
<PAGE>
14
expressed as to the financial statements or other financial or statistical
data or the Form T-1 included or incorporated by reference therein).
In rendering such opinion, such counsel may rely upon opinions of
local counsel satisfactory to the Representatives for matters not governed by
New York law and may rely as to matters of fact, to the extent such counsel
deems proper, upon certificates or affidavits of officers of the Company, the
Trustee and public officials. Such counsel may rely on a certificate of the
Trustee with respect to the execution of the Securities by the Company and
the authentication thereof by the Trustee.
(e) The Representatives shall have received from Underwriters'
Counsel such opinion or opinions, dated the day of the Closing Date, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Final Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of its Chief Executive Officer, its President or any Managing
Director or Executive Vice President and its Chief Financial Officer or its
Treasurer, dated the day of the Closing Date, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.
(ii) To the best of their knowledge after due inquiry, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or threatened.
(iii) In their opinion, (x) the Registration Statement does
not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading, (y) the Final
Prospectus does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and
(z) since the effective date of the Registration Statement
<PAGE>
15
there has not occurred any event required to be set forth in an
amended or supplemented prospectus which has not been so set forth.
(g) At the time this Agreement is executed, a nationally
recognized firm of independent public accountants shall have furnished to
the Representatives a letter, dated the date of this Agreement, in form and
substance satisfactory to the Representatives, confirming that they are
independent auditors with respect to the Company within the meaning of the
Securities Act and the Rules and stating in effect that:
(i) In their opinion, the consolidated financial statements
of the Company and its subsidiaries, and the supporting schedules,
included in the Registration Statement and the Final Prospectus and
audited by them comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
Exchange Act and the related published rules and regulations
thereunder.
(ii) On the basis of a reading of the unaudited consolidated
financial statements of the Company and its subsidiaries, if any,
included in the Registration Statement and the Final Prospectus,
carrying out certain specified procedures (but not an audit in
accordance with generally accepted auditing standards), a reading
of the minutes of the meetings of the directors of the Company and
inquiries of certain officials of the Company and its subsidiaries
who have responsibility for financial and accounting matters of the
Company and its subsidiaries, as to transactions and events
subsequent to the date of the most recent audited consolidated
financial statements included in the Registration Statement and the
Final Prospectus, nothing came to their attention that caused them
to believe that any material modifications should be made to the
unaudited consolidated financial statements of the Company and its
subsidiaries, if any, included in the Registration Statement and
the Final Prospectus for them to be in conformity with generally
accepted accounting principles; and such financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published rules and regulations.
(iii) If pro forma financial statements are included in the
Registration Statement or the Final Prospectus, (x) they have read
such pro forma financial statements, (y) they have made inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters of the Company as to the basis for
their determination of the pro forma adjustments and whether such
pro forma financial
<PAGE>
16
statements comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X
and (z) they have proved the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts; and as a
result thereof, nothing came to their attention that caused them to
believe that such pro forma financial statements do not so comply
with Rule 11-02 of Regulation S-X and that such pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
(iv) They have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is expressed in
dollars, or percentages derived from dollar amounts, and has been
obtained from the general accounting records of the Company) set
forth in the Registration Statement, as amended, and the Final
Prospectus, as amended or supplemented, and in Exhibit 12 to the
Registration Statement, including specified information, if any,
included or incorporated from the Company's Annual Report on Form
10-K incorporated therein or specified information, if any,
included or incorporated from any of the Company's Quarterly
Reports on Form 10-Q or its Current Reports on Form 8-K
incorporated therein, agrees with the accounting records of the
Company and its subsidiaries or computations made therefrom,
excluding any questions of legal interpretation.
The letter required by this paragraph (g) may refer to a prior
letter of such nationally recognized firm of independent public accountants,
addressed to the Company, covering the above items (a "Prior Letter"). For
the purposes of the letter required by this paragraph (g), such nationally
recognized firm of independent public accountants need not perform any
procedures subsequent to the date of the Prior Letter.
(h) At the Closing Date, the nationally recognized firm of
independent public accountants referred to in paragraph (g) of this Section 6
shall have furnished to the Representatives a letter, dated the day of the
Closing Date, in form and substance satisfactory to the Representatives,
which reconfirms the matters set forth in their letter delivered pursuant to
paragraph (g) of this Section 6 and states in effect that:
(i) In their opinion, any consolidated financial statements
of the Company and its subsidiaries, and the supporting schedules,
included in the Registration Statement and the Final Prospectus and
audited by them and not covered by their letter delivered pursuant
to paragraph (g) of this Section 6 comply as to form in all
material respects with the applicable accounting
<PAGE>
17
requirements of the Securities Act and the Exchange Act and the
related published rules and regulations thereunder.
(ii) On the basis of a reading of the unaudited consolidated
financial statements of the Company and its subsidiaries, if any,
included in the Registration Statement and the Final Prospectus and
of the latest unaudited consolidated financial statements made
available by the Company, carrying out certain specified procedures
(but not an audit in accordance with generally accepted auditing
standards), a reading of the minutes of the meetings of the
directors of the Company, and inquiries of certain officials of the
Company and its subsidiaries, who have responsibility for financial
and accounting matters of the Company and its subsidiaries, as to
transactions and events subsequent to the date of the most recent
audited consolidated financial statements included in the
Registration Statement and the Final Prospectus, nothing came to
their attention that caused them to believe that:
(A) any material modifications should be made to the
unaudited consolidated financial statements of the Company and
its subsidiaries, if any, included in the Registration
Statement and the Final Prospectus and not covered by their
letter delivered pursuant to paragraph (g) of this Section 6,
for them to be in conformity with generally accepted
accounting principles; and such financial statements do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the
published instructions, rules and regulations thereunder.
(B) the unaudited capsule information of the Company and
its subsidiaries, if any, included in the Registration
Statement and the Final Prospectus does not agree with the
amounts set forth in the unaudited consolidated financial
statements of the Company from which it was derived or was not
determined on a basis substantially consistent with that of
the corresponding financial information in the latest audited
financial statements of the Company included in the
Registration Statement and the Final Prospectus.
(C)(I) as of the latest date as of which the Company and
its subsidiaries have monthly financial statements, there was
any change in the capital stock or additional paid-in capital,
or
<PAGE>
18
increase in long-term indebtedness of the Company and its
subsidiaries, or any decrease in retained earnings, as
compared with the amounts shown in the most recent
consolidated statement of financial condition of the Company
and its subsidiaries included in the Registration Statement
and the Final Prospectus, (II) with respect to the period
subsequent to the date of the most recent financial statements
included in the Registration Statement and the Final
Prospectus and extending through the latest date as of which
the Company and its subsidiaries have monthly financial
statements, there was a consolidated net loss or (III) with
respect to the amounts of net capital or excess net capital of
the Company determined pursuant to Commission Rule 15c3-1 and
shown in the most recent financial statement of the Company
filed pursuant to Commission Rule 17a-5, there has been any
decrease in such amounts as compared with the amounts shown in
the most recent consolidated financial statements included in
the Registration Statement and the Final Prospectus;
(D) as of a specified date not more than five business
days prior to the date of the letter, (I) there was any change
in the capital stock or additional paid-in capital, or
increase in long-term indebtedness of the Company and its
subsidiaries as compared with the amounts shown in the most
recent consolidated statement of financial condition of the
Company and its subsidiaries included in the Registration
Statement and the Final Prospectus or (II) there was any
decrease in the estimated amounts of net capital or excess net
capital of the Company determined pursuant to Commission Rule
15c3-1, as compared with the amounts shown on the most recent
financial statement of the Company filed pursuant to
Commission Rule 17a-5, such that the Company did not satisfy
the requirements of Section 5 of Schedule E to Article III of
the By-Laws of the National Association of Securities Dealers,
Inc., which permit releases of proceeds from escrow;
except in all instances for increases or decreases set forth in
such letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof, unless
said explanation is not deemed necessary by the Representatives.
(iii) If pro forma financial statements are included in the
Registration Statement or the Final Prospectus and are not covered
by their letter
<PAGE>
19
delivered pursuant to paragraph (g) of this Section 6, (x) they
have read such pro forma financial statements, (y) they have made
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company
as to the basis for their determination of the pro forma
adjustments and whether such pro forma financial statements comply
as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X and (z) they have
proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts; and as a result thereof,
nothing came to their attention that caused them to believe that
such pro forma financial statements do not so comply with Rule 11-
02 of Regulation S-X and that such pro forma adjustments have not
been properly applied to the historical amounts in the compilation
of those statements.
(iv) To the extent not covered by their letter delivered
pursuant to paragraph (g) of this Section 6, they have performed
certain other specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature (which is expressed in dollars, or percentages
derived from dollar amounts, and has been obtained from the general
accounting records of the Company) set forth in the Registration
Statement, as amended, and the Final Prospectus, as amended or
supplemented, and in Exhibit 12 to the Registration Statement,
including specified information, if any, included or incorporated
from the Company's Annual Report on Form 10-K incorporated therein
or specified information, if any, included or incorporated from any
of the Company's Quarterly Reports on Form 10-Q or its Current
Reports on Form 8-K incorporated therein, agrees with the
accounting records of the Company and its subsidiaries or
computations made therefrom, excluding any questions of legal
interpretation.
(i) So long as historical financial information with respect to
any entity acquired by the Company is required to be included in the
Registration Statement or the Final Prospectus, at the Closing Date, a
nationally recognized firm of independent public accountants shall have
furnished to the Representatives a letter, dated the day of the Closing Date,
in form and substance satisfactory to the Representatives, confirming that
they are, or were as of a stated time, independent public accountants within
the meaning of the Securities Act and the Rules and stating in effect that:
(i) in their opinion the audited consolidated financial
statements of such entity acquired by the Company, and the
supporting schedules, included in the
<PAGE>
20
Registration Statement and Final Prospectus and examined by them,
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published rules and regulations of the Commission thereunder; and
(ii) they have performed certain other specified procedures
as a result of which they determined that certain historical
financial information relating to such entity acquired by the
Company as required to be reported pursuant to rules and
regulations promulgated under the Exchange Act agree with the
accounting records of such entity acquired by the Company or
computations made therefrom, excluding any questions of legal
interpretation.
(j) Subsequent to the execution of this Agreement, there shall not
have been any decrease in the ratings of any of the Company's debt securities
by Moody's Investors Service, Inc. or Standard & Poor's Corporation.
(k) The Company shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the Underwriters have
been approved by the Company.
(l) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives or Underwriters' Counsel may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates or opinions furnished to the Representatives or Underwriters'
Counsel pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and to
Underwriters' Counsel, this Agreement and all obligations of the Underwriters
hereunder may be cancelled at, or at any time prior to, the Closing Date by
the Representatives. Notice of such cancellation shall be given to the
Company in writing, or by telegraph confirmed in writing.
7. Expenses. (a) Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
will pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including, without limiting the
generality of the foregoing, all costs, taxes and expenses incident to the
issuance, sale and delivery of the Securities to the Underwriters, all fees
and expenses of the Company's counsel and accountants, all costs and expenses
incident to the preparing, printing and filing of the Registration Statement
(including all exhibits thereto), any Interim Prospectus, the Basic
Prospectus, the Final Prospectus and any amendments thereof or supplements
<PAGE>
21
thereto and the Indenture, and the rating of the Securities by one or more
rating agencies, all costs and expenses (including fees of Underwriters'
Counsel and their disbursements) incurred in connection with blue sky
qualifications, advising on the legality of the Securities for investment,
the filing requirements, if any, of the National Association of Securities
Dealers, Inc. in connection with its review of corporate financings, the fee
for listing the Securities on the NYSE, the fees and expenses of the Trustee
and all costs and expenses of the printing and distribution of all documents
in connection with such offering. Except as provided in this Section 7, the
Company will have no responsibility to the Underwriters for the Underwriters'
own costs and expenses, including the fees of Underwriters' Counsel and any
advertising expenses in connection with any offer the Underwriters may make.
(b) If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 6 hereof is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement
herein or comply with any provision hereof, the Company will, subject to
demand by the Representatives, reimburse the Underwriters for all out-of-
pocket expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Securities.
8. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person who controls such Underwriter
within the meaning of the Securities Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or in any amendment thereof, or in any Interim Prospectus,
the Basic Prospectus or the Final Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i)
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company as herein stated by the Representatives on behalf of
any Underwriter specifically for use
<PAGE>
22
in connection with the preparation thereof, and (ii) such indemnity with
respect to the Basic Prospectus or any Interim Prospectus shall not inure to
the benefit of any Underwriter (or any person controlling such Underwriter)
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if such person did not
receive a copy of the Final Prospectus at or prior to the confirmation of the
sale of such Securities to such person in any case where such delivery is
required by the Securities Act and the untrue statement or omission of a
material fact contained in the Basic Prospectus or any Interim Prospectus was
corrected in the Final Prospectus, unless such failure to deliver the Final
Prospectus was a result of noncompliance by the Company with Section 5(d)
hereof. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person, if any, who controls the Company
within the meaning of the Securities Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Basic Prospectus, any Interim Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that the same
was made therein in reliance upon and in conformity with written information
furnished to the Company as herein stated by the Representatives on behalf of
such Underwriter specifically for use in the preparation thereof, and agrees
to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have.
The statements set forth in the last paragraph of the cover page and under
the heading "Underwriting" in the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters
for inclusion in the Registration Statement and the Final Prospectus, as the
case may be, and you, as the Representatives, confirm that such statements
are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8,
<PAGE>
23
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and either (i) the
indemnifying party or parties and the indemnified party or parties mutually
agree or (ii) representation of both the indemnifying party or parties and
the indemnified party or parties by the same counsel is inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed counsel in connection with the
assumption of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
approved by the Representatives in the case of subparagraph (a) representing
the indemnified parties under subparagraph (a), as the case may be, who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subparagraph (a)
of this Section 8 is due in accordance with its terms but is for any reason
held by a court to be unavailable from the Company on grounds of policy or
other similar grounds, the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and one or more of the Underwriters may
be subject in such proportion so that the Underwriters are
<PAGE>
24
responsible for that portion represented by the percentage that the
underwriting discounts appearing on the cover page of the Final Prospectus
bear to the public offering prices appearing thereon and the Company is
responsible for the balance; provided, however, that (i) in no case shall any
Underwriter (except as may be provided in any agreement among underwriters)
be responsible for any amount in excess of the underwriting discounts
applicable to the Securities purchased by such Underwriter hereunder and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an Underwriter within
the meaning of the Securities Act shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company,
subject in each case to clauses (i) and (ii) of this subparagraph (d). Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or
parties under this subparagraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise
than under this subparagraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for all of the Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions
which the principal amount of Securities set forth opposite their names in
Schedule II hereto bear to the aggregate principal amount of Securities set
opposite the names of the remaining Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate principal amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of the
Securities, the remaining Underwriters shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Securities, and
if such non-defaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any non-defaulting Underwriters
or the Company. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Representatives shall determine in order that
<PAGE>
25
the required changes in the Registration Statement and the Final Prospectus
or in any other documents or arrangements may be effected. Nothing herein
contained shall relieve any defaulting Underwriter of its liability, if any,
to the Company and any non-defaulting Underwriter for damages occasioned by
its default hereunder.
10. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, by notice given to the
Company at or prior to delivery of and payment for all the Securities, if,
prior to such time (i) trading in securities generally on the NYSE or the
over-the-counter market shall have been suspended or limited or minimum
prices shall have been established on the NYSE or the over-the-counter
market, (ii) a banking moratorium shall have been declared either by federal
or New York State authorities, (iii) any new restriction materially affecting
the distribution of the Securities shall have become effective; trading in
any securities of the Company shall have been suspended or halted by any
national securities exchange, the National Association of Securities Dealers,
Inc. or the Commission, (iv) the United States becomes engaged in hostilities
or there is an escalation in hostilities involving the United States or there
is a declaration of a national emergency or war by the United States, or (v)
there shall have been such a material adverse change in national or
international political, financial or economic conditions, national or
international equity markets or currency exchange rates or controls as to
make it, in the judgment of the Representatives, inadvisable or impracticable
to proceed with the payment for and delivery of the Securities.
11. Representations and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers (as such officers) and of the
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of its officers or directors or any
controlling person within the meaning of the Securities Act, and will survive
delivery of the payment for the Securities.
12. Notices. All communications hereunder will be in writing,
and, if sent to the Representatives will be mailed, delivered, telegraphed or
telexed and confirmed to them, at the address specified in Schedule I hereto;
or, if sent to the Company will be mailed, delivered, telegraphed or telexed
and confirmed to it at 3 World Financial Center, New York, New York 10285,
Attention: Chief Financial Officer.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their successors and, to the extent
and only to the extent stated in Section 8 hereof, the officers and
directors and controlling
<PAGE>
26
persons referred to in Section 8 hereof, and except as provided in Section 8
hereof, no person other than the parties hereto and their respective
successors will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
LEHMAN BROTHERS INC.
By
------------------------------------
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
LEHMAN BROTHERS INC.
By
---------------------------
Title:
Acting on behalf of the Representatives named
in Schedule I annexed hereto and the several
Underwriters named in Schedule II annexed hereto.
<PAGE>
SCHEDULE I
Date of Underwriting Agreement: , 1995
Registration Statement No. 33-
Representative(s) and Address(es): Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Indenture, Title, Purchase Price and Description of Securities:
Indenture:
Title:
Principal amount:
Price to public:
Purchase price:
Interest rate:
Time of payment of
interest:
Maturity:
Sinking fund
provisions:
Redemption
provisions:
Closing Date, Time and Location:
Date: , 1995
Time: A.M., New York City time
Location: Lehman Brothers Inc.
th floor
Three World Financial Center
New York, New York 10285
Delayed Delivery
Arrangements: None
<PAGE>
SCHEDULE II
Principal
Amount of
Securities
to be
Underwriters Purchased
------------ -----------
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . $
<PAGE>
SCHEDULE III
Delayed Delivery Contract
, 19
[Insert name and address of lead Representative]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Lehman Brothers Inc.
