<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1998
REGISTRATION NO. 333-35143
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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PHILIP MORRIS COMPANIES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
VIRGINIA 13-3260245
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
120 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 880-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
G. PENN HOLSENBECK
VICE PRESIDENT, ASSOCIATE GENERAL COUNSEL AND CORPORATE SECRETARY
PHILIP MORRIS COMPANIES INC.
120 PARK AVENUE
NEW YORK, NEW YORK 10017
(212) 880-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
HARRISON D. MAAS, ESQ. RAYMOND W. WAGNER, ESQ.
HUNTON & WILLIAMS SIMPSON THACHER & BARTLETT
200 PARK AVENUE 425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10166 NEW YORK, NEW YORK 10017
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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
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, 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. [_]
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, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus contained in this Registration Statement, as amended, is a combined
Prospectus which also covers an aggregate of $87,550,000 unissued principal
amount of Debt Securities and Warrants to Purchase Debt Securities registered
under Registration Statement No. 333-16955, as previously filed by the
Registrant on Form S-3, effective December 6, 1996. This Registration
Statement, as amended, is a new Registration Statement and also constitutes
Post-Effective Amendment No. 1 to Registration Statement No. 333-16955, and
such Post-Effective Amendment shall hereafter become effective concurrently
with the effectiveness of this Registration Statement and in accordance with
Section 8(c) of the Securities Act of 1933, as amended.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED JANUARY 29, 1998
PROSPECTUS
[LOGO]
PHILIP MORRIS COMPANIES INC.
Debt Securities
and
Warrants to Purchase Debt Securities
-----------
Philip Morris Companies Inc. (the "Company") intends to offer from time to
time up to $5,087,550,000 aggregate principal amount of its debt securities
(the "Debt Securities") or warrants to purchase the Debt Securities (the "Debt
Warrants"). The Debt Securities and Debt Warrants will be offered in one or
more separate series or issues in amounts, at prices, in currencies or currency
units and on terms to be determined at the time of offering. The Debt Warrants
may be offered with the Debt Securities or separately. See "Plan of
Distribution".
The Debt Securities and the Debt Warrants will be unsecured and will rank
pari passu with all other unsecured and unsubordinated indebtedness of the
Company.
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
(each a "Global Security"). Bearer Securities will not be offered or sold to
persons who are within the United States or to United States persons. See
"Limitations on Issuance of Bearer Securities".
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, maturity,
rate (or manner of calculation thereof) and time of payment of interest, if
any, and any redemption or repayment terms, the currency, currencies or
currency unit or units in which the Debt Securities shall be payable (and
similar information with respect to the Debt Securities purchasable upon
exercise of each Debt Warrant) and the terms of the Debt Warrants, including
the exercise price, detachability, expiration date and other terms, in respect
of which this Prospectus is being delivered are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement"). This Prospectus may not be
used to offer or sell Debt Securities or Debt Warrants unless accompanied by a
Prospectus Supplement.
The Company may sell the Debt Securities and Debt Warrants to or through
underwriters or dealers and also may sell Debt Securities and Debt Warrants
directly to other purchasers or through agents. See "Plan of Distribution". The
Prospectus Supplement sets forth the initial public offering price, the net
proceeds to the Company, the names of, and principal amount of Debt Securities
and Debt Warrants to be purchased by or through underwriters, dealers or
agents, if any, the compensation of such underwriters, dealers or agents and
other special terms in connection with the offering and sale of the applicable
series of Debt Securities or Debt Warrants, as the case may be.
-----------
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 CON-
TRARY IS A CRIMINAL OFFENSE.
-----------
THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER OR DEALER. THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE DEBT SECURITIES OR DEBT WARRANTS
IN ANY JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports and definitive proxy or information
statements filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the following regional offices of the
Commission: 7 World Trade Center, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants,
such as the Company, that file electronically with the Commission. The
Company's Common Stock is listed on the New York Stock Exchange and such
reports, proxy statements and other information concerning the Company can
also be inspected and acquired at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission, Washington, D.C., a registration
statement on Form S-3 (Registration No. 333-16955) under the Securities Act of
1933, as amended (the "1933 Act"), with respect to the Debt Securities and
Debt Warrants offered hereby (together with all amendments and exhibits, the
"Registration Statement"). This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information pertaining to the Debt Securities, Debt Warrants and
the Company, reference is made to the Registration Statement, the exhibits
thereto and the documents incorporated by reference herein.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference and made a part
hereof: (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996; (ii) the Company's Quarterly Reports on Form 10-Q for the
periods ended March 31, 1997, June 30, 1997 and September 30, 1997; and (iii)
the Company's Current Reports on Form 8-K dated January 30, 1997, June 20,
1997, June 25, 1997, July 2, 1997, August 25, 1997, January 16, 1998 and
January 28, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Debt Securities and Debt Warrants shall
be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents. 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 this Prospectus
to the extent that a statement contained herein or in any other subsequently
filed document which also is incorporated or deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
2
<PAGE>
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request, a copy of any or
all of the foregoing documents incorporated by reference herein (not including
exhibits to such documents unless such exhibits are specifically incorporated
by reference into such documents). Requests should be directed to Philip
Morris Companies Inc., 120 Park Avenue, New York, New York 10017, Attention:
Secretary (telephone (212) 880-5000).
THE COMPANY
GENERAL
The Company is a holding company whose principal wholly-owned subsidiaries,
Philip Morris Incorporated, Philip Morris International Inc., Kraft Foods,
Inc., and Miller Brewing Company, are engaged in the manufacture and sale of
various consumer products. A wholly-owned subsidiary of the Company, Philip
Morris Capital Corporation ("PMCC"), engages in various financing and
investment activities. As used herein, unless the context indicates otherwise,
the term "Company" means Philip Morris Companies Inc. and its subsidiaries.
The Company is the largest consumer packaged goods company in the world.*
Philip Morris Incorporated ("PM Inc."), which conducts business under the
trade name "Philip Morris U.S.A.", and its subsidiaries and affiliates are
engaged in the manufacture and sale of cigarettes. PM Inc. is the largest
cigarette company in the United States. Philip Morris International Inc.
("Philip Morris International") is a holding company whose subsidiaries and
affiliates and their licensees are engaged primarily in the manufacture and
sale of tobacco products (mainly cigarettes) internationally. A subsidiary of
Philip Morris International is the leading United States exporter of
cigarettes. Marlboro, the principal cigarette brand of these companies, has
been the world's largest-selling cigarette brand since 1972. Certain
subsidiaries and affiliates of Philip Morris International manufacture and
sell a wide variety of food products in Latin America.
Kraft Foods, Inc. ("Kraft"), is the largest processor and marketer of retail
packaged foods in the United States. A wide variety of cheese, processed meat
products, coffee and grocery products are manufactured and marketed in the
United States and Canada by Kraft. Subsidiaries and affiliates of Kraft Foods
International, Inc., a subsidiary of Kraft, manufacture and market coffee,
confectionery, cheese, grocery and processed meat products in Europe and the
Asia/Pacific region.
Miller Brewing Company ("Miller") is the second largest brewing company in
the United States.
OTHER
The Company is a legal entity separate and distinct from PM Inc., Philip
Morris International, Kraft, Miller, PMCC and its other subsidiaries.
Accordingly, the right of the Company, and thus the right of the Company's
creditors and stockholders, to participate in any distribution of the assets
or earnings of any subsidiary is subject to the prior claims of creditors of
such subsidiary, except to the extent that claims of the Company itself as a
creditor may be recognized. As a holding company, the Company's principal
source of funds is dividends from its subsidiaries. The Company's principal
wholly-owned subsidiaries currently are not limited by long-term debt or other
agreements in their ability to pay cash dividends or to make other
distributions with respect to their common stock.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the Company intends
to use the proceeds from the sale of the Debt Securities and Debt Warrants and
the proceeds, if any, from the exercise of Debt Warrants for general corporate
purposes and to refinance existing short-term and long-term borrowings. At
December 31, 1997, outstanding short-term and long-term borrowings of the
Company carried a weighted average interest rate of 8.93% and 7.40%,
respectively.
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* References to the Company's competitive ranking in its various businesses
are based on sales data or, in the case of cigarettes and beer, shipments.
3
<PAGE>
The Company expects to issue additional long-term and short-term debt from
time to time. The nature and amount of the Company's long-term and short-term
debt and the proportionate amount of each can be expected to vary from time to
time as a result of business requirements, market conditions and other
factors.
SELECTED FINANCIAL INFORMATION
HISTORICAL FINANCIAL STATEMENT DATA
The following consolidated summary information with respect to the Company
is based upon, and should be read in conjunction with, the consolidated
financial statements of the Company, including the notes thereto, included or
incorporated by reference in the documents described under "Incorporation of
Certain Documents by Reference".
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
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1997 1996
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(IN MILLIONS)
<S> <C> <C>
Earnings Data
Operating revenues........................................... $72,055 $69,204
Interest and other debt expense, net (consumer products)..... 1,052 1,086
Earnings before income taxes ................................ 10,611 10,683
Net earnings................................................. 6,310 6,303
Balance Sheet Data
Working capital (consumer products).......................... $ 2,369 $ 323
Total assets
Consumer products.......................................... 50,061 48,954
Financial services and real estate......................... 5,886 5,917
Short-term debt
Consumer products (including current portion of long-term
debt)..................................................... 1,673 2,106
Financial services and real estate......................... -- 173
Long-term debt
Consumer products.......................................... 11,585 11,827
Financial services and real estate......................... 845 1,134
Stockholders' equity......................................... 14,920 14,218
Cash Flow Data
Net cash provided by operating activities
Consumer products.......................................... $ 8,018 $ 7,249
Financial services and real estate......................... 322 385
Capital expenditures (consumer products)..................... 1,874 1,782
Dividends paid............................................... 3,885 3,462
Repurchase of outstanding stock.............................. 805 2,770
</TABLE>
During 1997, the Company recorded pretax charges of $1,457 million related
to tobacco litigation settlements in Mississippi, Florida and Texas.