(the "Company"), and the Company agrees to sell to the undersigned, on
, 19 (the "Delivery Date"), $ principal amount of the Company's
% due (the "Securities") offered by the Company's
Prospectus dated , 19 , and related Prospectus Supplement dated
, 19 , receipt of a copy of which is hereby acknowledged, at a
purchase price of % of the principal amount thereof, plus accrued
interest or amortization of original issue discount, if any, thereon from
, 19 , to the date of payment and delivery, and on the further
terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be
made on or before 11:00 a.m., New York City time, on the Delivery Date to
or upon the order of the Company in New York Clearing House (next day)
funds, at your office or at such other place as shall be agreed between the
Company and the undersigned upon delivery to the undersigned of the
Securities in definitive fully registered form and in such authorized
denominations and registered in such names as the undersigned may request
by written or telegraphic communication addressed to the Company not less
than five full business days prior to the Delivery Date. If no request is
received, the Securities will be registered in the name of the undersigned
and issued in a denomination equal to the aggregate principal amount of
Securities to be purchased by the undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date, and the obligation of the Company to
sell and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the
failure thereof) that (1) the purchase of Securities to be made by the
undersigned, which purchase the undersigned represents is not prohibited on
the date hereof, shall not on the Delivery Date be prohibited under the
laws of the jurisdiction to which the undersigned is subject, and (2) the
Company, on or before the Delivery Date, shall have sold to certain
underwriters (the "Underwriters") such principal amount of the Securities
as is to be sold to them pursuant to the Underwriting Agreement referred to
in the Prospectus and Prospectus Supplement mentioned above. Promptly
after completion of such sale to the Underwriters, the Company will mail or
deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith. The obligation of
the undersigned to take delivery of and make payment for the Securities,
and the obligation of the Company to cause the Securities to be sold and
<PAGE>
2
delivered, shall not be affected by the failure of any purchaser to take
delivery of and make payment for the Securities pursuant to other contracts
similar to this contract.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this
contract is acceptable to the Company, it is required that the Company sign
the form of acceptance below and mail or deliver one of the counterparts
hereof to the undersigned at its address set forth below. This will become
a binding contract between the Company and the undersigned, as of the date
first above written, when such counterpart is so mailed or delivered.
This agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
___________________________________
(Name of Purchaser)
By_________________________________
(Signature and Title of Officer)
_________________________________
(Address)
Accepted:
Lehman Brothers Inc.
By___________________________________
(Authorized Signature)
Exhibit 4(o)
================================================================================
LEHMAN BROTHERS INC.
AND
THE BANK OF NEW YORK,
Trustee
----------------------------
Indenture
Dated as of October 23, 1995
----------------------------
================================================================================
<PAGE>
THIS INDENTURE, dated as of October 23, 1995, between LEHMAN BROTHERS INC.,
a corporation duly organized and existing under the laws of the State of
Delaware (the "Company"), and THE BANK OF NEW YORK, a New York banking
corporation (the "Trustee"),
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured notes
or other evidences of indebtedness to be issued in one or more series (the
"Securities"), as in this Indenture provided, up to such principal amount or
amounts as may from time to time be authorized in or pursuant to one or more
resolutions of the Board of Directors; and
WHEREAS, all acts and things necessary to make this Indenture a valid
agreement of the Company according to its terms have been done and performed,
and the execution and delivery of this Indenture have in all respects been duly
authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Securities
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises, of the purchase and acceptance of the Securities by the Holders
thereof and of the sum of one dollar duly paid to it by the Trustee at the
execution and delivery of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective Holders from time to time of the
Securities or of any series thereof, as follows:
PARAGRAPH A. Incorporation by Reference.
Articles One through Thirteen of the Lehman Brothers Inc. Standard
Multiple-Series Indenture Provisions dated and filed with the Securities and
Exchange Commission (the "Commission") on October 23, 1995 (the "Standard
Provisions") are hereby incorporated herein by reference with the same force and
effect as though fully set out herein.
PARAGRAPH B. Additional Provisions.
Each of the following provisions, which constitutes part of this Indenture,
is numbered to conform with the format of the Standard Provisions:
<PAGE>
2
SECTION 116. 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 and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 615. Other Matters Concerning Trustee.
The Corporate Trust Office of the Trustee at the date of this Indenture is
located at 101 Barclay Street, Floor 21 West, New York, New York, 10286.
A Responsible Officer means a Vice President, Assistant Vice President,
Assistant Treasurer or any other trust officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers.
SECTION 705. Delivery of Reports by Trustee.
The reports to be transmitted by the Trustee pursuant to the provisions of
Section 703 hereof shall be required to be transmitted on or before July 15,
1995, and on or before July 15 in every year thereafter, so long as any
Securities are outstanding hereunder.
------------------------
The Bank of New York hereby accepts the trusts in this Indenture declared
and provided, upon the terms and conditions hereinabove set forth.
<PAGE>
3
IN WITNESS WHEREOF, Lehman Brothers Inc. has caused this Indenture to be
signed and acknowledged by its President, its Chairman of the Board, one of its
Vice Presidents, its Chief Financial Officer or its Treasurer, and its corporate
seal to be affixed hereunto, and the same to be attested by its Secretary, its
Assistant Secretary or one of its Attesting Secretaries, and The Bank of New
York has caused this Indenture to be signed and acknowledged by one of its
Assistant Vice Presidents, and its corporate seal to be affixed hereunto, and
the same to be attested by one of its Assistant Treasurers, as of the day and
year first written above.
[CORPORATE SEAL] LEHMAN BROTHERS INC.
By /s/ Michael R. Milversted
--------------------------
Treasurer
/s/ Suzanne Conticelli
- -------------------------
Assistant Secretary
[CORPORATE SEAL] THE BANK OF NEW YORK,
as Trustee
Attest: By /s/ Stephen Giurlando
----------------------------
Title: Assistant Vice President
/s/ Byron Merino
- --------------------------
Title: Assistant Treasurer
<PAGE>
4
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23th day of October, 1995, before me personally came Michael R.,
Milversted, to me known, who, being by me duly sworn, did depose and say that he
is Treasurer of LEHMAN BROTHERS INC., one of the corporations described in and
which executed the foregoing instrument; that he knows the corporate seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
Felicity Fridman
-------------------
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23th day of October, 1995, before me personally came Stephen
Giurlando, to me known, who, being by me duly sworn, did depose and say
that he is an Assistant Vice President of THE BANK OF NEW YORK, one of the
corporations described in and which executed the foregoing instrument; that he
knows the corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
Timothy Shea
---------------
[Notarial Seal]
<PAGE>
================================================================================
LEHMAN BROTHERS INC.
STANDARD MULTIPLE-SERIES
INDENTURE PROVISIONS
Dated, and Filed with the Securities and Exchange Commission
on, October 23, 1995
================================================================================
<PAGE>
CROSS REFERENCE SHEET***
between
the provisions of Sections 310 through 318(a) of the Trust Indenture Act of
1939, as amended, and the Lehman Brothers Inc. Standard Multiple-Series
Indenture Provisions:
<TABLE><CAPTION>
Section of Standard
Multiple-Series
Section of Act Indenture Provisions
-------------- --------------------
<S> <C>
Sec. 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
610
Sec. 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613(b)
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)(2)
703(b)
Sec. 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Sec. 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(c)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(d)
Sec. 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Sec. 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
703(a)(6)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)(1)
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(2)
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(3)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Sec. 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
502
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Sec. 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Sec. 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
- --------------------------------
* This cross reference sheet is not part of the Standard Multiple-Series
Indenture Provisions.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
"Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Additional Amounts" . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Affected Security" . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Authenticating Agent" . . . . . . . . . . . . . . . . . . . . . . . . 2
"Authorized Newspaper" . . . . . . . . . . . . . . . . . . . . . . . . 2
"Bearer Security" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Board of Directors" . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Board Resolution" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Cedel" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Commission" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Company Request" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Company Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Component Currency" . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Consolidated Net Worth" . . . . . . . . . . . . . . . . . . . . . . . 3
"Conversion Event" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Corporate Trust Office" . . . . . . . . . . . . . . . . . . . . . . . 3
"corporation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"coupon" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Currency Determination Agent" . . . . . . . . . . . . . . . . . . . . 3
"Defaulted Interest" . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Depositary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Designated Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . 4
"Determination Notice" . . . . . . . . . . . . . . . . . . . . . . . . 4
"Dollars" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"$" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Dual Currency Security" . . . . . . . . . . . . . . . . . . . . . . . 4
"ECU" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Election Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Euroclear" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"European Communities" . . . . . . . . . . . . . . . . . . . . . . . . 4
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Exchange Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Floating Rate Security" . . . . . . . . . . . . . . . . . . . . . . . 5
"Foreign Currency" . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Global Exchange Agent" . . . . . . . . . . . . . . . . . . . . . . . 5
"Government Obligations" . . . . . . . . . . . . . . . . . . . . . . . 5
"Holder" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
i
<PAGE>
Page
----
"Indenture" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Indexed Security" . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Interest Payment Date" . . . . . . . . . . . . . . . . . . . . . . . 6
"LIBOR" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"LIBOR Security" . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"London Banking Day" . . . . . . . . . . . . . . . . . . . . . . . . . 6
"mandatory sinking fund payment" . . . . . . . . . . . . . . . . . . . 6
"Market Exchange Rate" . . . . . . . . . . . . . . . . . . . . . . . . 6
"Maturity" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Officers' Certificate" . . . . . . . . . . . . . . . . . . . . . . . 6
"Opinion of Counsel" . . . . . . . . . . . . . . . . . . . . . . . . . 6
"optional sinking fund payment" . . . . . . . . . . . . . . . . . . . 6
"Original Issue Discount Security" . . . . . . . . . . . . . . . . . . 6
"Outstanding" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Overdue Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Place of Payment" . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Predecessor Security" . . . . . . . . . . . . . . . . . . . . . . . . 8
"Redemption Date" . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Redemption Price" . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Registered Holder" . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Registered Security" . . . . . . . . . . . . . . . . . . . . . . . . 9
"Regular Record Date" . . . . . . . . . . . . . . . . . . . . . . . . 9
"Responsible Officer" . . . . . . . . . . . . . . . . . . . . . . . . 9
"Restricted Period" . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Security Register" . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Security Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Special Record Date" . . . . . . . . . . . . . . . . . . . . . . . . 9
"Stated Maturity" . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Stock Exchange" . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Trust Indenture Act" . . . . . . . . . . . . . . . . . . . . . . . . 10
"United States" . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
"United States Alien" . . . . . . . . . . . . . . . . . . . . . . . . 10
"Vice President" . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . 10
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . 11
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . 11
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . . . 13
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . 13
SECTION 107. Language of Notices, Etc. . . . . . . . . . . . . . . . 14
SECTION 108. Conflict with Trust Indenture Act . . . . . . . . . . . 14
ii
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SECTION 109. Effect of Headings and Table of Contents . . . . . . . 14
SECTION 110. Successors and Assigns . . . . . . . . . . . . . . . . 15
SECTION 111. Separability Clause . . . . . . . . . . . . . . . . . . 15
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . 15
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . 15
SECTION 114. Execution In Counterparts . . . . . . . . . . . . . . . 15
SECTION 115. Immunity of Incorporators, Stockholders, Officers and
Directors . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 116. Certain Matters Relating to Currencies . . . . . . . . 16
SECTION 117. Calculation of Principal Amount . . . . . . . . . . . . 16
ARTICLE TWO
SECURITY FORMS . . . . . . . . . . . . . . 17
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . 17
SECTION 202. Form of Trustee's Certificate of Authentication . . . . 18
SECTION 203. Securities in Global Form . . . . . . . . . . . . . . . 18
ARTICLE THREE
THE SECURITIES . . . . . . . . . . . . . . 18
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . 18
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . 23
SECTION 303. Execution, Authentication, Delivery and Dating . . . . 23
SECTION 304. Temporary Securities; Exchange of Temporary Global
Securities and Permanent Global Securities in Bearer
Form . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 305. Registration, Registration of Transfer and Exchange . . 30
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . 34
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . 35
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . 37
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . 38
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . 38
SECTION 311. Currency and Manner of Payments in Respect of
Registered Securities. . . . . . . . . . . . . . . . . 38
SECTION 312. Appointment and Resignation of Successor
Currency Determination Agent . . . . . . . . . . . . 41
SECTION 313. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . 42
iii
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ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . 42
SECTION 401. Satisfaction and Discharge of Securities of any Series 42
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . 46
SECTION 403. Satisfaction and Discharge of Indenture . . . . . . . . 46
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . 47
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . 47
SECTION 502. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . 50
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . 51
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or coupons . . . . . . . . . . . . . . . . . 52
SECTION 506. Application of Money Collected . . . . . . . . . . . . 52
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . 53
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . 54
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . 54
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . 54
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . 54
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . 55
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . 55
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . 56
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . 56
SECTION 516. Judgment Currency . . . . . . . . . . . . . . . . . . . 56
ARTICLE SIX
THE TRUSTEE . . . . . . . . . . . . . . 57
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . 57
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . 58
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . 59
SECTION 604. Not Responsible for Recitals or Issuance of Securities 60
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . 61
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . 61
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . 61
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . 62
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . 62
iv
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SECTION 610. Resignation and Removal; Appointment of Successor . . . 63
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . 64
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 613. Preferential Collection of Claims Against Company . . . 66
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . 71
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . 73
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 702. Preservation of Information; Communications to Holders 73
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . 75
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . 76
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE . . . . 77
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms . 77
SECTION 802. Successor Corporation Substituted . . . . . . . . . . . 79
SECTION 803. Opinion of Counsel to be Given Trustee . . . . . . . . 79
ARTICLE NINE
SUPPLEMENTAL INDENTURES . . . . . . . . . . . 79
SECTION 901. Supplemental Indentures Without Consent of Holders . . 79
SECTION 902. Supplemental Indentures with Consent of Holders . . . . 81
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . 83
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . 83
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . 83
SECTION 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . 83
SECTION 907. Notice of Supplemental Indenture . . . . . . . . . . . 84
ARTICLE TEN
COVENANTS . . . . . . . . . . . . . . . 84
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . 84
v
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SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . 84
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . 86
SECTION 1004. Corporate Existence . . . . . . . . . . . . . . . . . . 88
SECTION 1005. Limitation on Liens on Common Stock of Designated
Subsidiaries . . . . . . . . . . . . . . . . . . . . . 88
SECTION 1006. Statement by Officers as to Default . . . . . . . . . . 88
SECTION 1007. Waiver of Certain Covenants . . . . . . . . . . . . . . 89
SECTION 1008. Payment of Additional Amounts . . . . . . . . . . . . . 89
SECTION 1009. Defeasance of Certain Obligations . . . . . . . . . . . 91
SECTION 1010. Calculation of Original Issue Discount. . . . . . . . . 94
ARTICLE ELEVEN
REDEMPTION OF SECURITIES . . . . . . . . . . . 94
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . 94
SECTION 1102. Tax Redemption; Special Tax Redemption . . . . . . . . 94
SECTION 1103. Election to Redeem; Notice to Trustee . . . . . . . . . 97
SECTION 1104. Selection by Trustee of Securities to Be Redeemed . . . 97
SECTION 1105. Notice of Redemption . . . . . . . . . . . . . . . . . 98
SECTION 1106. Deposit of Redemption Price . . . . . . . . . . . . . . 99
SECTION 1107. Securities Payable on Redemption Date . . . . . . . . . 99
SECTION 1108. Securities Redeemed in Part . . . . . . . . . . . . . . 100
ARTICLE TWELVE
SINKING FUNDS . . . . . . . . . . . . . . 101
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . 101
SECTION 1202. Satisfaction of Mandatory Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . 102
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ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . 102
SECTION 1301. Purposes for Which Meetings May Be Called . . . . . . . 102
SECTION 1302. Call, Notice and Place of Meetings . . . . . . . . . . 102
SECTION 1303. Persons Entitled to Vote at Meetings . . . . . . . . . 103
SECTION 1304. Quorum; Action . . . . . . . . . . . . . . . . . . . . 103
SECTION 1305. Determination of Voting Rights; Conduct and Adjournment
of Meetings . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 1306. Counting Votes and Recording Action of Meetings . . . . 105
vii
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture and all Securities issued hereunder,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United States
of America at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Additional Amounts" has the meaning specified in Section 1008.
"Affected Security" has the meaning specified in Section 1102.
"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
<PAGE>
2
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a leading newspaper customarily published at
least once a day for at least five days in each calendar week and of general
circulation in New York City and in London and, so long as the Securities are
listed on the Stock Exchange and the Stock Exchange shall so require, in
Luxembourg or, if it shall be impracticable in the opinion of the Trustee to
make such publication, in another principal city in Western Europe. Such
publication is expected to be made in The Wall Street Journal (Eastern edition),
the Financial Times (London edition) and the Luxemburger Wort.
"Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act hereunder or any directors
and/or officers of the Company to whom that board or committee shall have
delegated its authority.
"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.
"Business Day" means with respect to any Security, unless otherwise
specified in accordance with Section 301, any day, other than a Saturday or
Sunday, that meets each of the following applicable requirements: such day is
(a) not a day on which banking institutions in the Borough of Manhattan, The
City of New York are authorized or required by law, regulation or executive
order to close; (b) if the Security is denominated in a Foreign Currency other
than the ECU, (x) not a day on which banking institutions are authorized or
required by law or regulation to close in the principal financial center of the
country issuing the Foreign Currency and (y) a day on which banking institutions
in such principal financial center are carrying out transactions in such Foreign
Currency; (c) if the Security is denominated in ECU, (x) not a day on which
banking institutions are authorized or required by law or regulation to close in
Luxembourg and (y) an ECU clearing day, as determined by the ECU Banking
Association in Paris; and (d) if such Security is a LIBOR Security, a London
Banking Day.
"Cedel" means Cedel Bank, societe anonyme.
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3
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means Lehman Brothers Inc., a Delaware corporation, until a
successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall mean each such
successor corporation.
"Company Request" or "Company Order" means, respectively, a written request
or order signed in the name of the Company by its Chairman of the Board, its
Chief Executive officer, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Component Currency" has the meaning specified in Section 311(e).
"Consolidated Net Worth" means consolidated assets minus consolidated
liabilities as calculated in accordance with generally accepted accounting
principles.
"Conversion Event" means, with respect to any Foreign Currency, (i) the
unavailability to the Company of such Foreign Currency for making payments
thereof due to the imposition of exchange controls or other circumstances beyond
the Company's control, (ii) the cessation of use of such Foreign Currency as a
unit of domestic exchange by the government or governments of the country or
countries which so used such currency or (iii) the cessation of use of such
Foreign Currency for the settlement of transactions by public institutions of or
within the international banking community.
"Corporate Trust Office" of the Trustee means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered. Such office is set forth in Section 615 of the Indenture.
"corporation" includes corporations, associations, companies and business
trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Currency Determination Agent", with respect to Securities of any series,
means a Person (other than the Trustee) designated pursuant to Section 301 or
Section 312.
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4
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series issuable
or issued in the form of a global Security, the Person designated as Depositary
by the Company pursuant to Section 301 until a successor Depositary shall have
become such pursuant to the applicable provisions of the Standard Provisions,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
"Depositary" as used with respect to the Securities of any such series shall
mean the Depositary with respect to the Securities of that series.
"Designated Subsidiary" means any present or future consolidated subsidiary
the Consolidated Net Worth of which constitutes at least 5 percent of the
Consolidated Net Worth of the Company.
"Determination Notice" has the meaning specified in Section 1102.
"Dollars" and the sign "$" mean the coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public
and private debts.
"Dual Currency Security" means any Security as to which the Company has a
one time option of making all payments of principal (premium, if any) and
interest scheduled after the exercise of such option in a specified currency
other than the currency in which such Security is denominated, all as specified
in accordance with Section 301.
"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 311(e).
"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.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
<PAGE>
5
"Floating Rate Security" means a Security which provides for the payment of
interest at a variable rate determined periodically by reference to an interest
rate index or any other index specified pursuant to Section 301.
"Foreign Currency" means any currency or composite currency actively
maintained as a recognized unit of domestic exchange by the government or
governments of any country or countries other than the United States.
"Global Exchange Agent" has the meaning specified in Section 304.
"Government Obligations" means securities which are (i) direct obligations
of the government which issued the currency in which the Securities of such
series are payable or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the government which issued the
currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed by such government, which, in either case,
are full faith and credit obligations of such government and are not callable or
redeemable at the option of the issuer thereof.
"Holder", when used with respect to any Security, means in the case of a
Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"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.
"Indexed Security" means any Security as to which the amount of payments of
principal, premium, if any, and/or interest due thereon is determined with
reference to the rate of exchange between the currency or currency unit in which
the Security is denominated and any other specified currency or currency unit,
to the relationship between two or more currencies or currency units, to the
price of one or more specified securities or commodities, to one or more
securities or commodities exchange indices or other indices or by other similar
methods or formulas, all as specified in accordance with Section 301.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only at Maturity, means interest payable at
Maturity.
<PAGE>
6
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"LIBOR" means, with respect to any series of Securities, the rate specified
as LIBOR for such Securities in accordance with Section 301.
"LIBOR Security" means any Security which bears interest at a floating rate
calculated with reference to LIBOR.
"London Banking Day" means, with respect to any LIBOR Security, any day on
which dealings in deposits in the currency in which such LIBOR Security is
denominated are transacted in the London interbank market.
"mandatory sinking fund payment" has the meaning specified in Section 1201.
"Market Exchange Rate" with respect to any Foreign Currency on any date
means, unless otherwise specified in accordance with Section 301, the noon
buying rate in The City of New York for cable transfers in such Foreign Currency
as certified for customs purposes by the Federal Reserve Bank of New York for
such Foreign Currency on the second Business Day prior to such date (or, in the
event such buying rate is not then available, the most recently available buying
rate for such Foreign Currency).
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an instalment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, any Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for (including an employee of) the Company, and who shall be acceptable to the
Trustee.
"optional sinking fund payment" has the meaning specified in Section 1201.
"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 and
which is designated as an Original Issue Discount Security pursuant to Section
301.
<PAGE>
7
"Outstanding" when used with respect to Securities means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities or portions thereof for whose payment or
redemption money in the necessary amount and in the required currency or
currency unit has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company or any other obligor on the Securities) in
trust for the Holders of such Securities and any related coupons or shall
have been set aside and segregated in trust by the Company or any other
obligor on the Securities (if the Company or any other obligor on the
Securities shall act as its own Paying Agent); provided, however, that, if
such Securities or portions thereof are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(c) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Securities Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee actually 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 such other obligor), and (ii) the
principal amount of any Indexed Security that shall be deemed to be Outstanding
for such purposes shall be deemed to be the face amount thereof unless the
specified terms of any such Indexed Security provide otherwise and the principal
<PAGE>
8
amount of any Dual Currency Security shall be the amount that would be due and
payable with respect to such Dual Currency Security as of the date of such
determination upon a declaration of acceleration pursuant to Section 502.
"Overdue Rate", when used with respect to any series of the Securities,
means the rate designated as such in or pursuant to the Board Resolution or the
supplemental indenture, as the case may be, relating to such series as
contemplated by Section 301.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest, if any, on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest, if any, on the Securities of that series are payable as specified as
contemplated by Section 301 or, if not so specified, as specified in Section
1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed,
means the price, in the currency or currency unit in which such Security is
denominated or which is otherwise provided for pursuant to this Indenture, at
which it is to be redeemed pursuant to the resolution of the Board of Directors
or the supplemental indenture, as the case may be, with respect to the
Securities of such series as contemplated by Section 301, exclusive of interest
accrued and unpaid to the Redemption Date.
<PAGE>
9
"Registered Holder" means the Person in whose name a Registered Security is
registered in the Security Register.
"Registered Security" means any Security established pursuant to Section
201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the
person or persons set forth in Section 605 of the Indenture.
"Restricted Period" has the meaning set forth in United States Treasury
Regulation Section 1.163-5(c)(2)(i)(D)(7) (generally, the first 40 days after
the closing date and, with respect to unsold allotments, until sold).
"Securities" means any Securities authenticated and delivered under this
Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity", when used with respect to any Security or any instalment
of principal thereof or interest thereon, means the date specified in such
Security or a coupon representing such instalment of interest as the fixed date
on which the principal of such Security or such instalment of principal or
interest is due and payable.
"Stock Exchange" means the Luxembourg Stock Exchange.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only as
long as no senior class of stock has such voting power by reason of any
contingency.
"Trustee" shall mean the Person named as trustee in the first paragraph of
this Indenture as originally executed 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
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10
hereunder, and "Trustee" as used with respect to the Securities of any series in
any Article of this Indenture shall mean the Trustee with respect to Securities
of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which this
instrument was executed, except as provided in Section 905.
"United States" means the United States of America (including the States
and District of Columbia) and its possessions (including Puerto Rico and the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and Northern Mariana
Islands).
"United States Alien" has the meaning specified in Section 1008.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee 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 certificates provided
pursuant to Section 1006) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or
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11
investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing.
If Securities of a series are issuable as Bearer Securities, any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of such series may,
alternatively, be embodied in and evidenced by the record of
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12
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
Thirteen, 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 (subject to Section 601) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section. The
record of any meeting of holders of Securities shall be proved in the manner
provided in Section 1306.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.
(d) The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described, or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, (2) such
Bearer Security is produced to the Trustee by some other Person, (3) such Bearer
Security is surrendered in exchange for a
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13
Registered Security, or (4) such Bearer Security is no longer Outstanding. The
principal amount and serial numbers of Bearer Securities held by any Person, and
the date of holding the same, may also be proved in any other manner which the
Company and the Trustee deem sufficient.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 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, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument 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 to Holders of any event, (1) such
notice shall be sufficiently given (unless otherwise herein expressly provided)
to Holders of Registered Securities 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; and
(2) such notice shall be sufficiently given (unless otherwise herein expressly
provided) to Holders of Bearer Securities if published in an Authorized
Newspaper on a Business Day at least twice, the first such publication to be not
earlier than the earliest date, and not later than the latest date, prescribed
for the giving of such notice.
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14
In any case where notice to Registered Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Registered Security shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities or the sufficiency
of any notice to Holders of Bearer Securities given as provided herein. In case
by reason of the suspension of regular mail service or by reason of any other
cause it shall be impracticable to give such notice to Holders of Registered
Securities by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder.
In case 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 made
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language, and
any published notice may also be in an official language of the country of
publication.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the duties
imposed by any of Sections 310 through 317, inclusive, of the Trust Indenture
Act through the operation of Section 318(c) thereof, such imposed duties shall
control.
SECTION 109. Effect of Headings and Table of Contents.
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15
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or in the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 112. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflict of laws principles thereof.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of a Security of any series shall not be a Business Day at the relevant
Place of Payment, then (notwithstanding any other provision of this Indenture or
of the Securities or coupons) payment of interest, if any, or principal (and
premium, if any) with respect to such Security need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
SECTION 114. Execution In Counterparts.
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 115. Immunity of Incorporators, Stockholders, Officers
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16
and Directors.
No recourse shall be had for the payment of the principal of (and premium,
if any) or the interest, if any, on any Security or coupon of any series, or for
any claim based thereon, or upon any obligation, covenant or agreement of this
Indenture, against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation, either
directly or indirectly through the Company or any successor corporation, whether
by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise; it being expressly agreed and understood
that this Indenture and all the Securities and coupons of each series are solely
corporate obligations, and that no personal liability whatever shall attach to,
or is incurred by, any incorporator, stockholder, officer or director, past,
present or future, of the Company or of any successor corporation, either
directly or indirectly through the Company or any successor corporation, because
of the incurring of the indebtedness hereby authorized or under or by reason of
any of the obligations, covenants or agreements contained in this Indenture or
in any of the Securities or coupons of any series, or to be implied herefrom or
therefrom; and that all such personal liability is hereby expressly released and
waived as a condition of, and as part of the consideration for, the execution of
this Indenture and the issue of the Securities and coupons of each series.
SECTION 116. Certain Matters Relating to Currencies.
Each reference to any currency or currency unit in any Security, or in the
Board Resolution or supplemental indenture relating thereto, shall mean only the
referenced currency or currency unit and no other currency or currency unit.
The Trustee shall segregate moneys, funds and accounts held by the Trustee
in one currency or currency unit from any moneys, funds or accounts held in any
other currencies or currency units, notwithstanding any provision herein which
would otherwise permit the Trustee to commingle such amounts.
For the purposes of calculating the principal amount of Securities of any
series payable in a Foreign Currency or currency unit for any purpose under this
Indenture, the principal amount of such Securities at any time outstanding shall
be deemed to be that amount of Dollars that could be obtained for such principal
amount on the basis of a spot rate of exchange specified to the Trustee for such
series in an Officer's Certificate for such Foreign Currency or currency unit
into Dollars as of the date of any such calculation.
SECTION 117. Calculation of Principal Amount.
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For the purposes of calculating the principal amount of any Security
denominated in a Foreign Currency for any purpose under this Indenture, the
principal amount of such Security at any time outstanding shall be deemed to be
that amount of Dollars that could be obtained for such principal amount on the
basis of a spot rate of exchange specified to the Trustee for such Security in
an Officers' Certificate for such Foreign Currency into Dollars as of the date
of any such calculation.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in substantially
the form (including global form) as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rules of any securities exchange or to conform
to usage or as may, consistently herewith, be determined by the officers
executing such Securities or coupons, as evidenced by their execution of the
Securities or coupons. If temporary Securities of any series are issued in
global form as permitted by Section 304, the form thereof shall be established
as provided in the preceding sentence. If the forms of Securities or coupons of
any series (or any such temporary global Security) are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities (or any such temporary global Security) or coupons.
Unless otherwise specified as contemplated by Section 301, Securities in
bearer form shall have interest coupons attached.
The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities or
coupons, as evidenced by their execution thereof.
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SECTION 202. Form of Trustee's Certificate of Authentication.
The Certificate of Authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
__________________________,
as Trustee
By________________________
Authorized Signatory
SECTION 203. Securities in Global Form.
If Securities of a series are issuable in global form, any such Security
may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made in such manner and by
such Person or Persons as shall be specified therein. Any instructions by the
Company with respect to a Security in global form, after its initial issuance,
shall be in writing but need not comply with Section 102.
Global Securities may be issued in either registered or bearer form and in
either temporary or permanent form.
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 or pursuant to a Board Resolution, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series,
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(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1108);
(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities or both;
(4) the date or dates (or manner of determining the same) on which
the principal of the Securities of the series is payable (which, if so
provided in such Board Resolution or supplemental indenture, may be
determined by the Company from time to time and set forth in the Securities
of the series issued from time to time);
(5) the rate or rates (or manner of determining the same) at which
the Securities of the series shall bear interest, if any, and the date or
dates from which such interest shall accrue (which, in either case or both,
if so provided in such Board Resolution or supplemental indenture, may be
determined by the Company from time to time and set forth in the Securities
of the series issued from time to time), the Interest Payment Dates on
which such interest shall be payable (or the manner of determining the
same) and the Regular Record Date for the interest payable on any
Registered Securities on any Interest Payment Date 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 307;
(6) the place or places where, subject to the provisions of Section
1002, the principal of and any premium and any Interest on Securities of
the series shall be payable, any Registered Securities of that series may
be surrendered for registration of transfer, any Securities of the series
may be surrendered for exchange and notices and demands to or upon the
Company in respect of the Securities of the series and this Indenture may
be served;
(7) if Section 311(b) applies, the Election Date (which shall not be
less than 15 days before the payment date);
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20
(8) the price or prices at which, and the currency or currency unit
in which, the Securities of the series are payable, and the period or
periods within which and the terms and conditions upon which Securities of
the series may be redeemed, as a whole or in part, at the option of the
Company, pursuant to any sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at
which, and the currency or currency unit in which, the Securities of the
series are payable, and the period or periods within which and the terms
and conditions upon which Securities of the series shall be redeemed,
purchased or repaid, as a whole or in part, pursuant to such obligation;
(10) if the coin or currency in which the Securities shall be
issuable is Dollars, the denominations in which any Registered Securities
of the series shall be issuable, if other than denominations of $1,000 and
any integral multiple thereof and the denominations in which any Bearer
Securities of the series shall be issuable if other than the denomination
of $5,000;
(11) the date as of which any Bearer Securities of the series and any
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;
(12) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(13) if other than Dollars, the coin or currency or currency unit in
which payment of the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be made 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 the
provisions of Section 311;
(14) if the principal of (and premium, if any) or interest, if any,
on the Securities of the series are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency or currency unit other
than that in which the Securities are denominated
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21
or stated to be payable, in accordance with, in addition to or in lieu of
the provisions of Section 311, the period or periods within which, and the
terms and conditions upon which, such election may be made, and the time
and manner of determining the exchange rate between the currency or
currency unit in which the Securities are denominated and the currency or
currency unit in which the Securities are stated to be payable;
(15) the designation of the original Currency Determination Agent, if
any;
(16) if the Securities of such series are issuable as Indexed
Securities, the manner in which the amount of payments of principal
(premium, if any) and/or interest due thereon shall be determined;
(17) if the Securities of such series may be converted into or
exchanged for other securities of the Company or any other Persons, the
terms and conditions pursuant to which the Securities of such series may be
converted or exchanged;
(18) if the principal of (or premium, if any) or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a Holder thereof, in securities or other property, the type and
amount of such securities or other property, or the method by which such
amount shall be determined, and the periods within which, and the terms and
conditions upon which, any such election may be made;
(19) the applicable Overdue Rate, if any;
(20) any addition to, or modification or deletion of, any Event of
Default or any covenant of the Company specified herein with respect to the
Securities of the series;
(21) if the Securities of such series do not bear interest, the
applicable dates for purposes of Section 701;
(22) if other than as set forth in Section 401, provisions for the
satisfaction and discharge of this Indenture;
(23) the application, if any, of Section 1008 and 1009 to the
Securities of the series;
(24) whether the Securities of the series shall be issued in whole or
in part in the form of a global Security or Securities and, in such case,
the Depositary and Global Exchange Agent, if any, for such
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22
global Security or Securities, whether such global form shall be permanent
or temporary and, if applicable, the Exchange Date;
(25) if Securities of the series are to be issuable initially in the
form of a temporary global Security, the circumstances under which the
temporary global Security may be exchanged for permanent Securities and
whether the permanent Securities will be Registered Securities and/or
Bearer Securities and will be in certificated and/or global form and
whether interest in respect of any portion of such global Security payable
in respect of an Interest Payment Date prior to the Exchange Date shall be
paid to any clearing organization with respect to a portion of such global
Security held for its account and, in such event, the terms and conditions
(including any certification requirements) upon which any such interest
payment received by a clearing organization will be credited to the Persons
entitled to interest payable on such Interest Payment Date if other than as
provided in this Article Three;
(26) if the Securities of such series are issuable as Dual Currency
Securities, the specified currency other than the denominated currency in
which all payments of principal (premium, if any) and interest may be made
at the option of the Company, and any other special terms with respect to
such Securities (which terms shall not be inconsistent with the provisions
of this Indenture); and
(27) 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 as to
denomination, rate of interest, Stated Maturity and the date from which
interest, if any, shall accrue, which terms, as set forth above, may be
determined by the Company from time to time as to Securities of a series if so
provided in or established pursuant to the authority granted in a Board
Resolution or in any such indenture supplemental hereto, and except as may
otherwise be provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate (subject to Section 303) 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 for issuance
of additional Securities of such series.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an
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appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations.
Unless otherwise provided with respect to any series of Securities as
contemplated by Section 301, any Registered Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof, any
Bearer Securities of a series shall be issuable in the denomination of $5,000,
and Registered and Bearer Securities shall be payable in Dollars.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any related coupons shall be executed on behalf of the
Company by its Chairman of the Board, any Vice Chairman of the Board, its
President, one of its Vice Presidents, its Chief Financial Officer or its
Treasurer, under its corporate seal reproduced thereon attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on
the Securities may be manual or facsimile.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such office at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and make available for delivery such Securities;
provided, however, that, in connection with the sale of a Security during the
Restricted Period, no Bearer Security in definitive form shall be mailed or
otherwise delivered to any location in the United States; and provided, further
that a Bearer Security in definitive form may be delivered only if the Person
entitled to receive such Bearer Security shall have furnished a certificate
substantially in the form set forth in Exhibit A to this Indenture, dated no
earlier than 15 days prior to the date on which such Bearer Security is
delivered, unless a certificate substantially in the form set forth in Exhibit A
to this Indenture has previously been furnished pursuant to Section 304. If any
Security shall be represented by a permanent global Security, then, for purposes
of
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24
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 definitive form by
the Company of such beneficial owner's interest in such permanent global
Security. Except as permitted by Section 306 or 307, 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 one series are not to be issued at one time and if a Board Resolution or
supplemental indenture relating to such series shall so permit, such Company
Order may set forth procedures acceptable to the Trustee for the issuance of
such Securities, including procedures with respect to interest rate, Stated
Maturity, date of issuance and date from which interest, if any, 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 shall be fully protected in relying upon (i) a Board
Resolution or an executed supplemental Indenture, if any, and (ii) an Opinion of
Counsel stating,
(a) if the form of such Securities and any coupons have been
established by or pursuant to Board Resolution or supplemental indenture as
permitted by Section 201, that such forms have been established in
conformity with the provisions of this Indenture;
(b) if the terms of such Securities and any coupons have been
established by or pursuant to Board Resolution or supplemental indenture as
permitted by Section 301, that such terms have been established in
conformity with the provisions of this Indenture;
(c) that such Securities, together with any coupons appertaining
thereto, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general principles of equity (whether considered in a
proceeding at law or in equity) and by an implied covenant of good faith
and fair dealing; and
(d) that the issuance of such Securities and any related coupons will
not conflict with or result in a breach of the terms or provisions of the
charter or by-laws of the Company, or any indenture, mortgage or other
agreement known to such counsel by which the Company is bound.
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25
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Registered Security shall be dated the date of its authentication, and
unless otherwise specified as contemplated by Section 301, each Bearer Security
(including any temporary or permanent Bearer Security in global form) shall be
dated as of the date of original issuance of the first Security of such series
to be issued.