During 1997, the Company acquired a controlling interest in a Portuguese
tobacco company at a cost of $217 million and increased its ownership interest
in a Mexican cigarette business from 28.8% to 50.0% at a cost of $403 million.
The effects of these and other smaller acquisitions were not material to the
Company's financial position or results of operations in any of the periods
presented.
During 1997, the Company sold several domestic and international food
businesses, including its Brazilian ice cream businesses and its North
American maple-flavored syrup businesses, for total proceeds of $1.5 billion
and net pretax gains of $958 million. In addition, the Company sold its equity
interest in a Canadian beer operation and sold a minority interest in a beer
import operation for proceeds of $306 million and a pretax gain of $12
million. The Company also sold its real estate operations for total proceeds
of $424 million and a pretax gain of $103 million. The operating results of
the businesses divested in 1997 were not material to the Company's
consolidated operating results in any of the periods presented.
4
<PAGE>
During 1997, the Company recorded to earnings before income taxes a charge
of $342 million related primarily to the downsizing or closure of
manufacturing and other facilities, as well as the discontinuance of certain
low-margin product lines of its international food operations. The Company
also recorded to earnings before income taxes a charge of $288 million for
incremental postemployment benefits, primarily related to severance. These
charges reduced 1997 earnings before income taxes by $630 million.
During 1996, the Company acquired a controlling interest in a Polish tobacco
company, at a cost of $285 million and nearly all of the remaining voting
shares of a Brazilian confectionery company, at a cost of $314 million. The
effects of these and other smaller acquisitions were not material to the
Company's financial position or results of operations in any of the periods
presented.
During 1996, the Company sold several domestic and international food
businesses for total proceeds of $612 million and net pretax gains of $320
million. The operating results of the businesses divested in 1996 were not
material to the Company's consolidated operating results in any of the periods
presented.
During 1996, the Company recorded to earnings before income taxes a charge
of $320 million related primarily to the downsizing and closure of certain
food manufacturing facilities and related incremental postemployment costs,
primarily severance.
The Company's credit facilities include a revolving bank credit agreement
which enables the Company to refinance short-term debt on a long-term basis.
Accordingly, short-term debt intended to be refinanced was reclassified as
long-term debt.
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1997 1996 1995 1994 1993
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<S> <C> <C> <C> <C> <C>
Ratios of earnings to fixed charges.................... 8.3 8.5 7.2 6.3 4.6
</TABLE>
Earnings available for fixed charges represent earnings before income taxes
and cumulative effect of accounting change(s) and fixed charges (excluding
interest capitalized, net of amortization), reduced by undistributed earnings
of less than 50% owned affiliates. Fixed charges represent interest incurred
plus that portion of rental expense deemed to be the equivalent of interest.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of
December 2, 1996 (the "Indenture") between the Company and The Chase Manhattan
Bank, as Trustee (the "Trustee"). A copy of the Indenture is filed as an
exhibit to the Registration Statement. The following description summarizes
certain provisions of the Indenture and is subject to the detailed provisions
of the Indenture. Whenever any particular section of the Indenture or any term
defined therein is referred to, such section or definition is incorporated
herein by reference, and the statement in connection with which such reference
is made is qualified in its entirety by such reference. Capitalized terms
appearing in this Prospectus that are not defined herein have the meanings set
forth in the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that additional Debt Securities may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company's Board of Directors. Reference is made to the
Prospectus Supplement for the following terms of the particular series of Debt
Securities being offered thereby: (i) the designation, aggregate principal
amount and authorized denominations of the series; (ii) the percentage of
5
<PAGE>
principal amount at which the series will be issued; (iii) the date or dates
on which the series will mature (or manner of determining the same); (iv) the
rate or rates per annum, if any, at which the series will bear interest (or
the manner of calculation thereof) and the date or dates from which such
interest will accrue; (v) the times at which any interest will be payable (or
manner of determining the same) and the Regular Record Dates for such Interest
Payment Dates for Debt Securities which are Registered Securities; (vi) the
place or places where the principal of (and premium, if any) and interest, if
any, on the series will be payable and each office or agency, as described
below under "Denominations, Registration and Transfer", where the Debt
Securities may be presented for transfer or exchange; (vii) the currency,
currencies or currency unit or units for which such Debt Securities may be
purchased and the currency, currencies or currency unit or units in which the
principal of (and premium, if any) and interest, if any, on such Debt
Securities may be payable; (viii) the period or periods within which, and the
terms and conditions upon which, an election may be made by the Company or a
holder, as the case may be, for payment of the principal of (and premium, if
any) and interest, if any, on the series in the currency, currencies or
currency unit or units other than that in which the series is stated to be
payable; (ix) whether the Debt Securities are to be issuable as Registered
Securities or Bearer Securities or both, and if Bearer Securities are issued,
the circumstances and places for the exchange of Bearer Securities for
Registered Securities; (x) whether such Debt Securities are to be issued in
the form of one or more temporary or permanent Global Securities and, if so,
the identity of the Depositary for such Global Security or Securities; (xi) if
a temporary Global Security is to be issued with respect to such series,
whether any interest thereon payable on an interest payment date prior to the
issuance of a permanent Global Security or definitive Bearer Securities will
be credited to the account of the persons entitled thereto on such interest
payment date; (xii) if a temporary Global Security is to be issued with
respect to such series, the terms upon which interests in such temporary
Global Security may be exchanged for interests in a permanent Global Security
or for definitive Debt Securities of the series and the terms upon which
interests in a permanent Global Security, if any, may be exchanged for
definitive Debt Securities of the series; (xiii) any mandatory or optional
sinking fund or analogous provision; (xiv) the date, if any, after which, and
the price or prices in the currency, currencies or currency unit or units in
which, such Debt Securities are payable pursuant to any optional or mandatory
redemption provisions; (xv) 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 Debt Security or must pay
such additional amounts in respect of any Debt Security; (xvi) the terms and
conditions, if any, upon which the Debt Securities of such series may be
repayable prior to maturity at the option (which option may be conditional) of
the holder thereof (in which case the Company will comply with the
requirements of Section 14(e) and Rule 14e-1 under the 1934 Act in connection
therewith, if then applicable) and the price or prices in the currency,
currencies or currency unit or units in which such Debt Securities are
payable; (xvii) any index used to determine the amount of payments of
principal of (and premium, if any) and interest, if any, on such Debt
Securities; (xviii) the terms and conditions, if any, pursuant to which Debt
Securities may be converted or exchanged for other debt securities of the
Company; (xix) additional information with respect to book-entry procedures,
if any; and (xx) any other terms of the Debt Securities not inconsistent with
the Indenture. (Section 301).
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or foreign currency unit or units or if the
principal of (and premium, if any) or interest, if any, on any series of Debt
Securities is payable in a foreign currency or currencies or foreign currency
unit or units, the restrictions, elections, tax consequences, specific terms
and other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement relating thereto.
Some of the Debt Securities may be issued as Discounted Securities (bearing
no interest or interest at a rate which at the time of issuance is below
market rates) to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any Discounted Securities will be described in
the Prospectus Supplement relating thereto.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities of a series will be issuable as Registered Securities,
Bearer Securities or both. Debt Securities of a series may be issuable in the
form of one or more Global Securities, as described below under
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<PAGE>
"Global Securities". Unless otherwise provided in an applicable Prospectus
Supplement with respect to a series of Debt Securities, Registered Securities
denominated in U.S. dollars will be issued only in denominations of $1,000 or
any integral multiple thereof and Bearer Securities denominated in U.S.
dollars will be issued only in denominations of $5,000 with coupons attached.
A Global Security will be issued in a denomination equal to the aggregate
principal amount of Outstanding Debt Securities of the series represented by
such Global Security. The Prospectus Supplement relating to a series of Debt
Securities denominated in a foreign or composite currency will specify the
denominations thereof. (Sections 201, 301, 302 and 305).
In connection with its 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 below
under "Limitations on Issuance of Bearer Securities") and any such Bearer
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 being acquired 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 being acquired by or on behalf of a United States person, that such United
States person is a person described in Section 1.163-5(c)(2)(i)(D)(6) of the
United States Treasury regulations or is a financial institution who has
purchased such Bearer Security for resale during the restricted period and who
certifies that it has not acquired such Bearer Security for purposes of resale
to a United States person or to a person within the United States. (Sections
303 and 304). See "Global Securities" and "Limitations on Issuance of Bearer
Securities".
Registered Securities of any series 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 Debt
Securities of any series are issuable as both Registered Securities and Bearer
Securities, at the option of the holder upon request confirmed in writing, and
subject to the terms of the Indenture, Bearer Securities (with all unmatured
coupons, except as provided below, and all matured coupons in default) of such
series will be exchangeable for Registered Securities of the same series of
any authorized denominations and of a like aggregate principal amount and
tenor. Unless otherwise indicated in an applicable Prospectus Supplement, any
Bearer Security surrendered in exchange for a 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
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the holder of such coupon when due in accordance with the
terms of the Indenture. (Section 305). Except as provided in an applicable
Prospectus Supplement, Bearer Securities will not be issued in exchange for
Registered Securities.
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 duly executed), at the
office of the Security Registrar or at the office of any transfer agent
designated by the Company for such purpose with respect to any series of Debt
Securities and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the 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 initially appointed the Trustee as Security Registrar
under the 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 Debt Securities, the Company may
at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, except
that, if Debt Securities of a series are issuable only as Registered
Securities, the Company will be required to maintain a transfer agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (in
addition to the Security Registrar) a transfer agent in a Place of Payment for
such series located outside the United States. The Company may at any time
designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002).
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In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Debt Securities of that series
selected to be redeemed and ending at the close of business on (A) if Debt
Securities of the series are issuable only as Registered Securities, the day
of mailing of the relevant notice of redemption, and (B) if Debt Securities of
the series are issuable as Bearer Securities, the day of the first publication
of the relevant notice of redemption or, if Debt Securities of that 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 interest, if any, on Registered
Securities (other than a Global Security) will be made at the office of such
Paying Agent or Paying Agents as the Company may designate from time to time,
except that at the option of the Company payment of any interest may be made
(i) by check mailed or delivered 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 and 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).