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
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
Any temporary global Security and any permanent global Security shall,
unless otherwise provided therein, be delivered to a Depositary designated
pursuant to Section 301, for the benefit, in the case of a global Security in
bearer form, of Euroclear and Cedel, and for credit to the respective accounts
of the beneficial owners of such Securities (or to such other accounts as they
may direct). With respect to temporary global Securities in bearer form, on or
prior to the last day of the Restricted Period, the Company shall deliver to the
Trustee or the Global Exchange Agent as applicable definitive Bearer Securities
and definitive Registered Securities, executed by the Company.
Each Depositary designated pursuant to Section 301 for a global Security in
registered form must, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the Securities
Exchange Act of 1934 and any other applicable statute or regulation.
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26
SECTION 304. Temporary Securities; Exchange of Temporary Global
Securities and Permanent Global Securities in
Bearer Form.
Pending the preparation of permanent Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the permanent Securities in lieu of which they are
issued, in registered form or, if authorized, in bearer form with one or more
coupons or without coupons, and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities. Any such
temporary Securities may be in global form, representing such of the Outstanding
Securities of such series as shall be specified therein.
Except in the case of temporary global Securities in bearer form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any series are issued, the Company will
cause permanent Securities of that series to be prepared within a reasonable
period of time after the issue date of such temporary Securities. After the
preparation of permanent Securities of such series, the temporary Securities of
such series shall be exchangeable for permanent Securities of such series and of
a like Stated Maturity and with like terms and provisions upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series the
Company shall execute and (in accordance with a Company Order delivered at or
prior to the authentication of the first permanent Security of such series) the
Trustee shall authenticate and make available for delivery in exchange therefor
a like principal amount of permanent Securities of the same series of authorized
denominations and of a like Stated Maturity and with like terms and provisions;
provided, however, unless otherwise specified pursuant Section 301, no permanent
Bearer Securities shall be delivered in exchange for a temporary Registered
Security; and provided, further, that permanent Bearer Securities shall be
delivered in exchange for a temporary global Security in bearer form only in
compliance with the conditions set forth in Section 303 and this Section 304.
Until exchanged as herein above provided, the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
permanent Securities of the same series and tenor authenticated and delivered
hereunder.
Within a reasonable period of time after the Restricted Period but in any
event not later than the date specified in or
<PAGE>
27
determined pursuant to the terms of any temporary global Security in bearer
form, the Securities represented by any such temporary global Security in bearer
form may be exchanged for (i) in whole, definitive Bearer Securities or (ii) in
whole, Securities to be represented thereafter by one or more permanent global
Securities in bearer form, without interest coupons, and/or (iii) in whole or in
part, definitive Registered Securities (the date of such exchange, the "Exchange
Date"); provided, however, that if definitive Bearer Securities have previously
been issued in exchange for an interest in a permanent global Security in bearer
form representing Securities of the same series, then (unless the Securities
which would continue to be represented by any such permanent global Security in
bearer form would be regarded by Euroclear and Cedel as fungible with any such
definitive Bearer Securities issued in partial exchanges for interests in any
such permanent global Security) interests in such temporary global Security in
bearer form shall only thereafter be exchangeable, in whole, for definitive
Bearer Securities, definitive Registered Securities or any combination thereof;
provided, further, however, that if definitive Bearer Securities have previously
been issued in exchange for interests in a temporary global Security in bearer
form representing Securities of the same series, then interests in any such
temporary global Security shall not be exchangeable for interests in a permanent
global Security in bearer form of the series (unless the Securities to be
represented by any such permanent global Security in bearer form would be
regarded by Euroclear and Cedel as fungible with such previously issued
definitive Bearer Securities). On the Exchange Date any such temporary global
Security shall be surrendered by the Depositary to the Trustee as the Company's
agent for such purpose, or the agent appointed by the Company pursuant to
Section 301 to effect the exchange of any such temporary global Security for
permanent Securities (the "Global Exchange Agent"), and following such
surrender, the Trustee or the Global Exchange Agent (as authorized by the
Trustee as an Authenticating Agent pursuant to Section 614) shall (1) endorse
any such temporary global Security to reflect the reduction of its principal
amount by an equal aggregate principal amount of such permanent Securities being
registered, (2) endorse the applicable permanent global Security in bearer form,
if any, to reflect the initial amount, or an increase in the amount of
Securities represented thereby, (3) manually authenticate such definitive Bearer
Securities, definitive Registered Securities or permanent global Security, as
the case may be, (4) make such definitive Bearer Securities or definitive
Registered Securities, as the case may be, available for delivery to the Holder
thereof or, as the case may be, make available for delivery such permanent
global Security in bearer form to the Depositary to be held outside the United
States for the accounts of Euroclear and Cedel, for credit to the respective
accounts at Euroclear and Cedel, designated by or on behalf of the beneficial
owners of such Securities (or to such other accounts as they may direct) and (5)
redeliver such temporary global Security to the Depositary, unless such
temporary global Security shall have been
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28
cancelled in accordance with Section 309 hereof provided, however, that, unless
otherwise specified in such temporary global Security or unless a certificate
substantially in the form set forth in Exhibit B to this Indenture has
previously been provided pursuant to this Section 304, upon such presentation by
the Depositary, such temporary global Security shall be 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 for definitive Bearer Securities, definitive
Registered Securities or Securities represented by one or more permanent global
Securities in bearer form, as the case may be, 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 for
definitive Bearer Securities, definitive Registered Securities or Securities
represented by one or more permanent global Securities in bearer form, as the
case may be, each substantially in the form set forth in Exhibit B to this
Indenture. Each certificate substantially in the form of Exhibit B hereto of
Euroclear or Cedel, as the case may be, shall be based on certificates of the
account holders listed in the records of Euroclear or Cedel, as the case may be,
as being entitled to all or any portion of the applicable temporary global
Security. An account holder of Euroclear or Cedel, as the case may be, desiring
to effect the exchange of an interest in a temporary global Security in bearer
form for definitive Bearer Securities, definitive Registered Securities or
Securities represented by one or more permanent global Securities in bearer
form, as the case may be, shall instruct Euroclear or Cedel, as the case may be,
to request such exchange on its behalf and shall deliver to Euroclear or Cedel,
as the case may be, a certificate substantially in the form of Exhibit A hereto
and dated no earlier than 15 days prior to the Exchange Date.
The delivery to the Trustee or the Global Exchange Agent by Euroclear or
Cedel of any certificate substantially in the form of Exhibit B hereto may be
relied upon by the Company and the Trustee or the Global Exchange Agent as
conclusive evidence that a corresponding certificate or certificates has or have
been delivered to Euroclear or to Cedel, as the case may be, pursuant to the
terms of this Indenture.
At any time after the last day of the Restricted Period, upon 30 days'
notice to the Trustee or the Global Exchange Agent by Euroclear or Cedel, as the
case may be, acting at the request of or on behalf of the beneficial owner,
Securities represented by a permanent global Security in bearer form may be
exchanged in whole for definitive Bearer Securities or in whole or in part for
definitive Registered Securities and the Trustee or the Global Exchange Agent
shall authenticate and make available for delivery, in exchange for each portion
of such permanent global Security, an equal aggregate principal amount of
definitive Securities of the same series of authorized
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29
denominations and of like tenor as the portion of such permanent global Security
to be exchanged, which, unless the Securities of the series are not issuable
both as Bearer Securities and as Registered Securities, as contemplated by
Section 301, shall be in the form of Bearer Securities or Registered Securities,
or any combination thereof, as shall be specified by the beneficial owner
thereof; provided, however, that if definitive Bearer Securities are issued in
partial exchange for Securities represented by such a permanent global Security
or by a temporary global Security in bearer form of the same series, such
issuance shall (unless the Securities which would continue to be represented by
such permanent global Security would be regarded by Euroclear and Cedel as
fungible with any such definitive Bearer Securities issued in partial exchange
for Securities represented by any such permanent global Security or any such
temporary global Security of the same series) give rise to the exchange of such
permanent global Security in whole for, at the option of the Holders entitled
thereto, definitive Bearer Securities, definitive Registered Securities or any
combination thereof. On or prior to the thirtieth day following receipt by the
Trustee or the Global Exchange Agent of such notice with respect to the exchange
of such Securities or, if such day is not a Business Day, the next succeeding
Business Day, the permanent global Security shall be surrendered by the
Depositary to the Trustee or the Global Exchange Agent, as the Company's agent
for such purpose, to be so exchanged for definitive Securities following such
surrender, upon the request of Euroclear or Cedel, as the case may be, and the
Trustee or the Global Exchange Agent shall (1) endorse the applicable permanent
global Security to reflect the reduction of its principal amount by the
aggregate principal amount of such definitive Securities being requested, (2)
cause the terms of such Securities and coupons, if any, to be entered on one or
more definitive Bearer Securities and/or definitive Registered Securities, as
the case may be, (3) manually authenticate such definitive Securities and (4)
with respect to definitive Bearer Securities, make available for delivery such
definitive Securities outside the United States to Euroclear or Cedel, as the
case may be, for or on behalf of the beneficial owner thereof, in exchange for a
portion of such permanent global Security.
Unless otherwise specified in any such temporary global Security or
permanent global Security in bearer form, any such exchange shall be made free
of charge to the beneficial owners of such temporary global Security or
permanent global Security, except that a Person receiving definitive Securities
must bear the cost of insurance, postage, transportation and the like in the
event that such Person does not take delivery of such definitive Securities in
person at the offices of Euroclear or Cedel or at the Corporate Trust Office of
the Trustee or at the office or agency in a Place of Payment for Securities of
such series, as the case may be. Definitive Securities in bearer form to be
delivered in exchange for any portion of a temporary global
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30
Security or a permanent global Security in bearer form shall be delivered only
outside the United States.
Until exchanged in full as herein above provided, any temporary global
Security or permanent global Security in bearer form shall in all respects be
entitled to the same benefits under this Indenture as definitive Bearer
Securities of the same series and tenor authenticated and delivered hereunder,
except that, unless otherwise specified as contemplated by Section 301, interest
payable on any such 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 such Interest Payment Date only upon
delivery by Euroclear and Cedel to the Trustee or the Global Exchange Agent of a
certificate or certificates substantially in the form set forth in Exhibit B to
this Indenture, for credit without further interest on or after such Interest
Payment Date to the respective accounts of the Persons who are the beneficial
owners of such temporary global Security on such Interest Payment Date and who
have each delivered to Euroclear or Cedel, as the case may be, a certificate
substantially in the form set forth in Exhibit A to this Indenture.
Any definitive Bearer Security authenticated and made available for
delivery by the Trustee in exchange for a portion of a temporary global Security
in bearer form or a permanent global Security in bearer form shall not bear a
coupon for any interest which shall theretofore have been duly paid by the
Trustee to Cedel or Euroclear or by the Company to the Trustee in accordance
with the provisions of this Section 304.
SECTION 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Trustee is hereby appointed Security Registrar for the purpose of
registering Registered Securities and transfers of Registered Securities as
herein provided.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series, of any authorized denominations
and in a like aggregate principal amount and of a like Stated Maturity and with
like terms and conditions.
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31
Except as set forth below, at the option of the Holder, Registered
Securities of any series may be exchanged for other Registered Securities of the
same series, of any authorized denominations and in a like aggregate principal
amount and of a like Stated Maturity and with like terms and conditions, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and make available for delivery, the Securities
which the Holder making the exchange is entitled to receive. Except as
otherwise specified pursuant to Section 301, Registered Securities may not be
exchanged for Bearer Securities.
Notwithstanding any other provision of this Section or Section 304, unless
and until it is exchanged in whole or in part for Registered Securities in
definitive form, a global Security representing all or a portion of the
Registered Securities of a series may not be transferred except as a whole by
the Depositary for such series to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
At the option of the Holder, definitive Bearer Securities of any series may
be exchanged for definitive Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the definitive 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 definitive Bearer Security is unable
to produce any such unmatured coupon or coupons or matured coupon or coupons in
default, such exchange may be effected if the definitive 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 definitive
Bearer Security of any series is surrendered at any such office or agency in
exchange for a definitive 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)
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32
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
definitive Bearer Security shall be surrendered without the coupon relating to
such Interest Payment Date or proposed date for payment, as the case may be (or,
if such coupon is so surrendered with such definitive Bearer Security, such
coupon shall be returned to the person so surrendering the definitive Bearer
Security), 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 definitive 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 make available for delivery, the
Securities which the Holder making the exchange is entitled to receive.
If at any time the Depositary for Securities of a series in registered form
notifies the Company that it is unwilling or unable to continue as Depositary
for the Securities of such series or if at any time the Depositary for the
Securities for such series shall no longer be eligible under Section 303, the
Company shall appoint a successor Depositary with respect to the Securities for
such series. If a successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company's election pursuant to
Section 301 shall no longer be effective with respect to the Securities for such
series and the Company will issue, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Registered Securities of
such series, will authenticate and make available for delivery Registered
Securities in definitive form in exchange for an aggregate principal amount
equal to the principal amount of the global Security or Securities representing
such Securities.
The Company may at any time and in its sole discretion determine that the
Registered Securities of any series issued in the form of one or more global
Securities shall no longer be represented by such global Security or Securities.
In such event, the Company will issue, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Registered
Securities of such series, will authenticate and make available for delivery,
Registered Securities of such series in definitive form and in an aggregate
principal amount equal to the principal amount in exchange for the global
Security or Securities representing such Registered Securities.
If specified by the Company pursuant to Section 301 with respect to a
series of Securities in registered form, the Depositary for such series of
Securities may surrender a global
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33
Security for such series of Securities in exchange in whole or in part for
Registered Securities of such series of like tenor and terms and in definitive
form on such terms as are acceptable to the Company and such Depositary.
Thereupon the Company shall execute, and the Trustee shall authenticate and make
available for delivery, without service charge, (i) to each Person specified by
such Depositary a new Registered Security or Securities of the same series, of
like tenor and terms and of any authorized denomination as requested by such
Person in aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the global Security; and (ii) to such Depositary a new
global Security of like tenor and terms and in a denomination equal to the
difference, if any, between the principal amount of the surrendered global
Security and the aggregate principal amount of Registered Securities delivered
to Holders thereof.
Upon the exchange in full of a global Security for Securities in definitive
form, such global Security shall be cancelled by the Trustee. Registered
Securities issued in exchange for a global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary for such global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Registered Securities to the persons in whose names such
Securities are so registered.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee) 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 or 1108 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section
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34
1104 and ending at the close of business on (A) if Securities of the series are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of redemp-
tion or, if Securities of the series are also issuable as Registered Securities
and there is no publication, the mailing of the relevant notice of redemption,
or (ii) to register the transfer of or exchange any Registered Security so
selected for redemption as a whole or in part, except the unredeemed portion of
any Security being redeemed in part, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series and like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining thereto is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and make available for delivery in exchange
therefor a new Security of the same series and in a like aggregate principal
amount and of a like Stated Maturity and with like terms and conditions and
bearing a number not contemporaneously outstanding with coupons corresponding to
the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or coupon
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and make available for delivery, 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 in a like
aggregate principal amount and of a like Stated Maturity and with like terms and
conditions and bearing a number not contemporaneously outstanding with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or to the Security to which such destroyed, lost or stolen
coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or coupon; provided,
however, that principal of (and premium, if any) and any interest on Bearer
Securities shall, except as otherwise provided in Section
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35
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.
Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Unless otherwise provided with respect to the Securities of any series, at
the option of the Company payment of interest may be made (i) by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register, or (ii) at the option of the Company, (1) in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States, or (2) in the case of a Registered Security,
by transfer to an account maintained by the payee with a bank located inside the
United States.
Unless otherwise provided or contemplated by Section 301, every permanent
global Security in bearer form will provide that interest, if any, payable on
any Interest Payment Date will be paid to each of Euroclear and Cedel with
respect to that
<PAGE>
36
portion of such permanent global Security held for its account by the
Depositary. Each of Euroclear and Cedel will in such circumstances credit the
interest received by it in respect of such permanent global Security to the
accounts of the beneficial owners thereof.
Any interest on any Registered Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money in the currency or currency unit 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 as
provided in Sections 311(b), 311(d) and 311(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 prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Registered Securities of such series at
his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having
<PAGE>
37
been so mailed, Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be 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 manner of payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 307) interest, if
any, on such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the 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 global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
<PAGE>
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SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and, in the case of Registered Securities and matured coupons,
shall be promptly cancelled by it. All Bearer Securities and unmatured coupons
so delivered to the Trustee shall be cancelled by the Trustee. 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 all Securities so delivered shall be promptly cancelled
by the Trustee. Notwithstanding any other provision of this Indenture to the
contrary, in the case of a series all the Securities of which are not to be
originally issued at one time, a Security of such series shall not be deemed to
have been Outstanding at any time hereunder if and to the extent that,
subsequent to the authentication and delivery thereof, such Security is
delivered to the Trustee for cancellation by the Company or any agent thereof
upon the failure of the original purchaser thereof to make payment therefor
against delivery thereof, and any Security so delivered to the Trustee shall be
promptly cancelled by it. 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. All cancelled Securities and coupons
held by the Trustee shall be returned by the Trustee.
SECTION 310. Computation of Interest.
Except as otherwise specified pursuant to Section 301 for Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year of twelve 30-day months.
SECTION 311. Currency and Manner of Payments in Respect of
Registered Securities.
Unless otherwise specified in accordance with Section 301 with respect to
any series of Registered Securities, the following provisions shall apply:
(a) Except as provided in paragraphs (b) and (d) below, the principal
of (and premium, if any) and interest on Registered Securities of any
series denominated in a Foreign Currency will be payable by the Company in
Dollars based on the equivalent of that Foreign Currency converted into
Dollars in the manner described in paragraph (c) below.
(b) It may be provided pursuant to Section 301 with respect to
Registered Securities of any series
<PAGE>
39
denominated in a Foreign Currency that Holders shall have the option,
subject to paragraph (d) below, to receive payments of principal of (and
premium, if any) and interest on such Registered Securities in such Foreign
Currency by delivering to the Trustee (or to any duly appointed Paying
Agent) a written election, to be in form and substance satisfactory to the
Trustee (or to any such Paying Agent), 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 such Foreign Currency, such
election will remain in effect for such Holder until changed by such Holder
by written notice to the Trustee (or to any such Paying Agent); provided,
however, that 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
provided, further, that no such change or 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, the Company has
exercised any satisfaction or discharge options pursuant to Article Four or
Section 1009 or notice of redemption has been given by the Company pursuant
to Article Eleven. In the event any Holder makes any such election, such
election will not be effective as to any transferee of such Holder and such
transferee shall be paid in Dollars unless such transferee makes an
election as specified above; provided, however, that such election, if in
effect while funds are on deposit with respect to the Registered Securities
as described in Section 401(a)(1)(B) or Section 1009, will be effective on
any transferee of such Holder unless otherwise specified pursuant to
Section 301 for such Registered Securities. Any Holder of any such
Registered Security who shall not have delivered any such election to the
Trustee (or to any duly appointed Paying Agent) not later than the close of
business on the applicable Election Date will be paid the amount due on the
applicable payment date in Dollars.