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and interest, if any, 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, except that at the option of the Company, payment
of any interest may be made by check or by transfer to an account maintained
by the payee 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 date of delivery by the Company of the Bearer Security, a written
certificate, in the form required by the Indenture, is provided to the Company
stating that on such date the 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 is a
person described in Section 1.163-5(c)(2)(i)(D)(6) of the United States
Treasury regulations or is a financial institution who has purchased such
Bearer Security for resale during the restricted period and who certifies that
it has not acquired such Bearer Security for purposes of resale to a United
States person or to a person within the United States. 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 in the United States. Payments will not be
made in respect of Bearer Securities or coupons appertaining thereto pursuant
to presentation to the Company or its designated Paying Agents within the
United States or any other demand for payment to the Company or its designated
Paying Agents within the United States. Notwithstanding the foregoing, payment
of principal of (and premium, if any) and interest, if any, on Bearer
Securities denominated and payable in U.S. dollars will be made at the office
of the Company's Paying Agent in the United States 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 and the Company has delivered to the Trustee an
opinion of counsel to that effect. (Section 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's sole Paying Agent for payments with respect to
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Debt Securities which are issuable solely as Registered Securities. Any Paying
Agents outside the United States and any other Paying Agents in the United
States initially designated by the Company for the Debt Securities will be
named in the related 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 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 the Debt Securities of a series may
be issuable as Bearer Securities, the Company will be required to maintain (i)
a Paying Agent in a Place of Payment for that series in the United States 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), (ii) a Paying Agent in a Place of Payment
located outside the United States where Debt Securities of such series and any
coupons appertaining thereto may be presented and surrendered for payment;
provided that if the Debt Securities of such series are listed on the
Luxembourg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent in Luxembourg or any other required city located
outside the United States, as the case may be, for the Debt Securities of such
series, and (iii) a Paying Agent in a Place of Payment located outside the
United States where (subject to applicable laws) Registered Securities of such
series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company may be served. (Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) and interest, if any, on any Debt Security
which remains 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 Debt Security or any coupon will thereafter look only
to the Company for payment thereof. (Section 1003).
GLOBAL SECURITIES
The 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 Depositary which shall be The Depository Trust Company, as set
forth below under "Description of Debt Securities--United States Book-Entry
System", unless otherwise provided 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. Unless and until it is
exchanged for Debt Securities in definitive form, a temporary Global Security
in registered form may not be transferred except as a whole by the Depositary
for such Global Security 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 of such Depositary or a
nominee of such successor. (Section 305).
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be as set forth below under "Description of Debt
Securities--United States Book-Entry System" unless otherwise provided in the
Prospectus Supplement relating to such series. The Company anticipates that
the following provisions will apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Debt Securities represented by such
Global Security. Such accounts shall be designated by the underwriters or
agents with respect to such Debt Securities or by the Company if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the Depositary for such Global Security or its nominee
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of
participants) for such Global Security and on the records of participants
(with respect to interests of persons other than participants). The laws of
some states 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.
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So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered
the owners or holders thereof under the Indenture governing such Debt
Securities.
Principal, premium, if any, and interest payments on Debt Securities
registered in the name of a Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Security representing such Debt Securities. Neither the Company, the
Trustee for such Debt Securities, any Paying Agent nor the Security Registrar
for such 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 of the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Securities" below, the Company expects that the Depositary for a series
of Debt Securities or its nominee, upon receipt of any payment of principal,
premium or interest, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of the Global Security for such Debt Securities as shown
on the records of such Depositary or its nominee. 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. Receipt by owners of
beneficial interests in a temporary Global Security of payments in respect of
such temporary Global Security will be subject to restrictions discussed under
"Limitations on Issuance of Bearer Securities" below.
If a Depositary for a series of Debt Securities is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will issue Debt Securities of such
series in definitive form in exchange for the Global Security representing
such series of Debt Securities. In addition, the Company may at any time and
in its sole discretion determine not to have the Registered Securities of a
series represented by a Global Security and, in such event, will issue
Registered Securities of such series in definitive form in exchange for the
Global Security representing such series of Registered Securities. Further, if
the Company so specifies with respect to the Debt Securities of a series, an
owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company and the
Depositary for such Global Security, receive 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
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name (if the Debt Securities of such series are issuable as
Registered Securities). 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 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 Debt Securities of such series are issuable as
Bearer Securities or (c) as either Registered or Bearer Securities, if the
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.
UNITED STATES BOOK-ENTRY SYSTEM
Unless otherwise described in the Prospectus Supplement relating to each
series, the Debt Securities of each series offered, sold or delivered in the
United States will be issued in the form of one or more fully registered
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global notes (collectively, the "Global Note") which will be deposited with,
or on behalf of, The Depository Trust Company, New York, New York (the
"Depository") and registered in the name of the Depository's nominee.
The Depository has advised as follows: it is a limited-purpose trust company
which was created to hold securities for its participating organizations (the
"Participants") and to facilitate the clearance and settlement of securities
transactions between Participants in such securities through electronic book-
entry changes in accounts of its Participants. Participants include securities
brokers and dealers (including the underwriters for such Debt Securities),
banks and trust companies, clearing corporations and certain other
organizations. Access to the Depository's system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("indirect participants"). Persons who are not Participants may
beneficially own securities held by the Depository only through Participants
or indirect participants.
Principal (and premium, if any) and interest payments on the Debt Securities
of each series registered in the name of the Depository's nominee will be made
by the Trustee to the Depository's nominee as the registered owner of the
Global Note. Under the terms of the Indenture, the Company and the Trustee
will treat the persons in whose names the Debt Securities of each series are
registered as the owners of such Debt Securities for the purpose of receiving
payment of principal (and premium, if any) and interest on the Debt Securities
and for all other purposes whatsoever. Therefore, neither the Company, the
Trustee nor any Paying Agent has any direct responsibility or liability for
the payment of principal (and premium, if any) or interest on the Debt
Securities to owners of beneficial interests in a Global Note. The Depository
has advised the Company and the Trustee that its present practice is, upon
receipt of any payment of principal (and premium, if any) or interest, to
immediately credit the accounts of the Participants with such payment in
amounts proportionate to their respective holdings in principal amount of
beneficial interests in such Global Note as shown on the records of the
Depository.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold or delivered during the restricted period
(as defined under "Denominations, Registration and Transfer") in the United
States or to United States persons (each as defined below) except to the
extent permitted under Section 1.163-5(c)(2)(i)(D) of the United States
Treasury regulations (the "D Rules"), and any underwriters, agents and dealers
participating in the offering of such Debt Securities must agree that they
will not offer any Bearer Securities for sale or resale in the United States
or to United States persons, except to the extent permitted under the D Rules,
nor deliver Bearer Securities within the United States.
Bearer Securities and any coupons appertaining thereto 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 Sections 165(j) and 1287(a) of
the Internal Revenue Code". Under Sections 165(j) and 1287(a) of the United
States Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Code"), holders that are United States persons, with certain
exceptions, will not be entitled to deduct any loss on Bearer Securities and
must treat as ordinary income any gain realized on the sale or other
disposition (including the receipt of principal) of Bearer Securities.
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 or any political subdivision
thereof, an estate the income of which is subject to United States federal
income taxation regardless of its source, or a trust subject to the
supervision of a court within the United States and the control of a United
States fiduciary as described in Section 7701(a)(30) of the Code, and "United
States" means the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (including the Commonwealth of Puerto Rico). 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
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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.
CERTAIN COVENANTS OF THE COMPANY
Except as otherwise described in this paragraph, the Company will not and
will not permit any Subsidiary to create, assume, incur or suffer to be
created, assumed or incurred any mortgage, lien, charge or encumbrance of any
kind (herein referred to as "liens") (i) upon any shares of stock issued by
any Subsidiary or (ii) upon any manufacturing plant or facility owned and
operated by the Company or any Subsidiary, which is determined to be a
materially important manufacturing plant or facility by the Company's Board of
Directors in its discretion, without, in each case, making effective provision
whereby all the Debt Securities shall be directly secured equally and ratably
with the indebtedness or other obligations secured by such lien. This covenant
does not apply to: (i) liens for taxes, assessments or governmental charges or
levies not yet delinquent or being diligently contested by appropriate
proceedings, in good faith, if any reserve or provision required by generally
accepted accounting principles shall have been made; (ii) liens incurred in
the ordinary course of business in connection with workmen's compensation,
unemployment insurance and other types of social security or to secure
statutory, excise tax and similar obligations (other then for payment of
borrowed money) and judgment liens unless the judgment shall not have been
discharged or execution stayed pending appeal within 60 days or not discharged
within 60 days after any such stay; (iii) in the case of any materially
important manufacturing facility and if incurred in the ordinary course of
business (a) liens of landlords, mechanics and materialmen for monies not yet
due or being diligently contested in good faith by appropriate proceeding, if
any reserve or provision required by generally accepted accounting principles
shall have been made, (b) leases or subleases granted to others and
(c) easements and other similar encumbrances not interfering with the ordinary
conduct of the business of the Company; (iv) in the case of liens upon any
materially important manufacturing facility, liens incurred in connection with
the issuance by a state or a political subdivision thereof of any securities
the interest on which is exempt from federal income taxes by virtue of Section
103 of the Code, or any other laws and regulations in effect at the time of
such issuance; (v) liens securing indebtedness owed by a Subsidiary to the
Company or another Subsidiary; (vi) liens on property or shares of stock
existing when acquired (including through merger and consolidation) or
securing the payment of all or part of the purchase price, construction or
improvement thereof incurred prior to, at the time of, or within 120 days
after the later of the acquisition, completion of construction or commencement
of full operation of such property or within 120 days after the acquisition of
such shares for the purpose of financing all or a portion of such purchase
thereof or construction thereon; or (vii) any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole or
in part of liens referred to in this sentence. Notwithstanding the foregoing,
the Company may create or assume liens in addition to those otherwise
permitted by the preceding sentence of this paragraph, provided that such
additional liens secure an aggregate amount of indebtedness, which together
with the aggregate "value" of sale and leaseback transactions referred to
below (other than such transactions in which debt has been retired in
accordance with the following paragraph), does not exceed 10% of Consolidated
Net Tangible Assets. (Section 1007).