(c) With respect to any Registered Security denominated in a Foreign
Currency and payable in Dollars, the amount of Dollars so payable will be
determined by the Currency Determination Agent based on the indicative
quotation in The City of New York selected by the Currency Determination
Agent at approximately 11:00 A.M., New York City time, on the second
Business Day preceding the applicable payment date that yields the least
number of Dollars upon conversion of the Foreign Currency. Such selection
shall be made from among the quotations appearing on the bank composite or
multi-contributor pages of the
<PAGE>
40
Reuters Monitor Foreign Exchange Service or, if not available, the Telerate
Monitor Foreign Exchange Service. If such quotations are unavailable from
either such foreign exchange service, such selection shall be made from the
quotations received by the Currency Determination Agent from no more than
three nor less than two recognized foreign exchange dealers in The City of
New York selected by the Currency Determination Agent and approved by the
Company (one of which may be the Currency Determination Agent) for the
purchase by the quoting dealer, for settlement on such payment date, of the
aggregate amount of the Foreign Currency payable on such payment date in
respect of all Securities denominated in such Foreign Currency and for
which the applicable dealer commits to execute a contract. If no such bid
quotations are available, payments shall be made in the Foreign Currency.
(d) If a Conversion Event occurs with respect to a Foreign Currency
in which any of the Registered Securities are payable, then with respect to
each date for the payment of principal of (and premium, if any) and
interest on such Registered Securities occurring after the last date on
which such Foreign Currency was used, the Company may make such payment in
Dollars. The Dollar amount to be paid by the Company to the Trustee and by
the Trustee or any Paying Agent to the Holders of such Registered
Securities with respect to such payment date shall be determined by the
Currency Determination Agent on the basis of the Market Exchange Rate. Any
payment in respect of such Security made under such circumstances in
Dollars will not constitute an Event of Default hereunder.
(e) For purposes of this Indenture the following terms shall have the
following meanings:
A "Component Currency" shall mean any currency which is
a component currency of any composite currency, including, without
limitation, the ECU.
"Election Date" shall mean, for any Registered
Security, the date specified pursuant to Section 301(7).
(f) Notwithstanding any other provisions of this Section 311, the
following shall apply: (i) if the official unit of any Component Currency
is altered by way of combination or subdivision, the number of units of
that currency as a component shall be divided or multiplied in the same
proportion, (ii) if two or more Component Currencies are consolidated into
a single currency, the amounts of those currencies as components
<PAGE>
41
shall be replaced by an amount in such single currency equal to the sum of
the amounts of the consolidated Component Currencies expressed in such
single currency, (iii) if any Component Currency is divided into two or
more currencies, the amount of that original Component Currency as a
component shall be replaced by the amounts of such two or more currencies
having an aggregate value on the date of division equal to the amount of
the former Component Currency immediately before such division and (iv) in
the event of an official redenomination of any currency (including without
limitation, a composite currency), the obligations of the Company to make
payments in or with reference to such currency on any Registered Securities
shall, in all cases, be deemed immediately following such redenomination to
be obligations to make payments in or with reference to that amount of
redenominated currency representing the amount of such currency immediately
before such redenomination.
(g) All determinations referred to in this Section 311 made by the
Currency Determination Agent shall be in its sole discretion and shall, in
the absence of manifest error, be conclusive for all purposes and
irrevocably binding upon the Holders of the applicable Registered
Securities. The Currency Determination Agent shall promptly give written
notice to the Trustee of any such decision or determination. The Currency
Determination Agent shall have no liability for any determinations referred
to in this Section 311 made by it.
(h) The Trustee shall be fully justified and protected in relying and
acting upon information received by it from the Company and the Currency
Determination Agent with respect to any of the matters addressed in or
contemplated by this Section 311 and shall not otherwise have any duty or
obligation to determine such information independently.
SECTION 312. Appointment and Resignation of Successor
Currency Determination Agent.
(a) 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, a Currency Determination Agent. The Company will
cause the Currency Determination 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 for the
purpose of converting the issued currency into the applicable payment
<PAGE>
42
currency for the payment of principal and interest, if any, pursuant to Section
311.
(b) No resignation of the Currency Determination Agent and no appointment
of a successor Currency Determination Agent pursuant to this Section shall
become effective until the acceptance of appointment by the successor Currency
Determination Agent as evidenced by a written instrument delivered to the
Company and the Trustee accepting such appointment executed by the successor
Currency Determination Agent.
(c) If the Currency Determination Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Currency
Determination Agent for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a successor
Currency Determination Agent or Currency Determination Agents with respect to
the Securities of that or those series (it being understood that any such
successor Currency Determination Agent may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
only be one Currency Determination Agent with respect to the Securities of any
particular series).
SECTION 313. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
--------
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Securities of any
Series.
(a) The Company shall be deemed to have satisfied and discharged the
entire indebtedness on all the Securities of any particular series and, so long
as no Event of Default shall be continuing, the Trustee, upon Company Request
and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of such indebtedness, when:
(1) either
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43
(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) any 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 1107 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 the last paragraph of Section 1003) have
been delivered to the Trustee for cancellation; or
(B) except as otherwise specified pursuant to Section 301
for the Securities of such series, with respect to all Outstanding
Securities of such series described in (A) above (and, in the case of
(i), (ii) or (iii) below, any coupons appertaining thereto) not
theretofore delivered to the Trustee for cancellation:
(i) the Company has deposited or caused to be
deposited with the Trustee as trust funds in trust an amount
in the currency or currency unit 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 as provided in Sections 311(b) and 311(d), in
which case the deposit to be made with respect to Securities
for which an election has occurred pursuant to Section
311(b) or a Conversion Event has occurred as provided in
Section 311(d), shall be made in the currency or currency
unit in which such Securities are payable as a result of
such election or Conversion Event), sufficient to pay and
discharge the entire indebtedness on all such Outstanding
Securities of such series and any related coupons for
principal (and premium, if any) and interest, if any, to the
Stated Maturity, or any Redemption Date as contemplated by
Section 402, as the case may be; or
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(ii) the Company has deposited or caused to be
deposited with the Trustee as obligations in trust such
amount of Government Obligations as will, in a written
opinion of independent public accountants delivered to the
Trustee, together with the predetermined and certain income
to accrue thereon (without consideration of any reinvestment
thereof), be sufficient to pay and discharge when due the
entire indebtedness on all such Outstanding Securities of
such series and any related coupons for unpaid principal
(and premium, if any) and interest, if any, to the Stated
Maturity or any Redemption Date as contemplated by Section
402, as the case may be; or
(iii) the Company has deposited or caused to be
deposited with the Trustee such combination of trust funds
or obligations in trust pursuant to (i) and (ii) above,
respectively, as will, in a written opinion of independent
public accountants delivered to the Trustee, together with
the predetermined and certain income to accrue on such
obligations in trust, be sufficient to pay and discharge
when due the entire indebtedness on all such Outstanding
Securities of such series and any related coupons for unpaid
principal (and premium, if any) and interest, if any, to the
Stated Maturity or any Redemption Date as contemplated by
Section 402, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
with respect to the Securities of such series and any related coupons;
(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 the
entire indebtedness on all Securities of such series and any related
coupons have been complied with; and
(4) if the Securities of such series and any related coupons are not
to become due and payable at their Stated Maturity within one year of the
date of such deposit or are not to be called for redemption within one year
of the date of such deposit under arrangements satisfactory to the Trustee
as of the date of such deposit, then the Company shall have given, not
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45
later than the date of such deposit, notice of such deposit to the Holders
of the Securities of such series.
(b) Upon the satisfaction of the conditions set forth in this Section 401
with respect to all the Securities of any series, the terms and conditions of
such series, including the terms and conditions with respect thereto set forth
in this Indenture, shall no longer be binding upon, or applicable to, the
Company, and the Holders of the Securities of such series and any related
coupons shall look for payment only to the funds or obligations deposited with
the Trustee pursuant to Section 401(a)(1)(B); provided, however, that in no
event shall the Company be discharged from (a) any payment obligations in
respect of Securities of such series and any related coupons which are deemed
not to be Outstanding under clause (c) of the definition thereof if such
obligations continue to be valid obligations of the Company under applicable
law, (b) from any obligations under Sections 402(b), 607, 610 and 1008 and (c)
from any obligations under Sections 304, 305 and 306 (except that Securities of
such series issued upon registration of transfer or exchange or in lieu of
mutilated, lost, destroyed or stolen Securities and any related coupons shall
not be obligations of the Company) and Sections 311, 701 and 1002; and provided,
further, that in the event a petition for relief under Title 11 of the United
States Code or a successor statute is filed and not discharged with respect to
the Company within 91 days after the deposit, the entire indebtedness on all
Securities of such series and any related coupons shall not be discharged, and
in such event the Trustee shall return such deposited funds or obligations as it
is then holding to the Company upon Company Request. Notwithstanding the
satisfaction of the conditions set forth in this Section 401 with respect to all
the Securities of any series not payable in Dollars, upon the happening of any
Conversion Event the Company shall be obligated to make the payments in Dollars
required by Section 311(d) to the extent that the Trustee is unable to convert
any Foreign Currency or currency unit in its possession pursuant to Section
401(a)(1)(B) into the Dollar equivalent of such Foreign Currency or currency
unit, as the case may be. If, after the deposit referred to in Section 401 has
been made, (x) the Holder of a Security is entitled to, and does, elect pursuant
to Section 311(b) to receive payment in a currency or currency unit other than
that in which the deposit pursuant to Section 401 was made, or (y) a Conversion
Event occurs as contemplated in Section 311(d), then the indebtedness
represented by such Security shall be fully discharged to the extent that the
deposit made with respect to such Security shall be converted into the currency
or currency unit in which such Security is payable. The Trustee shall return to
the Company any non-converted funds or securities in its possession after such
payments have been made.
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46
SECTION 402. Application of Trust Money.
(a) All money and obligations deposited with the Trustee pursuant to
Section 401 or Section 1009 shall be held irrevocably in trust and shall be made
under the terms of an escrow trust agreement in form and substance satisfactory
to the Trustee. Such money and obligations shall be applied by the Trustee, in
accordance with the provisions of the Securities, any coupons, this Indenture
and such escrow trust agreement, 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 of (and
premium, if any) and interest, if any, on the Securities for the payment of
which such money and obligations have been deposited with the Trustee. If
Securities of any series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the Company shall make such arrangements as
are satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
(b) The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against Government Obligations
deposited pursuant to Section 401 or Section 1009 or the interest and principal
received in respect of such Government Obligations other than any such tax, fee
or other charge which by law is payable by or on behalf of Holders. The
obligation of the Company under this Section 402(b) shall be deemed to be an
obligation of the Company under Section 607(2).
(c) Anything in this Article Four 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 held by it as provided in Section
401 or Section 1009 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
have been required to be deposited for the purpose for which such money or
Government Obligations were deposited or received.
SECTION 403. Satisfaction and Discharge of Indenture.
Upon compliance by the Company with the provisions of Section 401 as to the
satisfaction and discharge of each series of Securities issued hereunder, and if
the Company has paid or caused to be paid all other sums payable under this
Indenture, this Indenture shall cease to be of any further effect (except as
otherwise provided herein). Upon Company Request and receipt of an Opinion of
Counsel and an Officers' Certificate, the Trustee
<PAGE>
47
(at the expense of the Company) shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture.
Notwithstanding the satisfaction and discharge of this Indenture, any
obligations of the Company under Sections 304, 305, 306, 311, 402(b), 607, 610,
614, 701, 1002 and 1008 and the obligations of the Trustee under Section 402
shall survive.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by 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 any Security of that
series and any related coupon when it becomes due and payable, and
continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the making or satisfaction of any sinking fund payment
or analogous obligation when the same becomes due and payable by the terms
of any Security of that series, and continuance of such default for a
period of 30 days; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in respect of the Securities of that series
contained in this Indenture (other than a covenant or warranty in respect
of the Securities of such series, a default in the performance of which or
the breach of which is elsewhere in this Section specifically dealt with or
which has expressly been included in this Indenture solely for the benefit
of series of Securities other than that series), or established in or
pursuant to the authority granted in the Board Resolution or in the
supplemental indenture under which such series of Securities is issued, as
the case may be, as contemplated by Section 301, and continuance of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
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48
Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of it in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or
(7) any other Event of Default provided in the applicable Board
Resolution or in the supplemental indenture under which such series of
Securities is issued, as the case may be, as contemplated by Section 301.
<PAGE>
49
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Securities of any series and any
related coupons at the time outstanding occurs and is continuing, then in every
such case, unless the principal of all of the Securities of such series shall
have already become due and payable, the Trustee or the Holders of not less than
25% in principal amount of the Outstanding Securities of that series may declare
the principal amount (or if any Securities of that series are (i) Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of those Securities, or (ii) Indexed Securities or Dual Currency
Securities, the amount determined in accordance with the specified terms of
those Securities) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained and entered 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 or currency unit 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 as provided in
Sections 311(b) and 311(d)),
(A) all overdue interest, if any, on all Securities of that
series and any related coupons,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the Overdue Rate
applicable to that series,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the Overdue Rate applicable to that
series, and
(D) all sums paid or advanced by the Trustee hereunder and
the compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
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and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series,
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if,
(1) default is made in the payment of any interest on any security of
any series and any related coupons when such interest becomes due and
payable and such default continues for a period of 30 days,
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at the Maturity thereof, or
(3) default is made in the making or satisfaction of any sinking fund
payment or analogous obligation when the same becomes due pursuant to the
terms of the Securities of any series and such default continues for a
period of 30 days,
then the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities and coupons, the whole amount then due and
payable on such Securities and coupons for principal (and premium, if any) and
interest, if any, with interest upon the overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue instalment of interest, at the Overdue Rate of any such
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the
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51
manner provided by law out of the property of the Company or any other obligor
upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of 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 of any series 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 such 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 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 of principal
(or, if the Securities of such series are Original Issue Discount
Securities, Indexed Securities or Dual Currency Securities, such amount as
may be due and payable with respect to such Securities pursuant to a
declaration in accordance with Section 502) (and premium, if any) and
interest, if any, owing and unpaid in respect of the Securities of such
series and any related coupons 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 of the Securities of such series and any related coupons
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 and coupons to make such payments to the Trustee and,
in the event
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52
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities and coupons, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons of any series 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.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or coupons.
All rights of action and claims under this Indenture or the Securities or
coupons of any series may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons of such series 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, if any, upon presentation of the several Securities or
coupons, or both, as the case may be, with respect to which such moneys were
collected, and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid upon such
Securities and coupons for principal of (and premium, if any) and interest,
if any, in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and
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53
payable on such Securities and coupons for principal (and premium, if any)
and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless,
(1) an Event of Default shall have occurred and be continuing and
such Holder has previously given written notice to the Trustee of such
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
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54
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
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, in the currency or currency unit herein prescribed, of the
principal of (and premium, if any) and (subject to Section 307) interest, if
any, on such Security on the Stated Maturities 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, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities and coupons shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or 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 Securities of any
series and any related coupons 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 such Holders
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55
of Securities or coupons may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by such Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided, that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) such direction would not involve the Trustee in any personal
liability (unless the Trustee is indemnified to its reasonable
satisfaction), and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series and any related coupons may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of such series, or in the payment of any
sinking fund instalment or analogous obligation with respect to the
Securities of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
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56
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder of any Security or coupon for the enforcement of the payment of the
principal of (or premium, if any) or interest, if any, on any Security or the
payment of any coupon on or after the Stated Maturities expressed in such
Security or coupon (or, in the case of redemption, on or after the Redemption
Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 516. Judgment Currency.
If for the purpose of obtaining a judgment in any court with respect to any
obligation of the Company hereunder or under any Security or any related coupon
it shall become necessary to convert into any other currency or currency unit
any amount in the currency or currency unit due hereunder or under such Security
or coupon, then such conversion shall be made at the spot rate of exchange
prevailing on the date the Company shall make payment to any Person in
satisfaction of such judgment. If pursuant to any such judgment, conversion
shall be made on a date other than the date payment is made and there shall
occur a change between such spot rate of exchange and the spot rate of
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57
exchange prevailing on the date of payment, the Company agrees to pay such
additional amounts (if any) as may be necessary to ensure that the amount paid
is equal to the amount in such other currency or currency unit which, when
converted at the spot rate of exchange prevailing on the date of payment or
distribution, is the amount then due hereunder or under such Security or coupon.
Any amount due from the Company under this Section 516 shall be due as a
separate debt and is not to be affected by or merged into any judgment being
obtained for any other sums due hereunder or in respect of any Security or
coupon. In no event, however, shall the Company be required to pay more in the
currency or currency unit due hereunder or under such Security or coupon at the
spot rate of exchange prevailing when payment is made than the amount of
currency or currency unit stated to be due hereunder or under such Security or
coupon so that in any event the Company's obligations hereunder or under such
Security or coupon will be effectively maintained as obligations in such
currency or currency unit, and the Company shall be entitled to withhold (or be
reimbursed for, as the case may be) any excess of the amount actually realized
upon any such conversion over the amount due and payable on the date of payment
or distribution.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with respect to
any series of Securities,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture with respect to each series
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of Securities for which it acts as Trustee and with respect to which an Event of
Default is continuing, and with respect to such series of Securities use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers.
(d) Whether or not therein expressly so provided, every provision of this
Indenture (except Section 603(b) hereof) relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
SECTION 602. Notice of Defaults.
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 Section 703(c) and shall publish in the manner and to the
extent provided in Section 106, 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, if any, on any Security of such series or in the
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59
payment of any sinking fund instalment or analogous obligation with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders of Securities of such series and any related coupons; and provided,
further, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof.
SECTION 603. Certain Rights of Trustee.
(a) Subject to the provisions of Section 601:
(i) 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, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(iii) 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;
(iv) the Trustee may consult with counsel of its selection 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;
(v) 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 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
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which might be incurred by it in compliance with such request or direction;
(vi) 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, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(vii) 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
(viii) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
(b) The Trustee shall not be charged with knowledge of any Event of
Default with respect to the Securities of any series for which it is acting as
Trustee unless either (1) a Responsible Officer of the Trustee assigned to the
department of the Trustee specified for such purpose in Section 615 shall have
actual knowledge of the Event of Default or (2) written notice of such Event of
Default shall have been given to the Trustee at the place so specified in
Section 615 by the Company and any other obligor on such Securities or by any
Holder of such Securities.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, and in any coupons shall be taken as the
statements of the Company, and the Trustee or any Authenticating Agent assumes
no responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities of any
series or coupons. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Securities of any
series or the proceeds thereof.