Sales and leasebacks by the Company or any Subsidiary of any materially
important manufacturing facility are prohibited unless an amount equal to the
greater of the proceeds of sale or the fair value of the property is applied
to the retirement of long-term non-subordinated indebtedness for money
borrowed (including the Debt Securities) of the Company, except that such
sales and leasebacks are permitted to the extent that the "value" thereof plus
the other secured debt referred to in the last sentence of the previous
paragraph does not exceed the amount stated therein. (Section 1008).
Consolidated Net Tangible Assets means the excess over current liabilities
of all assets properly appearing on a consolidated balance sheet of the
Company and its Subsidiaries after deducting goodwill, trademarks, patents,
other like intangibles, and the minority interests of others in Subsidiaries.
A Subsidiary is defined to mean any corporation of which at least a majority
of all outstanding stock having ordinary voting power in the election of
directors of such corporation is at the time, directly or indirectly, owned by
the Company or by one or more Subsidiaries or by the Company and one or more
Subsidiaries. (Section 101).
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There are no other restrictive covenants in the Indenture. The Indenture
does not require the Company to maintain any financial ratios, minimum levels
of net worth or liquidity or restrict the payment of dividends, the making of
other distributions on the Company's capital stock or the redemption or
purchase of its capital stock. Moreover, the Indenture does not contain any
provision requiring the Company to repurchase or redeem any Debt Securities or
Debt Warrants or modify the terms thereof or afford the holders thereof any
other protection in the event of a change of control of the Company, any
highly leveraged transaction or any other event involving the Company that may
materially adversely affect the creditworthiness of the Company or the value
of the Debt Securities or Debt Warrants.
TAX REDEMPTION; SPECIAL TAX REDEMPTION
If and to the extent specified in an applicable Prospectus Supplement, the
Debt Securities of a series will be subject to redemption at any time, as a
whole but not in part, at a redemption price equal to the principal amount
thereof together with accrued and unpaid interest to the date fixed for
redemption, upon publication of a notice as described below, if (x) the
Company determines that (a) as a result of any change in or amendment to the
laws (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 change in official position regarding application
or interpretation of such laws, regulations or rulings (including a holding by
a court of competent jurisdiction), which change or amendment is announced or
becomes effective on or after a date specified in the applicable Prospectus
Supplement, the Company has or will become obligated to pay additional amounts
with respect to any Debt Security of such series as described below under
"Payment of Additional Amounts" or (b) on or after a date specified in the
applicable Prospectus Supplement, any action has been taken by any taxing
authority of, or any decision has been rendered in a court of competent
jurisdiction in, the United States or any political subdivision or taxing
authority thereof or therein, including any of those actions specified in (a)
above, whether or not such action was taken or decision was rendered with
respect to the Company, or any change, amendment, application or
interpretation shall be officially proposed, which, in any such case, in the
written opinion to the Company of independent legal counsel of recognized
standing, will result in a material probability that the Company will become
obligated to pay additional amounts with respect to any Debt Security of such
series, and (y) in any such case the Company in its business judgment
determines that such obligation cannot be avoided by the use of reasonable
measures available to the Company.
If the Company shall determine that any payment made outside the United
States by the Company or any Paying Agent of principal or interest due in
respect of any Bearer Security (an "Affected Security") or any coupon
appertaining thereto would, under any present or future laws or regulations of
the United States, be subject to any certification, 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 (as distinguished from, for example,
status as a United States Alien) of a beneficial owner of such Affected
Security of such series or coupon who is a United States Alien (other than
such a requirement which (a) would not be applicable to a payment made (i)
directly to the beneficial owner or (ii) to a custodian, nominee or other
agent of the beneficial owner, (b) can be satisfied by such custodian, nominee
or other agent certifying to the effect that such beneficial owner is a United
States Alien, provided that, in each case referred to in items (a)(ii) and
(b), payment by such custodian, nominee or other agent to such beneficial
owner is not otherwise subject to any such requirement (other than a
requirement which is imposed on a custodian, nominee or other agent described
in (d) of this sentence), (c) would not be applicable to a payment made by at
least one other Paying Agent of the Company or (d) is applicable to a payment
to a custodian, nominee or other agent of the beneficial owner who is a United
States person, a controlled foreign corporation for United States tax
purposes, a foreign person 50% or more of whose gross income for the three-
year period ending with the close of its taxable year preceding the year of
payment is effectively connected with a United States trade or business, or is
otherwise related to the United States), the Company at its election shall
either (x) redeem the Affected Securities of such series, as a whole, at a
redemption price equal to the principal amount thereof, together with accrued
and unpaid interest to the date fixed for redemption, or (y) if the conditions
of the next succeeding paragraph are satisfied, pay the additional amounts
specified in such paragraph. The Company shall make such
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determination and election as soon as practicable and give prompt notice
thereof (the "Determination Notice") in the manner described under "Notices"
below, stating the effective date of such certification, information or
reporting requirements, whether the Company has elected to redeem the Affected
Securities of such series, 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 of such series must take place, as
provided in the next succeeding sentence. If the Company elects to redeem the
Affected Securities of such series, such redemption shall take place on such
date, not later than one year after the publication of the Determination
Notice, as the Company shall elect by notice to the Trustee given not less
than 45 nor more than 75 days before the date fixed for redemption. Notice of
such redemption of the Affected Securities of such series will be given to the
holders thereof not less than 30 nor more than 60 days prior to the date fixed
for redemption. Notwithstanding the foregoing, the Company shall not so redeem
the Affected Securities of such series if the Company shall subsequently
determine, not less than 30 days prior to the date fixed for redemption, that
subsequent payments would not be subject to any such requirement, in which
case the Company shall give prompt notice of such determination in the manner
described under "Notices" below and any earlier redemption notice shall be
revoked and of no further effect. The right of the holders of Affected
Securities called for redemption to exchange such Affected Securities for
Registered Securities (which Registered Securities will remain Outstanding
following such redemption) will terminate on the 16th day prior to the date
fixed for redemption, and no further exchanges of Affected Securities for
Registered Securities shall be permitted unless the Company shall have made
the subsequent determination and given the notice referred to in the preceding
sentence.
If and so long as the certification, information or other reporting
requirements referred to in the preceding paragraph would be fully satisfied
by payment of a withholding tax, 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 requirements by the Company or any Paying Agent of principal (or
premium, if any) or interest, if any, due in respect of any Affected Security
of such series or any coupon to a holder who certifies that 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 withholding tax, backup withholding
tax or similar charge (other than a withholding tax, backup withholding tax or
similar charge which (a) is the result of a certification, information or
other reporting requirement described in the second parenthetical clause of
the first sentence of the preceding paragraph or (b) is imposed as a result of
presentation of such Affected Security or coupon for payment more than 10 days
after the date on which such payment becomes due and payable or on which
payment thereof is duly provided for, whichever occurs later), will not be
less than the amount provided for in such Affected Security or coupon to be
then due and payable. In the event the Company elects to pay such additional
amounts, the Company will have the right, at its sole option, at any time, to
redeem the Affected Securities of such series as a whole, but not in part, at
a redemption price equal to the principal amount thereof, together with
accrued and unpaid interest to the date fixed for redemption. If the Company
has made the determination described in the preceding paragraph with respect
to certification, 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 of such series 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 of such series are
to be redeemed, the Company shall have no obligation to pay additional amounts
pursuant to this paragraph with respect to principal (or premium, if any) or
interest, if any, accrued and unpaid after the date of the notice of such
determination indicating such redemption, but will be obligated to pay such
additional amounts with respect to interest accrued and unpaid to the date of
such determination. 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 promptly
redeem such Affected Securities in whole but not in part. (Section 1107).
In the event that the Company elects or is required to redeem the Debt
Securities of such series pursuant to the provisions set forth in the
preceding three paragraphs, the Company shall deliver to the Trustee a
certificate,
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signed by an authorized officer, stating that the Company is entitled to
redeem the Debt Securities of such series pursuant to their terms.
Notice of intention to redeem the Debt Securities of such series and all
other notices in accordance with the provisions of the preceding paragraphs
will be given in accordance with "Notices" below. In the case of a redemption,
notice will be given once not more than 60 nor less than 30 days prior to the
date fixed for redemption and will specify the date fixed for redemption.
PAYMENT OF ADDITIONAL AMOUNTS
If and to the extent specified in an applicable Prospectus Supplement, the
Company will, subject to the exceptions and limitations set forth below, pay
to the holder of any Debt Security or coupon who is a United States Alien such
additional amounts as may be necessary in order that every net payment on such
Debt Security or coupon, after withholding by the Company or any of its Paying
Agents for or on account of any present or future tax, assessment or other
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein)
will not be less than the amount provided for in such Debt Security or in such
coupon to be then due and payable. However, the Company will not be required
to make any payment of additional amounts for or on account of:
(1) any tax, assessment or other governmental charge that would not have
been so imposed but for (i) the existence of any present or former
connection between such holder (or between a fiduciary, settlor or
beneficiary of, or a person holding a power over, such holder, if such
holder is an estate or trust, or a member or shareholder of such holder, if
such holder is a partnership or corporation) and the United States,
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, person holding a power, member or shareholder) being or having
been a citizen, resident or treated as a resident thereof or being or
having been engaged in a trade or business or present therein or having or
having had a permanent establishment therein, or (ii) such holder's present
or former status as a personal holding company, foreign personal holding
company, controlled foreign corporation or passive foreign investment
company with respect to the United States or as a corporation that
accumulates earnings to avoid United States federal income tax;
(2) any tax, assessment or other governmental charge which would not have
been so imposed but for the presentation by the holder of such Debt
Security or coupon for payment on a date more than 10 days after the date
on which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
(3) any estate, inheritance, gift, sales, transfer, personal property tax
or any similar tax, assessment or other governmental charge;
(4) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from a payment on a Debt Security or coupon;
(5) any tax, assessment or other governmental charge imposed on a holder
of a Debt Security or coupon that actually or constructively owns 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 or that is a controlled foreign corporation related to the Company
through stock ownership;
(6) any tax, assessment or other governmental charge imposed as a result
of the failure to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the holder or
beneficial owner of a Debt Security or coupon, if such compliance is
required by statute, or by regulation of the United States, as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(7) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment on a Debt Security or coupon
if such payment can be made without such withholding by at least one other
Paying Agent;
(8) any tax, assessment or other governmental charge imposed with respect
to payments on any Registered Security by reason of the failure of the
holder to fulfill the statement requirement of Section 871(h) or Section
881(c) of the Code; or
(9) any combination of items (1), (2), (3), (4), (5), (6), (7) and (8);
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nor will additional amounts be paid with respect to any payment on a Debt
Security or coupon to a holder who is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent such payment would be
required by the laws of the United States (or any political subdivision
thereof) to be included in the income for federal income tax purposes of a
beneficiary or settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner who would not have been entitled to payment
of the additional amounts had such beneficiary, settlor, member or beneficial
owner been the holder of such Debt Security or coupon. (Section 1011).
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may consolidate or merge with or into any other corporation, and
the Company may convey or transfer its properties and assets substantially as
an entirety to another corporation, provided, among other things, that (a) the
corporation formed by or resulting from any such consolidation or merger or
the transferee of such assets shall be a corporation organized and existing
under the laws of the United States, any State thereof or the District of
Columbia and shall expressly assume by supplemental indenture payment of the
principal of (and premium, if any) and interest, if any, on the Debt
Securities and the performance and observance of the Indenture, (b) after
giving effect to the transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, shall
have occurred and be continuing, and (c) certain other conditions are met.
(Section 801).
Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in
accordance with the preceding paragraph, the successor corporation formed by
such consolidation or into which the Company is merged or to which such
conveyance or transfer is made shall be substituted for the Company with the
same effect as if such successor corporation had been named as the Company.
Thereafter the Company shall be relieved of all obligations and covenants
under the Indenture and the Company may thereupon or any time thereafter be
dissolved, wound up, or liquidated. (Section 802).
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Debt Securities: (i) default in the payment of any
instalment of interest on any Debt Securities in such series and any related
coupons for 30 days after becoming due; (ii) default in the payment of the
principal of (or premium, if any, on) any Debt Securities in such series when
due; (iii) default in the performance of any other covenant for 90 days after
notice; and (iv) certain events of bankruptcy, insolvency or reorganization.
(Section 501). If an Event of Default shall occur and be continuing with
respect to a series of Debt Securities, either the Trustee or the holders of
at least 25% in principal amount of the outstanding Debt Securities of such
series may declare the entire principal amount, or, in the case of Discounted
Securities, such lesser amount as may be provided for in such Discounted
Securities, of all the Debt Securities of such series to be immediately due
and payable. (Section 502). A default under any other indebtedness of the
Company will not constitute a default under the Indenture and a default under
one series of Debt Securities or Debt Warrants will not constitute a default
under any other series of Debt Securities or Debt Warrants.
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series of Debt
Securities, give the holders of the Debt Securities of such series notice of
such default known to it (the term default to mean the events specified above
without grace periods); provided that, except in the case of a default in the
payment of principal of (or premium, if any) or interest, if any, on any of
the Debt Securities of such series, the Trustee shall be protected in
withholding such notice if it in good faith determines the withholding of such
notice is in the interest of the holders of the Debt Securities of such
series. (Section 602).
The Company is required to furnish the Trustee annually a statement by
certain officers of the Company to the effect that to the best of their
knowledge the Company is not in default in the fulfillment of any of its
obligations under the Indenture or, if there has been a default in the
fulfillment of any such obligation, specifying each such default. (Section
1005).
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The holders of a majority in principal amount of a particular series of
Outstanding Debt Securities have the right, subject to certain limitations, to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee with respect to such series or exercising any trust
or power conferred on the Trustee, and to waive certain defaults. (Sections
512 and 513). The Indenture provides that in case an Event of Default shall
occur and be continuing, the Trustee shall exercise such of its rights and
powers under the Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs. (Section 601). Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any of the holders of the Debt
Securities unless they shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request. (Section 603).
A judgment for money damages by courts in the United States, including a
money judgment based on an obligation expressed in a foreign currency, will
ordinarily be rendered only in U.S. dollars. New York statutory law provides
that a court shall render a judgment or decree in the foreign currency of the
underlying obligation and that the judgment or decree shall be converted into
U.S. dollars at the exchange rate prevailing on the date of entry of the
judgment or decree.
If, for the purpose of obtaining a judgment in any court with respect to any
obligation of the Company under any Debt Security or any related coupon, it
becomes necessary to convert into any other currency or currency unit any
amount in the currency or currency unit due under such Debt Security or
coupon, the conversion will be made by the Currency Determination Agent at the
Market Exchange Rate in effect on the date of entry of the judgment (the
"Judgment Date"). If pursuant to any such judgment, conversion is made on a
date (the "Substitute Date") other than the Judgment Date and a change has
occurred between the Market Exchange Rate in effect on the Judgment Date and
the Market Exchange Rate in effect on the Substitute Date, the Indenture
requires the Company 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 Market Exchange Rate in
effect on the Judgment Date, is the amount then due under such Debt Security
or coupon. The Company will not, however, be required to pay more in the
currency or currency unit due under such Debt Security or coupon at the Market
Exchange Rate in effect when payment is made than the amount of currency or
currency unit stated to be due under such Debt Security or coupon, and the
Company will 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. (Section 516).
SATISFACTION AND DISCHARGE
Except as may otherwise be set forth in the Prospectus Supplement relating
to a series of Debt Securities, the Indenture provides that the Company shall
be discharged from its obligations under the 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, currencies or
currency unit or units in which the 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 Debt Securities of such series, or (ii) such
amount of direct obligations of, or obligations the principal of (and premium,
if any) and interest, if any, on which are fully guaranteed by, the government
which issued the currency, and are payable in the currency, in which the 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 Debt
Securities of such series or (iii) such amount equal to the amount referred to
in clause (i) or (ii) in any combination of currency or currency units or
government obligations, (b) the Company has paid all other sums payable with
respect to the Debt Securities of such series and (c) certain other conditions
are met. Upon such discharge, the holders of the Debt Securities of such
series shall no longer be entitled to the benefits of the Indenture, except
for certain rights, including
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registration of transfer and exchange of the Debt Securities of such series
and replacement of mutilated, destroyed, lost or stolen Debt Securities, and
shall look only to such deposited funds or obligations. (Sections 401 and
403).
Such discharge may be treated as a taxable exchange of the related Debt
Securities for an issue of obligations of the trust or a direct interest in
the cash and securities held in the trust. In that case, holders of such Debt
Securities would recognize gain or loss as if the trust obligations or the
cash or securities deposited, as the case may be, had actually been received
by them in exchange for their Debt Securities. Such holders thereafter might
be required to include in income a different amount than would be includable
in the absence of discharge. Prospective investors are urged to consult their
own tax advisors as to the specific consequences of discharge.
DEFEASANCE OF CERTAIN OBLIGATIONS
If the terms of the 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 1007 ("Limitations on
Liens") and Section 1008 ("Sale and Leaseback Transactions") and any such
omission with respect to such Sections shall not be an Event of Default with
respect to the Debt Securities of such series, if (a) the Company deposits or
causes to be deposited with the Trustee for the Debt Securities of such series
in trust an amount of (i) cash in the currency or currency unit in which the
Debt Securities of such series are payable (except as otherwise specified with
respect to the Securities of such series), (ii) government obligations of the
type referred to under "Satisfaction and Discharge" or (iii) a combination of
such cash and government obligations which amount, in the case of (ii) or
(iii), together with the predetermined and certain income to accrue on any
such government obligations when due (without the consideration of any
reinvestment thereof), is 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 the case may be and (b) certain
other conditions are met. The obligations of the Company under the Indenture
with respect to the Debt Securities of such series, other than with respect to
the covenants referred to above shall remain in full force and effect.
(Section 1010).
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the holders of more than 50% in principal
amount of the Outstanding Debt Securities of each series issued under the
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 Debt Security, (b) reduce the principal amount of (or premium,
if any) or interest, if any, on any Debt Security, (c) change any obligation
of the Company to pay additional amounts as set forth under "Payment of
Additional Amounts", (d) reduce the amount of principal of a Discounted
Security payable upon acceleration of the Maturity thereof, (e) change the
Place of Payment, (f) change the currency or currency unit of payment of
principal of (or premium, if any) or interest, if any, on any Debt Security,
(g) impair the right to institute suit for the enforcement of any payment on
or with respect to any Debt Security on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or (h)
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 applicable Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults.
(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
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1009). 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 Debt Securities of that series and any coupons
appertaining thereto waive any past default under the Indenture with respect
to that series, except a default in the payment of the principal of (or
premium, if any)
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and interest, if any, on any Debt Security of that series or in respect of a
provision which under the Indenture cannot be modified or amended without the
consent of the holder of each Outstanding Debt Security of that series
affected. (Section 513).
The Indenture contains provisions for convening meetings of the holders of
Debt Securities of a series if Debt Securities of that series are issuable as
Bearer Securities. A meeting may be called at any time by the Trustee, and
also, upon request, by the Company or the holders of at least 10% in principal
amount of the Outstanding Debt Securities of such series, in any such case
upon notice given in accordance with "Notices" below. (Section 1302). Any
resolution passed or decision taken at any meeting of holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all holders of 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. (Section
1304).
NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement
relating to a series of Debt Securities, notices to holders of Bearer
Securities will be given by publication in a daily 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 Luxembourg Stock Exchange and
the rules of the Luxembourg 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 Security, any permanent Global 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 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).
GOVERNING LAW
The Indenture and the Debt Securities are governed by and construed in
accordance with the laws of the State of New York.