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SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to each of the Trustee and any predecessor Trustee from
time to time such compensation in Dollars for all services rendered by it
hereunder as may be mutually agreed in writing between the Company and the
Trustee (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee in Dollars for the Securities of any series upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and each predecessor Trustee in Dollars
for the Securities of any series for, and to hold it harmless against, any
and all loss, damage, claims, liability or expense, including taxes (other
than taxes based on the income of the Trustee) incurred without negligence
or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including
the costs and expenses of defending itself against any claim or liability
in connection with the
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62
exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section 607, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Securities.
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.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee for the Securities shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act during the period of time required
thereby. Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the penultimate paragraph of Section
310(b) of the Trust Indenture Act. In determining whether the Trustee has a
conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded Securities
of any particular series of Securities other than that series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal, State
or District of Columbia authority and having its Corporate Trust Office in the
Borough of Manhattan, The City of New York, or in such other city as shall be
specified as contemplated by Section 301 with respect to any series of
Securities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company shall serve as Trustee
upon any Securities. If at any
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time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
such removal, the Trustee so removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act pursuant to Section 608 hereof with respect to Securities of
any series after written request therefor by the Company or by any Holder
of Securities of such series who has been a bona fide Holder of a Security
of such series for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting with respect to
Securities of any series 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
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Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to Securities of such series, or (ii) subject to Section
514, any Holder of a Security of such series who has been a bona fide Holder of
such 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 Securities of such series and the appointment of
a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
and to the extent provided in Section 106. Each notice shall include the name
of the successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
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(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and,
subject to Section 607, shall duly assign, transfer and deliver to such
successor Trustee afl property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and 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.
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(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee or Authenticating Agent then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee or Authenticating Agent may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee or successor Authenticating Agent had itself authenticated
such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and coupons and the holders of other indenture securities, as defined
in Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this Subsection, or from the exercise of any right
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of set-off which the Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Company upon the date of such
default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or com-
position thereof, or otherwise, after the beginning of such three months'
period, or in amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Company) who
is liable thereon, and (ii) the proceeds of the bona fide sale of any
such claim by the Trustee to a third Person, and (iii) distributions
made in cash, securities or other property in respect of claims filed
against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act, as defined
in Subsection (c) of this Section, or applicable State law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such three months' period;
(C) to realize, for its own account, but only to the extent
of the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three months' period and such property was received
as security therefor simultaneously with the creation thereof, and if
the Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to
believe that a default, as defined in Subsection (c) of this Section,
would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held as
security for such claim as provided in paragraph (B) or (C), as the
case may be, to the extent of the fair value of such property.
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For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three months' period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any preexisting
claim of the Trustee as such creditor, such claim shall have the same status as
such preexisting claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee and the Holders and the holders of
other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or
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otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
three months' period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had continued
as Trustee, occurred after the beginning of such three months' period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended,
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which is directly or indirectly a creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper, as defined in Subsection (c) of
this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable,
(2) the term "other indenture securities" means any securities upon
which the Company is an obligor outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation;
(5) the term "Company" means any obligor upon the Securities of any
series; and
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(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act of
1978 or Title II of the United States Code or any successor statute
thereto.
SECTION 614. 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 thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
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, in the case of any series of Securities denominated and payable
solely in Dollars, such Authenticating Agent shall be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall provide notice of such
appointment to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve in the manner and to the extent provided in
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. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
_____________________________,
As Trustee
By___________________________,
As Authenticating Agent
By____________________________
Authorized Officer
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee with
respect to the Securities of any series (a) semi-annually, on a date not more
than 5 days after each Regular Record Date with respect to an Interest Payment
Date, if any, for the Securities of such series, (b) on semi-annual dates in
each year to be determined pursuant to Section 301 if the Securities of such
series do not bear interest and (c) at such other times as such Trustee may
request in writing, within 30 days after receipt by the Company of any such
request, a list in such form as such Trustee may reasonably require containing
all the information in the possession or control of the Company, or any of its
Paying Agents other than such Trustee, as to the names and addresses of the
Holders of the Securities of such series, obtained since the date as of which
the next previous list, if any, was furnished. Any such list may be dated as of
a date not more than 15 days prior to the time such information is furnished or
caused to be furnished and need not include information received after such
date; provided, however, that as long as such Trustee is the Securities
Registrar for such series, no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities of each series
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities of such series
received by the Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") of
Securities of any series apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of such series with respect to their rights under
this Indenture or under the Securities of such series and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five business days after the receipt
of such application, at its election, either
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(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders of such series whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 702(a), and
as to the approximate cost of mailing to such Holders of such series the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Securities of such series whose name and address appear
in the information preserved at the time by the Trustee in accordance with
Section 702(a) a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interest of such Holders or would be in violation of
applicable law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the renewal
of such tender, otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 702(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under Section
702(b).
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SECTION 703. Reports by Trustee.
(a) On or before the date provided therefor in Section 705 of this
Indenture with respect to Securities of any series, so long as Securities of
such series are outstanding hereunder, the Trustee for such series shall
transmit by mail to all Holders of Securities of such series, as provided in
Subsection (c) of this Section, a brief report dated as of a date 60 days
preceding such date with respect to any of the following events which may have
occurred within the prior 12 months (but if no such event has occurred within
such period no report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualification under Section 608;
(2) the creation of any material change to a relationship specified
in Section 310(b)(1) through Section 310(b)(10) of the Trust Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Securities of any series, on any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal amount
of the Securities Outstanding on the date of such report;
(4) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Securities of any series) to the Trustee in its individual capacity, on the
date of such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 613(b)(2), (3), (4)
or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee, as such, on the date of such report;
(6) any additional issue of Securities of such series which the
Trustee has not previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities of any series, except action in
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respect of a default, notice of which has been or is to be withheld by the
Trustee in accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders of the Securities of
any series, as provided in Subsection (c) of this Section, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or, if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Securities of such series, on property or funds held or collected by it as
Trustee and which it has not previously reported pursuant to this Subsection,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate 10% or less of
the principal amount of the Securities of such series Outstanding at such time,
such report to be transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders appear in the Security Register;
(2) to such Holders of the Securities as have, within the two years
preceding such transmission, filed their names and addresses with the
Trustee for that purpose; and
(3) except in the case of reports pursuant to Subsection (b) of this
Section, to each Holder of a Security whose name and address is preserved
at the time by the Trustee, as provided in Section 702(a).
(d) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when and as any Securities become listed on any
stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(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
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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 said Sections, then
it shall 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, within 30 days after the filing thereof with the
Trustee, to the Holders of Securities, in the manner and to the extent
provided in Section 703(c) with respect to reports pursuant to Section
703(a), 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.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms.
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The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest, if any, (including all
Additional Amounts, if any, payable pursuant to Section 1008) on all the
Securities and any related coupons and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company or
such successor corporation or Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby;
(4) the successor corporation assuming the Securities and coupons
shall have agreed, by supplemental indenture, to indemnify the individuals
liable therefor for the amount of United States Federal estate tax paid
solely as a result of such assumption in respect of Securities and coupons
held by
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individuals who are not citizens or residents of the United States at the
time of their death; and
(5) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, complies
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture, the Securities and any related
coupons.
SECTION 803. Opinion of Counsel to be Given Trustee.
The Trustee shall be entitled to receive and, subject to Sections 601 and
603, shall be fully protected in relying upon an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, conveyance or
lease and any such assumption complies with the provisions of this Article
Eight.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders of Securities or coupons, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any
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such successor of the covenants of the Company herein and in the
Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities and any related coupons (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; or
(4) to add to or to 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, to provide for the issuance of uncertificated Securities of
any series in addition to or in place of any certificated Securities and to
make all appropriate changes for such purposes; 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 secure the Securities pursuant to the requirements of Section
1005 or otherwise; 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 or to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
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(9) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 401 or 1009,
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; or
(10) to add to or change or eliminate any provisions of this
Indenture as shall be necessary or desirable in accordance with any
amendments to the Trust Indenture Act, provided such action shall not
adversely affect the interests of the Holders of Securities of any series
and any related coupons in any material respect; or
(11) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, provided such action shall not adversely affect the
interests of the Holders of Securities of any series and any related
coupons in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders of Securities of such series and any related coupons
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or change any obligation of the Company to pay
Additional Amounts pursuant to Section 1008 (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 adversely affect the right of repayment
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or repurchase, if any, at the option of the Holder, or reduce the amount
of, or postpone the date fixed for, any payment under any sinking fund or
analogous provisions for any Security, or change any Place of Payment
where, or the coin or currency or currency unit in which, any Security or
any premium or the interest, if any, thereon is payable, or change or
eliminate the rights of a Holder under Section 311(b), or impair the right
to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirements of Section 1304 for quorum or voting,
or
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 1002, or
(4) modify any of the provisions of this Section, Section 513 or
Section 1007, 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 or to each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to require
the consent of any Holder of a Security or coupon with respect to changes
in the references to "the Trustee" and concomitant changes in this Section
and Section 1007 in accordance with the requirements of Sections 611(b) and
901(8) or with respect to the deletion of this proviso.
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 one or more such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that such supplemental indenture,
when executed and delivered by the Company, will constitute a valid and binding
obligation of the Company in accordance with its terms. 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, but only with respect to
the Securities of each series and any related coupons affected by such
supplemental indenture, and such supplemental indenture shall form a part of
this Indenture for all purposes with respect to such series; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder and
of any coupons appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series and any related coupons so modified as to conform,
in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series
and any related coupons.
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SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the appropriate Trustee of
any supplemental indenture pursuant to Section 902, the Company shall transmit
to all Holders of any series of the Securities affected thereby, in the manner
and to the extent provided in Section 106, a notice setting forth in general
terms the substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay in the currency or currency unit
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
as provided in Sections 311(b) and 311(d)) the principal of (and premium, if
any) and interest, if any, on the Securities of that series in accordance with
the terms of such Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on Bearer Securities on or
before Maturity shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced thereby as they
severally mature. The interest, if any, due in respect of any temporary or
permanent global Security, together with any Additional Amounts payable in
respect thereof, as provided in the terms and conditions of such Security, shall
be payable, subject to the conditions set forth in Section 1008, only upon
presentation of such Security to the Trustee for notation thereon of the payment
of such interest.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain (A) in the Borough of Manhattan, The City of New York, an office or
agency where any Registered Securities of that series may be presented or
surrendered for payment, where any Registered Securities of that series may be
surrendered for registration of transfer,
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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;
provided, however, that if the Securities of that series are listed on the 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 any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
in respect of any series of Securities or shall fail to furnish the Trustee with
the address thereof, such presentations, and surrenders of Securities of that
series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment at
the offices specified in the Security, and the Company hereby appoints the same
as its agent to receive such respective presentations, surrenders, notices and
demands.
No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
the Securities of a series are denominated and payable in Dollars, payment of
principal of and any premium and interest on any Bearer Security shall be made
at the office of the Company's Paying Agent in the Borough of Manhattan, The
City of New York, if, and only if, payment in Dollars of the full amount of such
principal, premium or interest, 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.
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The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in 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.
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, a Currency Determination 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 Securities and any related coupons, it will, on or before each
due date of the principal of (and premium, if any) or interest, if any, on 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 currency unit 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 as provided in Sections
311(b) and 311(d)) sufficient to pay the principal (and premium, if any) or
interest, if any, 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, prior to each due date of the
principal of (and premium, if any) or interest, if any, on any Securities of
that series, deposit with a Paying Agent for Securities of that series, a sum
(in the currency or currency unit described in the preceding paragraph)
sufficient to pay the principal (and premium, if any) or interest, if any, so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, if any, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree
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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 the principal of (and
premium, if any) or interest, if any, on Securities of that series in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest, if any, on the
Securities of that series; 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
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest, if any, on any Security of any series and remaining unclaimed for
two years after such principal (and premium, if any) or interest, if any, has
become due and payable shall, unless otherwise required by mandatory provisions
of applicable escheat or abandoned or unclaimed property law as determined by
the Company, be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security or
any coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be transmitted once, in
the manner and to the extent provided in Section 106, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
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SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Limitation on Liens on Common Stock of Designated
Subsidiaries.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, so long as any Securities of any series shall remain Outstanding,
the Company will not, and will not permit any Designated Subsidiary to, directly
or indirectly, create, issue, assume, incur or guarantee any indebtedness for
money borrowed which is secured by a mortgage, pledge, lien, security interest
or other encumbrance of any nature on any of the present or future common stock
of a Designated Subsidiary unless the Securities and, if the Company so elects,
any other indebtedness of the Company ranking at least pari passu with the
Securities, shall be secured equally and ratably with (or prior to) such other
secured indebtedness for money borrowed so long as it is outstanding.
SECTION 1006. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an officers'
certificate of the principal executive officer, principal financial or principal
accounting officer of the Company, stating whether or not to the best knowledge
of the signers thereof the Company is in default in the performance and
observance of any of the terms, provisions and conditions of this Indenture and,
if the Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge. For purposes of this
Section 1006, any such default shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.
In addition, the Company shall file with the Trustee written notice of the
occurrence of any default or Event of Default within five Business Days of its
becoming aware of any such default or Event of Default.
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SECTION 1007. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 1005 or 1008 with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
SECTION 1008. Payment of Additional Amounts.
If specified pursuant to Section 301, the provisions of this Section 1008
shall be applicable to Securities of any series.
The Company will pay to a Holder who is a United States Alien such
additional amounts (the "Additional Amounts") as may be necessary so that every
net payment of principal of (and premium, if any) and interest on any Security
or of any coupon appertaining thereto, after deduction or withholding for or on
account of any present or future tax, assessment or other governmental charge
imposed upon such Holder, or by reason of the making of such payment, by the
United States or any taxing authority thereof or therein, will not be less than
the amount provided for in such Security or in such coupon to be then due and
payable. The Company shall not be required, however, to make any payment of any
Additional Amounts for or on account of:
(A) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former
connection between such holder (or between a fiduciary, settlor,
beneficiary of, member or shareholder of, or possessor of a power
over, such Holder, if such Holder is an estate, trust, partnership or
corporation) and the United States, including, without limitation,
such Holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or resident
or treated as a resident thereof or being or having been engaged in
trade or business or present therein, or having or having had a
permanent establishment therein, or (ii) the presentation of a
Security or any coupon appertaining thereto for payment on a date more
than 10 days after the date on which such payment
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becomes due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(B) any estate, inheritance, gift, sales, transfer, excise, personal
property or similar tax, assessment or other governmental charge;
(C) any tax, assessment or other governmental charge imposed by reason of
such Holder's past or present status as a passive foreign investment
company, a controlled foreign corporation, a personal holding company
or foreign personal holding company with respect to the United States,
or as a corporation which accumulates earnings to avoid United States
Federal income tax;
(D) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payment of principal of (or
premium, if any) or interest on, such Security or coupon;
(E) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of (or
premium, if any) or interest on, any Security or coupon if such
payment can be made without withholding by any other paying agent;
(F) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with certification,
information, documentation or other reporting requirements concerning
the nationality, residence, identity or connections with the United
States of the Holder or beneficial owner of such Security or coupon,
if such compliance is required by statute or by regulation of the
United States Treasury Department as a precondition to relief or
exemption from such tax, assessment or other governmental charge;
(G) any tax, assessment or other governmental charge imposed on interest
received by (i) a 10% shareholder (as defined in Section 871(h)(3)(B)
of the Code and the regulations that may be promulgated thereunder) of
the Company or (ii) a controlled foreign corporation with respect to
the Company within the meaning of the Code; or
(H) any combination of items (a), (b), (c), (d), (e), (f) and (g);
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nor shall any Additional Amounts be paid to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of such Security or a coupon
appertaining thereto to the extent that a beneficiary or settlor with respect to
such fiduciary, or a member of such partnership or a beneficial owner thereof
would not have been entitled to the payment of such Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the Holder of the
Securities or any coupon appertaining thereto.
The term "United States Alien" means any corporation, partnership,
individual or fiduciary that is, as to the United States, a foreign corporation,
a nonresident alien individual, a nonresident fiduciary of a foreign estate or
trust, or a foreign partnership one or more of the members of which is, as to
the United States, a foreign corporation, a nonresident alien individual or a
nonresident fiduciary of a foreign estate or trust.
Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of (or premium, if any) or interest on any Security or payment
with respect to any coupon of any series, such mention shall be deemed to
include mention of the payment of Additional Amounts provided for in the terms
of such Securities and this Section to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section and express mention of the payment of Additional
Amounts (if applicable) in any provisions hereof shall not be construed as
excluding Additional Amounts in those provisions hereof where such express
mention is not made.
SECTION 1009. Defeasance of Certain Obligations.
(a) If specified pursuant to Section 301 to be applicable to the
Securities of any series, the Company may omit to comply with any term,
provision or condition set forth in Section 801, Section 1005 and any other
covenant not set forth herein and specified pursuant to Section 301 to be
applicable to the Securities of such series and subject to this Section 1009,
and any such omission with respect to such Sections shall not be an Event of
Default, in each case with respect to the Securities of such series, provided,
however, that the following conditions have been satisfied:
(1) with respect to all Outstanding Securities of such series and any
coupons appertaining thereto not theretofore delivered to the Trustee for
cancellation,
(i) the Company has deposited or caused to be deposited
with the Trustee as trust funds in trust an amount in the currency or
currency unit in which the Securities of such series are payable
(except as otherwise specified pursuant to Section
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301 for the Securities of such series and except as provided in
Sections 311(b) and 311(d), in which case the deposit to be made with
respect to Securities for which an election has occurred pursuant to
Section 311(b) or a Conversion Event has occurred as provided in
Section 311(d), shall be made in the currency or currency unit in
which such Securities are payable as a result of such election or
Conversion Event), sufficient to pay and discharge the entire
indebtedness on all such Outstanding Securities of such series and any
related coupons for principal (and premium, if any) and interest to
the Stated Maturity or any Redemption Date as contemplated by Section
402, as the case may be; or
(ii) the Company has deposited or caused to be deposited
with the Trustee as obligations in trust such amount of Government
Obligations as will, in a written opinion of independent public
accountants delivered to the Trustee, together with the predetermined
and certain income to accrue thereon (without consideration of any
reinvestment thereof), be sufficient to pay and discharge when due the
entire indebtedness on all such Outstanding Securities of such series
and any related coupons for unpaid principal (and premium, if any) and
interest, if any, to the Stated Maturity or any Redemption Date as
contemplated by Section 402, as the case may be; or
(iii) the Company has deposited or caused to be deposited
with the Trustee such combination of trust funds or obligations in
trust pursuant to (i) and (ii) above, respectively, as will, in a
written opinion of independent public accountants delivered to the
Trustee, together with the predetermined and certain income to accrue
on such obligations in trust, be sufficient to pay and discharge when
due the entire indebtedness on all such Outstanding Securities of such
series any related coupons for principal (and premium if any) and
interest to the Stated Maturity or any Redemption Date as contemplated
by Section 402, as the case may be;
(2) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(3) no Event of Default or event which with the giving of notice or
lapse of time, or both, would become an Event of Default with respect to
the
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Securities of that series shall have occurred and be continuing on the date
of such deposit and no Event of Default under Section 501(6) or Section
501(7) or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under Section 501(6) or Section 501(7)
shall have occurred and be continuing on the 91st day after such date; and
(4) 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 defeasance contemplated in the Section
have been complied with.