CONCERNING THE TRUSTEE
The Company and its subsidiaries have customary banking relationships with
The Chase Manhattan Bank, which is the Trustee under the Indenture. As of
March 31, 1988, the Company had issued pursuant to an Indenture dated as of
December 1, 1985 between the Company and The Chase Manhattan Bank its 8 3/8%
Sinking Fund Debentures Due 2017 which are still outstanding as of the date
hereof. Subsequent to March 31, 1988, the Company has issued pursuant to an
Amended and Restated Indenture, dated as of April 1, 1988, amending, restating
and supplementing an Indenture dated as of December 1, 1985 between the
Company and The Chase Manhattan Bank, the following securities which are still
outstanding as of the date hereof: its 9% Notes Due 1998 and its 9 1/4% Notes
Due 2000. Subsequent to August 1, 1990, the Company has issued pursuant to an
Indenture, dated as of August 1, 1990, as supplemented and amended by a First
Supplemental Indenture dated as of February 1, 1991 and a Second Supplemental
Indenture dated as of January 21, 1992 between the Company and The Chase
Manhattan Bank, the following securities which are still outstanding as of the
date hereof: its 9% Notes Due 2001, its 8 5/8% Notes Due 1999, its 8 3/4%
Notes Due 2001, its 8 1/4% Notes Due 2003, its 7 1/2% Notes
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Due 2002, its 7 3/8% Notes Due 1999, its 7 3/4% Notes Due 1999, its 7 5/8%
Notes Due 2002, its 7 1/8% Notes Due 2002, its 7 1/8% Notes Due 2004, its
7 1/8% Notes Due 1999, its 7 1/4% Notes Due 2003, its 6 3/8% Notes Due 2006, its
6.95% Notes Due 2006, its 7.65% Notes Due July 1, 2008, its 7 1/4% Notes Due
2001 and its Medium-Term Notes, Series C, with interest rates ranging from
6.15% to 8.90% and maturities ranging from 1998 to 2000. Subsequent to
December 2, 1996, the Company has issued pursuant to an Indenture dated as of
December 2, 1996 between the Company and The Chase Manhattan Bank, the
following securities which are still outstanding as of the date hereof: its
6.80% Notes due December 1, 2003, its 7 3/4% Debentures Due 2027, its 7.20%
Notes Due 2007, its 7 1/2% Notes due April 1, 2004 and its 7% Notes Due 2005.
DESCRIPTION OF DEBT WARRANTS
The Company may issue Debt Warrants in registered certificated form for the
purchase of Debt Securities. Debt Warrants may be issued together with or
separately from any Debt Securities offered by any Prospectus Supplement and,
if issued together with any Debt Securities, may be attached to or separate
from such Debt Securities. Debt Warrants are to be issued under Debt Warrant
Agreements to be entered into between the Company and a bank or trust company,
as Debt Warrant Agent, all as set forth in the Prospectus Supplement relating
to the particular issue of Debt Warrants. Copies of the forms of Debt Warrant
Agreements and Debt Warrant Certificates are filed as exhibits to the
Registration Statement. The following summaries of certain provisions of the
forms of Debt Warrant Agreements and Debt Warrant Certificates do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Debt Warrant Agreements and the Debt
Warrant Certificates. Section references herein are references to particular
provisions of the Debt Warrant Agreements. Capitalized terms used in this
Description of Debt Warrants but not defined herein have the meanings ascribed
to such terms in the Debt Warrant Agreements.
GENERAL
The Prospectus Supplement will describe the terms of the Debt Warrants
offered thereby, the Debt Warrant Agreement relating to such Debt Warrants and
the Debt Warrant Certificates representing such Debt Warrants, including the
following: (i) the offering price; (ii) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise of the Debt
Warrants; (iii) if applicable, the designation and terms of the Debt
Securities with which the Debt Warrants are issued and the number of Debt
Warrants issued with each such Debt Security; (iv) if applicable, the date on
and after which the Debt Warrants and the related Debt Securities will be
separately transferable; (v) the principal amount of Debt Securities
purchasable upon exercise of one Debt Warrant and the price at which such
principal amount of Debt Securities may be purchased upon such exercise; (vi)
the date on which the right to exercise the Debt Warrants shall commence and
the date (the "Debt Warrant Expiration Date") on which such right shall
expire; (vii) federal income tax consequences; (viii) the identity of the Debt
Warrant Agent; and (ix) any other terms of the Debt Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant Certificates
of different denominations, may be presented for registration of transfer, and
may be exercised at the corporate trust office of the Debt Warrant Agent or
any other office indicated in the applicable Prospectus Supplement. (Section
4.01).
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle its holder to purchase such principal amount
of Debt Securities at such exercise price as shall in each case be set forth
in, or calculable from, the Prospectus Supplement relating to the Debt
Warrants. (Section 1.01). Debt Warrants may be exercised at any time up to
5:00 p.m., New York City time, on the Debt Warrant Expiration Date set forth
in the Prospectus Supplement relating to such Debt Warrants. After such time
on the Debt Warrant Expiration Date (or such later date to which such Debt
Warrant Expiration Date may be extended by the Company), unexercised Debt
Warrants will be void. (Section 2.02).
Debt Warrants may be exercised by delivery to the Debt Warrant Agent of
payment as provided in the Prospectus Supplement of the amount required to
purchase the Debt Securities purchasable upon such exercise together with
certain information set forth on the reverse side of the Debt Warrant
Certificate. Debt Warrants will be deemed to have been exercised upon receipt
of the exercise price, subject to the receipt within five
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business days of the Debt Warrant Certificate evidencing such Debt Warrants.
Upon receipt of such payment and the Debt Warrant Certificate properly
completed and duly executed at the corporate trust office of the Debt Warrant
Agent or any other office indicated in the Prospectus Supplement, the Company
will, as soon as practicable, issue and deliver the Debt Securities
purchasable upon such exercise. If fewer than all of the Debt Warrants
represented by such Debt Warrant Certificate are exercised, a new Debt Warrant
Certificate will be issued for the remaining amount of Debt Warrants. (Section
2.03).
MODIFICATIONS
The Debt Warrant Agreement and the terms of the Debt Warrants may be amended
by the Company and the Debt Warrant Agent, without the consent of the holders,
for the purpose of curing any ambiguity, or curing, correcting or
supplementing any defective provision contained therein, or in any other
manner which the Company and the Debt Warrant Agent may deem necessary or
desirable and which will not adversely affect the interests of the holders.
(Section 6.01).
ENFORCEABILITY OF RIGHTS BY HOLDERS; GOVERNING LAW
The Debt Warrant Agent will act solely as an agent of the Company in
connection with the Debt Warrant Certificates and will not assume any
obligation or relationship of agency or trust for or with any holders of Debt
Warrant Certificates. (Section 5.02). Holders may, without the consent of the
Debt Warrant Agent or the Trustee for the applicable series of Debt
Securities, enforce by appropriate legal action, on their own behalf, their
right to exercise their Debt Warrants in the manner provided in their Debt
Warrant Certificates and the Debt Warrant Agreement. (Section 3.03). Prior to
the exercise of their Debt Warrants, holders of Debt Warrants will not have
any of the rights of holders of the Debt Securities purchasable upon such
exercise, including the right to receive payments of principal of (and
premium, if any) or interest, if any, on the Debt Securities purchasable upon
such exercise or to enforce covenants in the Indenture. (Section 3.01). Except
as may otherwise be provided in the Prospectus Supplement relating thereto,
each issue of Debt Warrants and the applicable Debt Warrant Agreement will be
governed by and construed in accordance with the laws of the State of New
York. (Section 6.04).
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities and the Debt Warrants (i) through
underwriters or dealers, (ii) directly to one or more institutional purchasers
or (iii) through agents. The Prospectus Supplement with respect to the Debt
Securities or the Debt Warrants being offered thereby sets forth the terms of
the offering thereof, including the name or names of any underwriters, their
purchase price and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
they may be listed. Only underwriters so named in the Prospectus Supplement
are deemed to be underwriters in connection with the Debt Securities or the
Debt Warrants offered thereby.
If underwriters are used in the sale, the Debt Securities or the Debt
Warrants 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 or the Debt Warrants will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all the Debt
Securities or the Debt Warrants offered by the Prospectus Supplement relating
to such series if any 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.
Debt Securities or Debt Warrants may also be sold directly by the Company or
through agents designated by the Company from time to time. Any agent involved
in the offering and sale thereof in respect of which this Prospectus is
delivered is named and any commissions payable by the Company to such agent
are set
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forth in the Prospectus Supplement relating to such series. Unless otherwise
indicated in such Prospectus Supplement, any such agent is acting on a best
efforts basis for the period of its appointment.
If so indicated in a Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutional
investors to purchase Debt Securities or Debt Warrants, as the case may be, to
which such Prospectus Supplement relates providing for payment and delivery on
a future date specified in such 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 amount of the
particular Debt Securities or Debt Warrants which may be sold pursuant to such
arrangements. Institutional investors to which such offers may be made, when
authorized, include commercial and savings banks, insurance companies, pension
funds, investment companies, 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 that (i) such purchase 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) if the
particular Debt Securities or Debt Warrants are being sold to underwriters,
the Company shall have sold to such underwriters the total amount of such Debt
Securities or Debt Warrants less the 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.
Debt Securities may also be offered and sold, if so indicated in a
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for the Company. Any remarketing firm will
be identified and the terms of its agreement, if any, with the Company and its
compensation will be described in the applicable Prospectus Supplement
relating to such series. Remarketing firms may be deemed to be underwriters,
as that term is defined in the 1933 Act, in connection with the Debt
Securities remarketed thereby.
Agents, underwriters and remarketing firms may be entitled under agreements
entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the 1933 Act, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may engage in
transactions with, or perform services for, the Company in the ordinary course
of business.
Each underwriter, dealer, agent and remarketing firm participating in the
distribution of any Debt Securities that are issuable as Bearer Securities
will agree that it will not offer, sell or deliver, directly or indirectly,
Bearer Securities in the United States or to United States persons (other than
qualifying financial institutions) in connection with the original issuance of
such Debt Securities.
VALIDITY OF DEBT SECURITIES AND DEBT WARRANTS
The validity of the Debt Securities and Debt Warrants will be passed upon
for the Company by Hunton & Williams, 200 Park Avenue, New York, New York and
for any underwriter or agent by Simpson Thacher & Bartlett (a partnership
which includes professional corporations), 425 Lexington Avenue, New York, New
York. Simpson Thacher & Bartlett acts as counsel in certain matters for
certain subsidiaries of the Company.
EXPERTS
The Company's consolidated financial statements as of December 31, 1997 and
1996 and for each of the three years in the period ended December 31, 1997
included in its Current Report on Form 8-K, dated January 28, 1998,
incorporated by reference in this Prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given upon the authority of that firm as experts in accounting and auditing.
The Company's consolidated financial statements and related financial
statement schedule incorporated by reference or included in its Annual Report
on Form 10-K for the year ended December 31, 1996, incorporated by reference
in this Prospectus, have been incorporated herein in reliance on the reports
of Coopers & Lybrand L.L.P., independent accountants, given upon the authority
of that firm as experts in accounting and auditing.
22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 16. EXHIBITS.
EXHIBIT NO.
<TABLE>
<C> <C> <S>
1(a) -- Form of Underwriting Agreement, including Form of Terms
Agreement.
(b) -- Form of Selling Agency Agreement.
4(a) -- Indenture dated as of December 2, 1996 between the Company and
The Chase Manhattan Bank, Trustee.
(b) -- Form of Debt Securities.
(c) -- Form of Debt Securities (Form of Medium-Term Notes).
(d) -- Forms of Debt Warrant Agreements, including Forms of Debt
Warrant Certificates.
5 -- Opinion of Hunton & Williams, counsel to the Company, as to the
legality of the securities being registered.
23(a) -- Consent of Independent Accountants.
(b) -- Consent of Hunton & Williams (included in the opinion filed as
Exhibit 5 to this Registration Statement).
</TABLE>
II-1
<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 THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
THE 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
29TH DAY OF JANUARY, 1998.
PHILIP MORRIS COMPANIES INC.
By: /s/ Geoffrey C. Bible
-------------------------------------
(GEOFFREY C. BIBLE, CHAIRMAN OF THE
BOARD OF DIRECTORS)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE 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/ Geoffrey C. Bible Director, Chairman January 29, 1998
- --------------------------------------------- of the Board of Directors
(GEOFFREY C. BIBLE) and Chief Executive
Officer
/s/ Louis C. Camilleri Senior Vice January 29, 1998
- --------------------------------------------- President and Chief
(LOUIS C. CAMILLERI) Financial Officer
/s/ Frank T. Toscano Vice President January 29, 1998
- --------------------------------------------- and Controller
(FRANK T. TOSCANO)
* Elizabeth E. Bailey, Murray H. Bring,
Harold Brown, William H. Donaldson, Jane
Evans, Carlos Slim Helu, Robert E. R.
Huntley, Rupert Murdoch, John D. Nichols,
Richard D. Parsons, Roger S. Penske, John
S. Reed, Stephen M. Wolf, Directors
</TABLE>
*By: /s/ G. Penn Holsenbeck
------------------------------------ January 29, 1998
(G. PENN HOLSENBECK, ATTORNEY-IN-FACT)
II-2
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. PAGE NO.
<TABLE>
<C> <C> <S> <C>
1(a) -- Form of Underwriting Agreement, including Form of Terms
Agreement. ...............................................
(b) -- Form of Selling Agency Agreement. ........................
4(a) -- Indenture dated as of December 2, 1996 between the Company
and The Chase Manhattan Bank, Trustee. ...................
(b) -- Form of Debt Securities. .................................
(c) -- Form of Debt Securities (Form of Medium-Term Notes). .....
(d) -- Forms of Debt Warrant Agreements, including Forms of Debt
Warrant Certificates. ....................................
5 -- Opinion of Hunton & Williams, counsel to the Company, as
to the legality of the securities being registered. ......
23(a) -- Consent of Independent Accountants. ......................
(b) -- Consent of Hunton & Williams (included in the opinion
filed as Exhibit 5 to this Registration Statement). ......
</TABLE>
<PAGE>
EXHIBIT 1(a)
PHILIP MORRIS COMPANIES INC.
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
UNDERWRITING AGREEMENT
DATED AS OF DECEMBER 1, 1997
1. Introductory. Philip Morris Companies Inc., a Virginia corporation
("Company"), proposes to issue and sell from time to time certain of its debt
securities and warrants to purchase certain of its debt securities in an
aggregate principal amount expressed in U.S. dollars or in such foreign
currencies or currency units as the Company shall designate at the time of
offering. Such debt securities, warrants and debt securities subject to such
warrants, registered under the registration statement referred to in Section
2(a), are hereinafter collectively referred to as "Registered Securities".
Registered Securities involved in any offering referred to below are
hereinafter collectively referred to as "Securities", such debt securities
that are Securities are hereinafter referred to as "Purchased Debt
Securities", warrants to purchase debt securities that are Securities are
hereinafter referred to as "Debt Warrants", debt securities subject to
warrants that are Securities are hereinafter referred to as "Warrant Debt
Securities", Purchased Debt Securities and Warrant Debt Securities are
hereinafter collectively referred to as "Debt Securities" and Purchased Debt
Securities and Debt Warrants are hereinafter collectively referred to as
"Purchased Securities". The Debt Securities will be issued under an Indenture,
dated as of December 2, 1996 (the "Indenture"), between the Company and The
Chase Manhattan Bank, as Trustee and the Debt Warrants will be issued under a
debt warrant agreement (the "Debt Warrant Agreement"), between the Company and
a bank or trust company, as Debt Warrant Agent, specified in the Terms
Agreement referred to in Section 3, in one or more series or issues, which may
vary as to interest rates, maturities, redemption provisions, exercise prices,
expiration dates, selling prices, currency or currency units and other terms,
with in each case all such terms for any particular Registered Securities
being determined at the time of sale. Particular Purchased Securities will be
sold pursuant to a Terms Agreement and for resale in accordance with terms of
offering determined at the time of sale.
The firm or firms which agree to purchase the Purchased Securities are
hereinafter referred to as the "Underwriters" of such Purchased Securities,
and the representative or representatives of the Underwriters, if any,
specified in a Terms Agreement referred to in Section 3 are hereinafter
referred to as the "Representatives"; provided, however, that if the Terms
Agreement does not specify any representative of the Underwriters, the term
"Representatives", as used in this Agreement (other than in Sections 2(b), 5
and 6 and the second sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-35143), including a prospectus,
relating to the Registered Securities has been filed with the Securities
and Exchange Commission (the "Commission") and such amendments thereto as
may have been required to the date hereof have been filed and such
registration statement has become effective. Such registration statement,
as amended at the time of any Terms Agreement referred to in Section 3, is
hereinafter referred to as the "Registration Statement", and the prospectus
included in such Registration Statement, as supplemented as contemplated by
Section 3 to reflect the terms of the Securities and the terms of offering
thereof, including all material incorporated by reference therein, is
hereinafter referred to as the "Prospectus".
(b) On the effective date of the registration statement relating to the
Registered Securities, such registration statement or, if one or more post-
effective amendments shall have been filed with respect to such
registration statement, on the most recent effective date of such post-
effective amendments, such registration statement, as so amended, conformed
in all material respects to the requirements of the Securities Act of 1933
(the "Act"), the Trust Indenture Act of 1939 (the "Trust Indenture Act")
and the rules and regulations of the Commission (the "Rules and
Regulations") and did not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to
1
<PAGE>
make the statements therein not misleading, and, on the date of each Terms
Agreement referred to in Section 3 and on each Closing Date as defined in
Section 3, the Registration Statement and the Prospectus will conform in
all respects to the requirements of the Act, the Trust Indenture Act and
the Rules and Regulations, and none of such documents will include 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, except that the foregoing does not apply to statements in
or omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
3. Purchase and Offering of Securities. The obligation of the Underwriters
to purchase the Purchased Securities will be evidenced by an exchange of
telegraphic or other written communications (the "Terms Agreement") at the
time the Company determines to sell the Purchased Securities. The Terms
Agreement will incorporate by reference the provisions of this Agreement,
except as otherwise provided therein, and will specify the firm or firms which
will be Underwriters, the names of any Representatives, the principal amount
of Purchased Debt Securities and the number of Debt Warrants to be purchased
by each Underwriter, the purchase price to be paid by the Underwriters and the
terms of the Purchased Securities not already specified in the Indenture or
the Debt Warrant Agreement, as the case may be, including, but not limited to,
interest rate, maturity, any redemption provisions and any sinking fund
requirements, the exercise price of the Debt Warrants to be purchased, the
principal amount of Warrant Debt Securities issuable upon exercise of one such
Debt Warrant, the date after which such Debt Warrants are exercisable, the
expiration date thereof and the date, if any, such Debt Warrants are
detachable and whether any of the Purchased Debt Securities or Debt Warrants
may be sold to institutional investors pursuant to Delayed Delivery Contracts
(as defined below). The Terms Agreement will also specify the time and date of
delivery and payment (such time and date, or such other time not later than
seven full business days thereafter as the Representatives and the Company
agree as the time for payment and delivery, being herein and in the Terms
Agreement referred to as the "Closing Date"), the place of delivery and
payment and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Purchased Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Purchased Securities for sale as set forth in the Prospectus. The
Purchased Securities delivered to the Underwriters on the Closing Date will be
in fully registered or bearer form with respect to any Debt Securities, and in
fully registered form with respect to Debt Warrants, in each case in such
denominations and numbers and registered in such names as the Underwriters may
request.