(b) Notwithstanding the satisfaction of the conditions set forth in this
Section 1009 with respect to all the Securities of any series not payable in
Dollars, upon the happening of any Conversion Event the Company shall be
obligated to make the payments in Dollars required by Section 311(d) to the
extent that the Trustee is unable to convert any Foreign Currency or currency
unit in its possession under Section 1009(a) into the Dollar equivalent of such
Foreign Currency or currency unit, as the case may be. If, after the deposit
referred to in Section 1009(a) has been made, (x) the Holder of a Security is
entitled to, and does, elect pursuant to Section 311(b) to receive payment in a
currency or currency unit other than that in which the deposit under Section
1009(a) was made, or (y) a Conversion Event occurs as contemplated in Section
311(d), then the indebtedness represented by such Security shall be fully
discharged to the extent that the deposit made with respect to such Security
shall be converted into the currency or currency unit in which such Security is
payable. The Trustee shall return to the Company any non-converted funds or
securities in its possession after such payments have been made.
All the obligations of the Company under this Indenture with respect to the
Securities of such series, other than with respect to Section 801, Section 1005,
and any other covenant not set forth herein and specified pursuant to Section
301 to be applicable to the Securities of such series and subject to this
Section 1009, shall remain in full force and effect. Anything in this Section
1009 to the contrary notwithstanding, the Trustee for any series of Securities
shall deliver or pay to the Company, from time to time upon Company Request, any
money or Government Obligations held by it as provided in this Section 1009
which, as expressed in a written opinion of independent public accountants
delivered to such Trustee, are in excess of the amount thereof which would have
been required to be deposited for the purpose for which such money or Government
Obligations were deposited or received, provided such delivery can be made
without liquidating any Government Obligations.
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SECTION 1010. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities as
of the end of such year.
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. Tax Redemption; Special Tax Redemption.
(a) Unless otherwise specified pursuant to Section 301, Securities of any
series may be redeemed at the option of the Company in whole, but not in part,
on not more than 60 days' and not less than 30 days' notice, on any Redemption
Date at the Redemption Price specified pursuant to Section 301, if the Company
determines that as a result of any change in or amendment to the laws or
treaties, or any regulations or rulings promulgated thereunder, of the United
States or of any political subdivision or taxing authority thereof or therein
affecting taxation, or any proposed change in such laws, treaties or regulations
or rulings, or any change in the official application, enforcement or
interpretation of such laws, treaties or regulations or filings (including a
holding by a court of competent jurisdiction in the United States) or any other
action (other than an action predicated on law generally known on or before the
date specified in such Security except for proposals before the Congress before
such date) taken by any taxing authority or a court of competent jurisdiction in
the United States, or the official proposal of any such action, whether or not
such action or proposal was taken or made with respect to the Company, (A) the
Security has or will become obligated to pay such Additional Amounts pursuant to
Section 1008 on any Security or coupon or (B) there is a substantial possibility
that the Company will be required to pay such Additional Amounts. Prior to the
publication of any notice of redemption pursuant to this Section 1102(a), the
Company shall deliver to the Trustee (i) an Officers' Certificate stating that
the Company is entitled to effect such redemption and setting forth a statement
of facts showing that the conditions precedent to the right of the Company so to
redeem have occurred, and (ii) an Opinion of Counsel to
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such effect based on such statement of facts. Notice may not be given prior to
60 days before the date on which the Company will or, if applicable, there is a
substantial possibility that the Company will, become obligated to pay such
Additional Amounts if a payment of interest were to be made on such date.
(b) Unless otherwise specified pursuant to Section 301, if the Company
shall determine that any payment made outside the United States by the Company
or any of its Paying Agents in respect of any Bearer Security which is not a
Floating Rate Security (an "Affected Security") would, under any present or
future laws or regulations of the United States, be subject to any
certification, documentation, information or other reporting requirement of any
kind, the effect of which requirement is the disclosure to the Company, any
Paying Agent or any governmental authority of the nationality, residence or
identity of a beneficial owner of such Affected Security that is a United States
Alien (other than such a requirement (i) that would not be applicable to a
payment made by the Company or any one of its Paying Agents (A) directly to the
beneficial owner or (B) to a custodian, nominee or other agent of the beneficial
owner, or (ii) that can be satisfied by such custodian, nominee or other agent
certifying to the effect that the beneficial owner is a United States Alien;
provided that, in any case referred to in clause (i)(B) or (ii), payment by the
custodian, nominee or agent to the beneficial owner is not otherwise subject to
any such requirement), the Company shall elect either (x) (A) in the case of
Affected Securities that are Original Issue Discount Securities, to permit the
Holders of such Affected Securities to elect, but only if done within 90 days
after publication of the Determination Notice as hereunder provided, to
surrender the same for redemption in whole but not in part at the Redemption
Price, and (B) in the case of any other Affected Securities, to redeem such
Affected Securities as a whole but not in part, at the Redemption Price, or (y)
if the conditions of the next succeeding paragraph are satisfied, to pay the
Additional Amounts specified in such paragraph. The Company shall make such
determination as soon as practicable and publish prompt notice thereof (the
"Determination Notice"), stating the effective date of such certification,
documentation, information or reporting requirement, whether the Company elects
to redeem (or, in the case of Original Issue Discount Securities, permit the
Holders to elect to surrender for redemption) the Affected Securities or to pay
the Additional Amounts specified in the next succeeding paragraph, and (if
applicable) the last date by which the redemption of the Affected Securities
must take place. If the Affected Securities are to be redeemed pursuant to this
paragraph, the redemption shall take place on such date, no later than one year
after the publication of the Determination Notice, as the Company shall specify
by notice to the Trustee at least 60 days before the Redemption Date. Notice of
such redemption of the Affected Securities shall be given to the Holders of
Affected Securities not more than 60 days nor less than 30 days prior to the
Redemption Date. Notwithstanding the foregoing, the Company
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shall not so redeem (or, in the case of Original Issue Discount Securities,
permit the Holders to elect to surrender for redemption) the Affected Securities
if the Company shall subsequently determine, not less than 30 days prior to the
Redemption Date, that subsequent payments on the Affected Securities would not
be subject to any such certification, documentation, information or other
reporting requirement, in which case the Company shall publish prompt notice of
such subsequent determination and any earlier redemption notice shall be revoked
and be of no further effect.
If and so long as the certification, documentation, information or other
reporting requirement referred to in the preceding paragraph would be fully
satisfied by payment of a backup withholding tax or similar charge, the Company
may elect to pay such Additional Amounts as may be necessary so that every net
payment made outside the United States following the effective date of such
requirement by the Company or any of its Paying Agents in respect of any
Affected Security of which the beneficial owner is a United States Alien (but
without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Company, any Paying Agent or any
governmental authority), after deduction or withholding for or on account of
such backup withholding tax or similar charge (other than a backup withholding
tax or similar charge which (i) would not be applicable in the circumstances
referred to in the parenthetical clause of the first sentence of the preceding
paragraph, or (ii) is imposed as a result of presentation of any such Affected
Security for payment more than 15 days after the date on which such payment
became due and payable or on which payment thereof was duly provided for,
whichever occurs later), will not be less than the amount provided in any such
Affected Security to be then due and payable. If the Company elects to pay
Additional Amounts pursuant to this paragraph, the Company shall have the right
to redeem (or, in the case of Original Issue Discount Securities, permit the
Holders to elect, but only for the period of 30 days after the publication of
notice of the redemption as hereinafter provided, to surrender for redemption)
the Affected Securities as a whole, but not in part, at any time at the
Redemption Price, subject to the provisions of the last two sentences of the
immediately preceding paragraph. If the Company has made the determination
described in the preceding paragraph with respect to certification,
documentation, information or other reporting requirements applicable only to
interest and subsequently makes a determination in the manner and of the nature
referred to in such preceding paragraph with respect to such requirements
applicable to principal, the Company will redeem the Affected Securities in the
manner and on the terms described in the preceding paragraph unless the Company
elects to have the provisions of this paragraph apply rather than the provisions
of the immediately preceding paragraph. If in such circumstances the Affected
Securities are to be redeemed, the Company shall have no obligation to pay
Additional Amounts pursuant to this paragraph with respect to principal, but
will be
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obligated to pay such Additional Amounts with respect to interest accrued and
unpaid to the date of such redemption. If the Company elects to pay Additional
Amounts pursuant to this paragraph and the condition specified in the first
sentence of this paragraph should no longer be satisfied, then the Company shall
redeem (or, in the case of Original Issue Discount Securities, permit the
Holders to elect, but only for the period of 30 days after publication of the
notice of redemption as hereinafter provided, to surrender for redemption) the
Affected Securities in whole, but not in part, at the Redemption Price subject
to the provisions of the last two sentences of the immediately preceding
paragraph. If the Company elects to, or is required to, redeem (or, in the case
of Original Issue Discount Securities, is required to permit Holders to elect or
surrender for redemption) the Affected Securities pursuant to the two
immediately preceding sentences, it shall publish in the manner and to the
extent provided in Section 106 prompt notice thereof. If the Affected
Securities are to be redeemed pursuant to this paragraph, the redemption shall
take place on such date, not later than one year after publication of the notice
of redemption, as the Company shall specify by notice to the Trustee at least 60
days prior to the Redemption Date. Any redemption payments made by the Company
pursuant to this paragraph shall be subject to the continuing obligation of the
Company to pay Additional Amounts pursuant to this paragraph.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
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 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by lot or such other method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or
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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 pursuant to Section 302 in the currency or currency
unit in which the Securities of such series are denominated. The portions of
the principal amount of Securities so selected for partial redemption shall be
equal to the minimum authorized denominations for Securities of such series
pursuant to Section 302 in the currency or currency unit in which the Securities
of such series are denominated or any integral multiple thereof, except as
otherwise set forth in the applicable form of Securities.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Except as otherwise provided herein, notice of redemption shall be given in
the manner provided in Section 106 not less than 30 nor more than 60 days prior
to the Redemption Date to each Holder of Securities to be redeemed.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities or portions thereof to
be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities, together in the case
of Bearer Securities with all coupons appertaining thereto, if any,
maturing after
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the Redemption Date, are to be surrendered for payment of the Redemption
Price,
(6) that the redemption is for a sinking fund, if such is the case,
(7) 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, and
(8) 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 on which such exchanges may be made.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money in
the currency or currency unit 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 as provided in Sections 311(b) and 311(d)) sufficient to
pay the Redemption Price of, and accrued interest, if any, on all the Securities
or portions thereof which are to be redeemed on that date.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities or
portions thereof so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, together with accrued
interest, if any, to the Redemption Date in the currency or currency unit 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 as provided
in Sections 311(b) and 311(d)), and from and after such date (unless the Company
shall default in the payment of the Redemption Price and accrued interest, if
any) such Securities or portions thereof shall cease to bear interest
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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 or specified portions thereof 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 unless otherwise specified as
contemplated by Section 301, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all coupons appertaining thereto 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 if there is furnished to it such
security or indemnity as it may require to save the Company 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 funds for the payment of any Security called for redemption shall not be
so provided for, the principal (and premium, if any) shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1108. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall
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execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without service charge, a new Registered 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.
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 Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Mandatory Sinking Fund Payments
with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part of
any mandatory sinking fund payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been previously
so credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such mandatory sinking
fund payment shall be reduced accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing 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
currency unit 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 as provided in Sections 311(b) and 311(d)) and the portion thereof,
if any, which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 45 days before each such mandatory
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such mandatory sinking fund payment date in the manner specified in Section
1104 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 1105. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1107 and 1108.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES
13
SECTION 1301. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article Thirteen 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 1302. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1301, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or in
London, as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 20 nor more then 180
days prior to the date fixed for the meeting.
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(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 1301, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 30 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London, for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1303. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (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 and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 1304. Quorum; Action.
The Persons entitled to vote a majority in 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
66 2/3% in principal amount of the Outstanding Securities of a series, then
the Persons entitled to vote 66 2/3% in principal amount of the Outstanding
Securities of such series shall constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities of such
series, be dissolved. In any other case the meeting may be adjourned for a
period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any
such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting.
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Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1302(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly 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 consent or waiver which this Indenture expressly provides
may be given by the Holders of not less than 66 2/3% in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly convened and at which a quorum is present as aforesaid only by the
affirmative vote of the Holders of 66 2/3% in principal amount of the
Outstanding Securities of that series; and provided, further, 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.
SECTION 1305. Determination of Voting Rights; Conduct and
Adjournment of Meetings.
(a) Notwithstanding any other provision 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
<PAGE>
105
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 1302(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 (or such other amount
as shall be specified as contemplated by Section 301) of 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 1302 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 1306. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of
<PAGE>
106
Securities of any series shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was given as provided in Section 1302 and, if
applicable, Section 1304. 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.
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE TO BE GIVEN BY PERSON
ENTITLED TO RECEIVE BEARER SECURITY
CERTIFICATE
-----------
[Insert Title or Sufficient Description of
Securities to be Delivered]
(the "Securities")
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by persons that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to the United States Federal income taxation regardless of its source
("United States persons"), (ii) are owned by United States person(s) that (a)
are foreign branches of a United States financial institution (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(1)(v) ("financial institutions")
purchasing for their own account or for resale, or (b) 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 the issuer or the issuer's agent that it 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) are owned by United
States or foreign financial institution(s) for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)) this is to further certify
that such financial institution has not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
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 undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the Securities held
by you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in
<PAGE>
2
the absence of any such notification it may be assumed that this certification
applies as of such date.
This certificate excepts and does not relate to $__________ of such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We understand that this certification is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceedings.
Date:_____________, 19__1/
-
By:___________________________________________________
As, or as agent for, the beneficial owner(s) of the
Securities to which this certificate relates.
- --------------------
1/ Not earlier than 15 days prior to the Exchange Date or
- -
Interest Payment Date to which the certification
relates.
<PAGE>
EXHIBIT B
FORM OF CERTIFICATION TO BE GIVEN
BY THE EUROCLEAR OPERATOR OR CEDEL
CERTIFICATE
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that, based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the principal
amount of the above-captioned Securities as of the date hereof,
[_______________] principal amount of these Securities (i) is owned by persons
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
persons"), (ii) is owned by United States persons that (a) are foreign branches
of United States financial institutions (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v) ("financial institutions")) purchasing for their own
account or for resale, or (b) acquired any Securities through foreign branches
of United States financial institutions on the date hereof (and in either case
(a) or (b), each such United States financial institution has agreed, on its own
behalf or through its agent, that we may advise the Issuer or the Issuer's agent
that it 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 institutions for
purposes of resale during the restricted period (as defined in U.S. Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7), and to the further effect that
United States or foreign financial institutions described in clause (iii) above
(whether or not also described in clause (i) or (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the temporary global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any such portion of the part submitted
herewith for exchange (or, if relevant, exercise of any rights or collection of
any interest) are no longer true and cannot be relied upon as of the date
hereof.
<PAGE>
2
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 understand that this certification is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceedings.
Date:____________, 19__2/
-
[Cedel]
By:___________________________
- --------------------
2/ Not earlier than the relevant Exchange Date or Interest
- -
Payment Date to which the certification relates.
Exhibit 4(p)
------------
LEHMAN BROTHERS INC.
% NOTE DUE
Number R- $
Cusip
See Reverse for Certain Definitions
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
LEHMAN BROTHERS INC., a corporation duly organized and existing under
the laws of the State of Delaware (herein referred to as the "Company"), for
value received, hereby promises to pay to CEDE & CO. or registered assigns, at
the office or agency of the Company in the Borough of Manhattan, The City of New
York, the principal sum of Dollars on
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months), semiannually on and of each year, commencing
, on said principal sum at said office or agency, in like coin or
currency, at the rate per annum specified in the title of this Note from the
or the , as the case may be, next preceding the date of this
Note to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Note, or, if no interest has been paid or duly
provided for on the Notes, from
<PAGE>
2
until payment of said principal sum has been made or duly
provided for.
The interest so payable on any or will, subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Note is registered at the close
of business on the last day of the calendar month preceding such or
. Interest may, at the option of the Company, be paid by check mailed to
the person entitled thereto at such person's address as it appears on the
registry books of the Company.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON
THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
<PAGE>
3
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, LEHMAN BROTHERS INC. has caused this instrument to
be signed by its Chairman of the Board, its Vice Chairman, its President, its
Chief Financial Officer, one of its Vice Presidents or its Treasurer by manual
or facsimile signature under its corporate seal, attested by its Secretary or
one of its Assistant Secretaries by manual or facsimile signature.
Dated: LEHMAN BROTHERS INC.
By: _______________________
Title:
[SEAL]
Attest: _______________________
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
__________________________,
as Trustee
By________________________
Authorized Signatory
<PAGE>
4
This Note is one of a duly authorized series of Notes of the Company
designated as the % Notes Due of the Company (herein called the "Notes"),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to $ . The Notes are one of an indefinite
number of series of debt securities of the Company (herein collectively called
the "Securities"), issued or issuable under and pursuant to an indenture, dated
as of October 23, 1995, as amended and supplemented (herein called the
"Indenture"), duly executed and delivered by the Company and The Bank of New
York, Trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Securities. The separate
series of Securities may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different redemption provisions or repayment or repurchase rights (if
any), may be subject to different sinking, purchase or analogous funds (if any),
may be subject to different covenants and Events of Default and may otherwise
vary as in the Indenture provided.
[The Notes may not be redeemed prior to maturity and are not subject
to a sinking fund.]
In case an Event of Default (as defined in the Indenture) with respect
to the Notes shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than 66-2/3% in aggregate
principal amount of each series of the Securities at the time Outstanding to be
affected (each series voting as a class), evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
thereon payable in any coin or currency other than that hereinabove provided,
without the consent of the holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such
<PAGE>
5
supplemental indenture, without the consent of the holders of each Security so
affected. It is also provided in the Indenture that, prior to any declaration
accelerating the maturity of any series of Securities, the holders of a majority
in aggregate principal amount of the Securities of such series Outstanding may
on behalf of the holders of all the Securities of such series waive any past
default or Event of Default under the Indenture with respect to such series and
its consequences, except a default in the payment of interest, if any, on or the
principal of, or premium, if any, on any of the Securities of such series, or in
the payment of any sinking fund installment or analogous obligation with respect
to Securities of such series. Any such consent or waiver by the holder of this
Note shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof is
made upon this Note or such other Notes.
No reference herein to the Indenture and no provisions of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of this Note at the place, at
the time and in the coin or currency herein prescribed.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any multiple of $1,000. At the option of the
holders thereof, either at the office or agency to be designated and maintained
by the Company for such purpose in the Borough of Manhattan, The City of New
York, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment of
any service charge, except for any tax or other governmental charges imposed in
connection therewith, Notes may be exchanged for an equal aggregate principal
amount of Notes of like tenor and of other authorized denominations.
The Company, the Trustee, and any agent of the Company or of the
Trustee may deem and treat the registered holder hereof as the absolute owner of
this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon), for the purpose of receiving
payment hereof, or on account hereof, and for all other purposes, and neither
the Company nor the Trustee nor any agent of the Company or of the Trustee shall
be affected by any notice to the contrary. All such payments made to or upon
the order of such registered holder shall, to the extent of the sum or sums
paid, effectually satisfy and discharge liability for moneys payable on this
Note.
No recourse for the payment of the principal of or the interest on
this Note, or for any claim based hereon or otherwise
<PAGE>
6
in respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in any place where the principal of this Note is
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Notes of this series of like tenor and of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE>
7
________________________________
The following abbreviations, when used in the inscription on the face
of the within Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ________ Custodian ________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right of Act _________________________
survivorship and not as tenants (State)
in common
</TABLE>
Additional abbreviations may also be used though not in the above list.
________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
- --------------------------------------------------------------------------------
(Name and Address of Assignee, including zip code, must be printed or
typewritten.)
- --------------------------------------------------------------------------------
the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------------------
to transfer the said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
-----------------------------------
NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Note in every
particular, without alteration or enlargement or any change whatever.
Signature(s) Guaranteed:
- --------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE
EXHIBIT 5
LEHMAN BROTHERS INC.
Three World Financial Center
New York, NY 10285
October 23, 1995
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Ladies and Gentlemen:
I am Deputy General Counsel of Lehman Brothers Inc., a Delaware
corporation (the"Company"). A Registration Statement on Form S-3 (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Act"), was filed by the Company with the Securities and Exchange Commission on
the date hereof. The Registration Statement relates to the registration of up to
$750,000,000 principal amount of debt securities (the "Debt Securities")
consisting of senior debt (the "Senior Debt") and subordinated debt (the
"Subordinated Debt") which the Company may offer from time to time in one or
more series.
In that connection, I or members of my staff have examined and
relied upon originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates and instruments
relating to the Company as I have deemed relevant and necessary to the formation
of the opinion hereinafter set forth. In such examination, I have assumed the
genuineness and authenticity of all documents examined by us or members of my
staff and all signatures thereon, the legal capacity of all persons executing
such documents, the conformity to originals of all copies of documents submitted
to us and the truth and correctness of any representations and warranties
contained therein.
Based upon the foregoing, I am of the opinion that:
(i) the Senior Debt is duly authorized, and when the Indenture
pursuant to which the Senior Debt will be issued (the "Senior Indenture")
between the Company and The Bank of New York., as Trustee (the "Senior Debt
Trustee"), has been duly executed and delivered, and, the Senior Debt, when duly
executed by the Company, authenticated by the Senior Debt Trustee in accordance
with the terms of the Senior Indenture and issued and delivered against payment
therefor, will be legally issued and will constitute a valid and binding
obligation of the Company entitled to the benefits of the Senior Indenture; and
(ii) the Subordinated Debt is duly authorized, and when the
Indenture pursuant to which the Subordinated Debt will be issued (the
"Subordinated Indenture") between the
<PAGE>
Company and Bank of America Illinois, as Trustee (the "Subordinated Debt
Trustee") has been duly executed and delivered, the Subordinated Debt, when
duly executed by the Company, authenticated by the Subordinated Debt Trustee
in accordance with the terms of the Subordinated Indenture and issued and
delivered against payment therefor, will be legally issued and will
constitute a valid and binding obligation of the Company entitled to the
benefits of the Subordinated Indenture.
In rendering this opinion, I express no opinion as to the laws of any
jurisdiction other than the State of New York, the General Corporation Law of
the State of Delaware and the United States of America.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Opinions" in the Registration Statement, without admitting that I am an "expert"
under the Act, or the rules and regulations of the Securities and Exchange
Commission issued thereunder, with respect to any part of the Registration
Statement, including this exhibit.
Very truly yours,
/s/ Karen M. Muller
Karen M. Muller
Deputy General Counsel
Exhibit 8
October 23, 1995
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Ladies and Gentlemen:
We have acted as special United States tax counsel to Lehman Brothers
Inc. (the "Company") in connection with the preparation and filing of the
Registration Statement on Form S-3 filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, in respect of
Debt Securities to be offered by the Company. In that connection, we have given
the opinions contained in the section entitled "United States Taxation" in the
Registration Statement and related prospectus.
We hereby confirm that our opinions referenced in this letter are
accurate in all material respects and hereby consent to the filing of this
letter as an Exhibit to the Registration Statement and to the use of our name in
the section entitled "United States Taxation" in the Registration Statement and
related prospectus.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the federal law of the
United States.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
Consent of Independent Auditors
We consent to the reference to our firm as experts under the caption
"Independent Accountants" in the Registration Statement on Form S-3 and related
prospectus of Lehman Brothers Inc. (the "Company") for the registration of
$750,000,000 of debt securities and in a post effective amendment to the
Registration Statement on Form S-3 (File No. 33-51837) of the Company and to the
incorporation by reference therein of our report dated January 5, 1995,
appearing in the Company's Transition Report on Form 10-K for the eleven months
ended November 30, 1994.
Ernst & Young LLP
New York, New York
October 23, 1995
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine
Eligibility of a Trustee Pursuant to Section 305(b)(2)
BANK OF AMERICA ILLINOIS
(Exact name of trustee as specified in its charter)
Illinois 36-0947896
(Jurisdiction of incorporation or (I.R.S. employer
organization if not a U.S. national bank) identification no.)
231 South LaSalle Street, Chicago, Illinois 60697
(Address of principal executive offices) (Zip code)
LEHMAN BROTHERS, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2518466
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
3 World Financial Center 10285
New York, New York (Zip code)
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
1
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois.
Chicago Clearing House Association, 164 W. Jackson Boulevard,
Chicago, Illinois.
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System, Washington,
D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting securities
of the trustee:
As of August 16, 1995
Col. B
Col. A Amount
Title of class Outstanding
-------------- -----------
Not applicable by virtue of response to Item 13.
Item 4. Trusteeships under Other Indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
Not applicable by virtue of response to Item 13.
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1)
of the Act arises as a result of the trusteeship under any such
other indenture,
2
<PAGE>
including a statement as to how the indenture securities will rank as compared
with the securities issued under such other indenture.
Not applicable by virtue of response to Item 13.
3
<PAGE>
Item 5. Interlocking Directorates and Similar Relationships with the Obligor
or Underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor, identify
each such person having any such connection and state the nature of each such
connection.
Not applicable by virtue of response to Item 13.
Item 6. Voting Securities of the Trustee Owned by the Obligor or Its
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
As of August 16, 1995
Col. A Col. B Col. C Col. D
Percentage of
voting securities
represented by
Amount owned amount given
Name of owner Title of class beneficially in Col. C
------------- -------------- ------------ ---------
Not applicable by virtue of response to Item 13.
Item 7. Voting Securities of the Trustee Owned by Underwriters or Their
Officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
As of August 16, 1995
Col. A Col. B Col. C Col. D
Percentage of
voting securities
represented by
Amount owned amount given
Name of owner Title of class beneficially in Col. C
------------- -------------- ------------ ---------
Not applicable by virtue of response to Item 13.
4
<PAGE>
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
As of August 16, 1995
Col. A Col. B Col. C Col. D
Whether the Amount owned
securities beneficially or Percent of
are voting held as collateral class represented
or nonvoting security for by amount
Title of class securities obligations in defalut given in Col. C
-------------- ---------- ---------------------- ---------------
Not applicable by virtue of response to Item 13.
Item 9. Securities of Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor,
furnish the following information as to each class of securities of such
underwriter any of which are so owned or held by the trustee.
As of August 16, 1995
Col. A Col. B Col. C Col. D
Amount
owned beneficially Percent of class
or held as collateral represented
Name of issuer and Amount security for obligations by amount
title of class outstanding in default by trustee given in Col. C
-------------- ----------- --------------------- ----------------
Not applicable by virtue of response to Item 13.
Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the
obligor or (2) is an affiliate, other than a subsidiary, of the obligor,
furnish the following information as to the voting securities of such person.
As of August 16, 1995
Col. A Col. B Col. C Col. D
Amount
owned beneficially Percent of class
or held as collateral represented
Name of issuer and Amount security for obligations by amount
5
<PAGE>
title of class outstanding in default by trustee given in Col. C
-------------- ----------- --------------------- ---------------
Not applicable by virtue of response to Item 13.
6
<PAGE>
Item 11. Ownership of Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such
person any of which are so owned or held by the trustee.
As of August 16, 1995
Col. A Col. B Col. C Col. D
Amount
owned beneficially Percent of class
or held as collateral represented
Name of issuer and Amount security for obligations by amount
title of class outstanding in default by trustee given in Col. C.
-------------- ----------- --------------------- ----------------
Not applicable by virtue of response to Item 13.
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted
to the trustee, furnish the following information:
As of August 16, 1995
Col. A Col. B Col. C
Nature of indebtedness Amount outstanding Date due
---------------------- ------------------ --------
Not applicable by virtue of response to Item 13.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
There is not nor has there been a default with respect to the
securities under this indenture.
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
7
<PAGE>
There is not nor has there been a default with respect to the
securities under this indenture. The trustee is not a trustee under other
indentures under which securities issued by the obligor are outstanding.
Item 14. Affiliations With the Underwriters.
If any underwriter is an affiliate of the trustees, describe each such
affiliation.
Not applicable by virtue of response to Item 13.
8
<PAGE>
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this statement of eligibility.
1. A copy of the certification by the Illinois Commissioner of
Banks and Trust Companies of Bank of America Illinois' Charter and
Certificate of Conversion, incorporated herein by reference to Exhibit 1
to T-1; Registration No. 33-81660.
2. A copy of the certification by the Illinois Commissioner of
Banks and Trust Companies of Bank of America Illinois' Charter and
Certificate of Conversion, incorporated herein by reference to Exhibit 1
to T-1; Registration No. 33-81660, includes the authority of the
trustee to commence business.
3. A copy of the certificate of authority for Bank of America
Illinois to engage in trust activities issued by the Illinois
Commissioner of Banks and Trust Companies, incorporated herein by
reference to Exhibit 3 to T-1; Registration No. 33-81660.
9
<PAGE>
4. A copy of the existing By-laws of Bank of America Illinois, as
now in effect, incorporated herein by reference to Exhibit 4 to T-1;
Registration No. 33-55043.
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, incorporated herein by reference to
Exhibit 6 to T-1; Registration No. 33-81660.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising or
examining authority, filed herewith.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Bank of America Illinois, an Illinois banking corporation organized
and existing under the laws of the State of Illinois, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Chicago, and State of Illinois,
as of the 16th day of August, 1995.
Bank of America Illinois
By K. L. Clark
K. L. Clark
Assistant Vice President
10
<PAGE>
EXHIBIT 7
11
<PAGE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1995.
All schedules are to be reported in thousands of dollars. Unless
otherwise indicated, report the amount outstanding as of the last business day
of the quarter.
Schedule RC -- Balance Sheet
<TABLE><CAPTION>
C400
Dollar Amounts in Thousands RCFD Bil Mil Thou
--------------------------- ---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository
institutions (from Schedule RC-A):
a. Noninterest-bearing balances and
currency and coin(1) 0081 2,238,000 1.a.
b. Interest-bearing balances(2) 0071 247,000 1.b.
2. Securities:
a. Held-to-maturity securities (from
Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D) 1773 586,000 2.b.
3. Federal funds sold and securities purchased
under agreements to resell in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds sold 0276 120,000 3.a.
b. Securities purchased under agreements
to resell 0277 0 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net
of unearned
income (from
Schedule RC-C) RCFD 2122 11,067,000 4.a.
b. LESS: Allowance for loan
and lease losses RCFD 3123 283,000 4.b.
c. LESS: Allocated transfer
risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned
income, allowance, and reserve
(item 4.a minus 4.b and 4.c) 2125 10,784,000 4.d.
5. Trading assets (from Schedule RC-D) 3545 714,000 5.
6. Premises and fixed assets (including
capitalized leases) 2145 198,000 6.
7. Other real estate owned (from Schedule RC-M) 2150 88,000 7.
8. Investments in unconsolidated subsidiaries
and associated companies (from Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on
acceptances outstanding 2155 22,000 9.
10. Intangible assets (from Schedule RC-M) 2143 603,000 10.
11. Other assets (from Schedule RC-F) 2160 1,302,000 11.
12. Total assets (sum of items 1 through 11) 2170 16,902,000 12.
</TABLE>
12
<PAGE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
13
<PAGE>
Schedule RC -- ContinueD
<TABLE><CAPTION>
Dollar Amounts in Thousands RCFD Bil Mil Thou
--------------------------- ---- ------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals
of columns A and C from Schedule
RC-E, part 1) RCON 2200 7,772,000 13.a.
(1) Noninterest-bearing(1) RCON 6631 2,528,000 13.a.(1)
(2) Interest-bearing RCON 6636 5,244,000 13.a.(2)
b. In foreign offices, Edge and
Agreement subsidiaries, and IBFs
(from Schedule RC-E, part II) RCFM 2200 1,146,000 13.b.
(1) Noninterest-bearing RCFN 6631 24,000 13.b.(1)
(2) Interest-bearing RCFN 6636 1,122,000 13.b.(2)
14. Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of its
Edge and Agreement subsidiaries, and
in IBFs:
a. Federal funds purchased RCFD 0278 779,000 14.a.
b. Securities sold under agreements
to repurchase RCFD 0279 7,000 14.b.
15. a. Demand notes issued to the
U.S. Treasury RCON 2840 274,000 15.a.
b. Trading liabilities (from Schedule
RC-D) RCFD 3548 272,000 15.b.
16. Other borrowed money:
a. With original maturity of one
year or less RCFD 2332 2,981,000 16.a.
b. With original maturity of more
than one year RCFD 2333 41,000 16.b.
17. Mortgage indebtedness and obligations
under capitalized leases RCFD 2910 0 17.
18. Bank's liability on acceptances executed
and outstanding RCFD 2920 22,000 18.
19. Subordinated notes and debentures RCFD 3200 660,000 19.
20. Other liabilities (from Schedule RC-G) RCFD 2930 776,000 20.
21. Total liabilities (sum of items 13
through 20) RCFD 2948 14,730,000 21.
22. Limited-Life preferred stock and related
surplus RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related
surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 685,000 24.
25. Surplus (exclude all surplus related to
preferred stock) RCFD 3839 1,474,000 25.
26 a. Undivided profits and capital
reserves RCFD 3632 21,000 26.a.
</TABLE>
14
<PAGE>
<TABLE><CAPTION>
Dollar Amounts in Thousands RCFD Bil Mil Thou
--------------------------- ---- ------------
<S> <C> <C> <C>
LIABILITIES
b. Net unrealized holding gains
(losses) on available-for-sale
securities RCFD 8434 (2,000) 26.b.
27. Cumulative foreign currency translation
adjustments RCFD 3284 (6,000) 27.
28. Total equity capital (sum of items 23
through 27) RCFD 3210 2,172,000 28.
29. Total liabilities, limited-life
preferred stock, and equity capital
(sum of items 21, 22, and 28) RCFD 3300 16,902,000 29.
</TABLE>
15
<PAGE>
Memorandum
To be reported only with the March Report of condition.
1. Indicate in the box at the right the number of
the statement below that best describes the most
comprehensive level of auditing work performed for
the bank by independent external auditors as of
any date during 1994
Number
------
RCFD 6724 2 M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
16
Exhibit 25(b)
=============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
==================================================
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
==================================================
LEHMAN BROTHERS INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2518466
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3 World Financial Center
New York, New York 10285
(Address of principal executive offices) (Zip code)
______________________
Debt Securities
(Title of the indenture securities)
=============================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
-----------------------------------------------------------------------------
Name Address
-----------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to
Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4
to Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by
an amendment to this Form T-1.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 5th day of May, 1995.
THE BANK OF NEW YORK
By: /S/ WALTER N. GITLIN
==========================
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
<PAGE>
Exhibit 7
==================================================================
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1994, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,715,471
Interest-bearing balances .............. 853,709
Securities:
Held-to-maturity securities ........ 1,346,480
Available-for-sale securities ...... 1,564,425
Federal funds sold in domestic
offices of the bank ................ 5,557,770
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................24,091,702
LESS: Allowance for loan and
lease losses ..............581,958
LESS: Allocated transfer risk
reserve ....................31,502
Loans and leases, net of unearned
income, allowance, and reserve 23,478,242
Assets held in trading accounts ........ 746,396
Premises and fixed assets (including
capitalized leases) ................ 624,567
Other real estate owned ................ 46,570
Investments in unconsolidated
subsidiaries and associated
companies .......................... 181,905
Customers' liability to this bank on
acceptances outstanding ............ 794,339
Intangible assets ...................... 77,527
Other assets ........................... 1,300,004
===========
Total assets ........................... $39,287,405
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,681,498
Noninterest-bearing .......7,230,562
Interest-bearing .........11,450,936
In foreign offices, Edge and
Agreement subsidiaries, and IBFs.. 10,611,477
Noninterest-bearing ..........69,012
Interest-bearing .........10,542,465
<PAGE>
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased ............ 1,033,228
Securities sold under agreements
to repurchase .................... 31,875
Demand notes issued to the U.S.
Treasury ........................... 141,663
Trading liabilities .................... 562,071
Other borrowed money:
With original maturity of one
year or less ....................... 1,576,410
With original maturity of more than
one year ........................... 243,955
Bank's liability on acceptances
executed and outstanding ........... 796,534
Subordinated notes and debentures ...... 1,056,320
Other liabilities ...................... 1,490,732
===========
Total liabilities ...................... 36,225,763
===========
EQUITY CAPITAL
Common stock ........................... 942,284
Surplus ................................ 525,666
Undivided profits and capital
reserves ........................... 1,654,282
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... ( 54,920)
Cumulative foreign currency
translation adjustments ............ ( 5,670)
===========
Total equity capital ................... 3,061,642
===========
Total liabilities and equity
capital ............................ $39,287,405
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
_
Thomas A. Renyi _
J. Carter Bacot _ Directors
Alan R. Griffith _
_
==================================================================