If the Terms Agreement provides for sales of Purchased Debt Securities or
Debt Warrants pursuant to delayed delivery contracts, the Company authorizes
the Underwriters to solicit offers to purchase Purchased Debt Securities or
Debt Warrants pursuant to delayed delivery contracts substantially in the form
of Annex I attached hereto ("Delayed Delivery Contracts") with such changes
therein as the Company may authorize or approve. Delayed Delivery Contracts
are to be with institutional investors, including commercial and savings
banks, insurance companies, pension funds, investment companies and
educational and charitable institutions. On the Closing Date the Company will
pay, as compensation, to the Representatives for the accounts of the
Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Purchased Debt Securities and number of Debt Warrants to
be sold pursuant to Delayed Delivery Contracts ("Contract Securities"). The
Underwriters will not have any responsibility in respect of the validity or
the performance of Delayed Delivery Contracts. If the Company executes and
delivers Delayed Delivery Contracts, the Contract Securities will be deducted
from the Securities to be purchased by the several Underwriters and the
aggregate principal amount of Purchased Debt Securities and number of Debt
Warrants, as the case may be, to be purchased by each Underwriter will be
reduced pro rata in proportion to the principal amount of Purchased Debt
Securities or number of Debt Warrants set forth opposite each Underwriter's
name in such Terms Agreement, except to the extent that the Representatives
determine that such reduction shall be otherwise than pro rata and so advise
the Company. The Company will advise the Representatives not later than the
business day prior to the Closing Date of the Purchased Debt Securities and
Debt Warrants that are the Contract Securities.
4. Certain Agreements of the Company. The Company agrees with the several
Underwriters that it will furnish to Simpson Thacher & Bartlett, counsel for
the Underwriters, one signed copy of the registration
2
<PAGE>
statement relating to the Registered Securities, including all exhibits, in
the form it became effective and of all amendments thereto and that, in
connection with each offering of Securities:
(a) The Company will advise the Representatives promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus and
will afford the Representatives a reasonable opportunity to comment on any
such proposed amendment or supplement; and the Company will also advise the
Representatives promptly of the filing of any such amendment or supplement
and of the institution by the Commission of any stop order proceedings in
respect of the Registration Statement or of any part thereof and will use
its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, 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.
(c) As soon as practicable, but not later than 18 months, after the date
of each Terms Agreement, the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the most recent effective date of
the registration statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such Terms
Agreement and (iii) the date of the Company's most recent Annual Report on
Form 10-K filed with the Commission prior to the date of such Terms
Agreement, which will satisfy the provisions of Section 11(a) of the Act
(including, at the option of the Company, Rule 158 of the Rules and
Regulations under the Act).
(d) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement and all
amendments and supplements to such documents, in each case as soon as
available, and copies of the Prospectus and all amendments and supplements
to the Prospectus not later than 10:00 A.M., New York City time, on the day
following the date thereof. The Company will furnish each of such documents
in such quantities as are reasonably requested.
(e) The Company will arrange for the qualification of the Securities for
sale and the determination of their eligibility for investment under the
laws of such jurisdictions within the United States as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution; provided that the Company will not be
required to qualify to do business in any jurisdiction where it is not now
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
subject.
(f) During the period of five years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K and
definitive proxy statement of the Company filed with the Commission under
the Securities Exchange Act of 1934 (the "Exchange Act") or mailed to
stockholders, and (ii) from time to time, such other information concerning
the Company as the Representatives may reasonably request.
(g) The Company will pay all expenses incident to the performance of its
obligations under this Agreement and will reimburse the Underwriters for
any expenses (including fees and disbursements of counsel) incurred by them
in connection with qualification of the Registered Securities for sale and
determination of their eligibility for investment under the laws of such
jurisdictions as the Representatives
3
<PAGE>
may designate and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for
the filing fee of the National Association of Securities Dealers, Inc.
relating to the Registered Securities and for expenses incurred in
distributing the Prospectus, any preliminary prospectuses and any
preliminary prospectus supplements to Underwriters.
(h) For a period beginning at the time of execution of the Terms
Agreement and ending on the Closing Date, if any Debt Securities are being
issued, without the prior consent of the Representatives, the Company will
not offer or contract to sell or, except pursuant to a commitment entered
into prior to the date of the Terms Agreement, sell or otherwise dispose of
any debt securities denominated in the currency or currency unit in which
the Securities are denominated and issued or guaranteed by the Company and
having a maturity of more than one year from the date of issue.
5. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Purchased Securities will be
subject to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the Representatives,
or counsel for the Underwriters, shall have received a letter of Coopers &
Lybrand L.L.P., confirming that they are independent certified public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating in effect that:
(i) in their opinion, the financial statements and schedules of the
Company audited by them and included in the prospectus contained in the
registration statement relating to the Registered Securities, as
amended at the date of such letter, comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) on the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS No. 71") on any
unaudited interim condensed consolidated financial statements of the
Company included in such prospectus, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that (A) the unaudited interim condensed
consolidated financial statements, if any, of the Company included in
such prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it
applies to Quarterly Reports on Form 10-Q and the related published
Rules and Regulations or (B) that any material modifications should be
made for them to be in conformity with generally accepted accounting
principles;
(iii) on the basis of a reading of any unaudited pro forma condensed
combined financial statements of the Company included in such
prospectus, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that the unaudited pro forma condensed combined financial statements
included in such prospectus do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments, if any, have not
been properly applied to the historical amounts in the compilation of
those statements; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
obtained from accounting records that are subject to the internal
control structure, policies and procedures of the Company's accounting
system or are derived directly from such accounting records by analysis
or computation) with the results obtained from procedures specified in
such letter and have found such dollar amounts,
4
<PAGE>
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus
for purposes of this subsection.
(b) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there shall not
have occurred (i) any change in the capital stock or long-term debt of the
Company and its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which is, in the reasonable judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus;
(ii) any downgrading in the rating of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), and no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of such debt securities; (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange or any setting of minimum prices for trading on the New York
Stock Exchange or any suspension of trading of any securities of the
Company on any United States exchange or in the over-the-counter market;
(iv) any banking moratorium declared by Federal or New York authorities, or
the authorities of any country in whose currency any Purchased Debt
Securities or Debt Warrants are denominated under the applicable Terms
Agreement; (v) any outbreak or escalation of major hostilities in which the
United States or any country in whose currency any Purchased Debt
Securities or Debt Warrants are denominated under the applicable Terms
Agreement is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
reasonable judgment of the Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Securities; or (vi) any action by any governmental
authority or any change, or any development involving a prospective change,
involving currency exchange rates or exchange controls, which makes it
impracticable or inadvisable in the reasonable judgment of the
Representatives to proceed with the public offering or delivery of the
Securities on the terms and in the manner contemplated in the Prospectus.
(d) The Representatives shall have received an opinion, dated the Closing
Date, of Hunton & Williams, counsel for the Company, to the effect that:
(i) the Company has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Virginia, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which it owns or leases substantial
properties or in which the conduct of its business requires such
qualification and in which the failure to so qualify would have a
material adverse effect on the Company;
(ii) Philip Morris Incorporated, Philip Morris International Inc. and
Kraft Foods, Inc. have been duly incorporated and are existing
corporations in good standing under the laws of their respective
jurisdictions of incorporation, with corporate power and authority to
own their respective properties and conduct their respective businesses
as described in the Prospectus; all outstanding shares of capital stock
of Philip Morris Incorporated, Philip Morris International Inc. and
Kraft Foods, Inc. are owned by the Company, free and clear of any lien,
pledge and encumbrance or claim of any third party;
(iii) the Indenture and any Debt Warrant Agreement have been duly
authorized, executed and delivered by the Company; the Indenture has
been duly qualified under the Trust Indenture Act; the Securities have
been duly authorized; the Purchased Securities other than any Contract
Securities have been duly executed, authenticated, issued and
delivered; the Indenture, any Debt Warrant Agreement and the Securities
other than any Warrant Debt Securities and any Contract Securities
constitute, and
5
<PAGE>
any Warrant Debt Securities, when executed, authenticated, issued and
delivered in the manner provided in the Indenture and sold pursuant to
any Debt Warrant Agreement, and any Contract Securities, when executed,
authenticated, issued and delivered in the manner provided in the
Indenture and sold pursuant to Delayed Delivery Contracts, 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, to general equity principles and any implied covenant
of good faith and fair dealing; and the Securities other than any
Warrant Debt Securities and any Contract Securities conform, and any
Warrant Debt Securities and any Contract Securities, when so issued and
delivered and sold, will conform, to the description thereof contained
in the Prospectus;
(iv) no consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance or sale of the Purchased Securities by the Company, except
such as have been obtained and made under the Act and the Trust
Indenture Act and such as may be required under state securities laws;
(v) the execution, delivery and performance of the Indenture, the
Terms Agreement (including the provisions of this Agreement), any Debt
Warrant Agreement, and any Delayed Delivery Contracts and the issuance
and sale of the Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, the charter or by-
laws of the Company, Philip Morris Incorporated, Philip Morris
International Inc. or Kraft Foods, Inc., or, to the knowledge of such
counsel, the charter or by-laws of any other subsidiary of the Company,
any statute, any rule, regulation or order of any governmental agency
or body or any court having jurisdiction over the Company or any
subsidiary of the Company or any of their properties or any agreement
or instrument to which the Company or any such subsidiary is a party or
by which the Company or any such subsidiary is bound or to which any of
the properties of the Company or any such subsidiary is subject, and
the Company has full power and authority to authorize, issue and sell
the Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement);
(vi) the Registration Statement has become effective under the Act,
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, and the registration
statement relating to the Registered Securities, as of its effective
date, the Registration Statement and the Prospectus, as of the date of
the Terms Agreement, and any amendment or supplement thereto, as of its
date, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations; such counsel have no reason to believe that such
registration statement, as of its effective date, or any amendment or
supplement thereto, as of its 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 that the Prospectus or any amendment or supplement
thereto 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; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel do not know of any
legal or governmental proceedings required to be described in the
Prospectus which are not described as required or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement or the Prospectus or any such amendment or
supplement; and
(vii) the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
6
<PAGE>
In rendering such opinion, Hunton & Williams may state that (1) in clause
(iii) with respect to the validity and enforceability of the Indenture, any
Debt Warrant Agreement and the Securities, and in clause (iv) and in clause
(v) with respect to any statute, rule, regulation or order of any governmental
agency, body or court and the power and authority of the Company to authorize,
issue and sell the Securities, such counsel has assumed that under the laws of
any country in whose currency (or whose currency is a component currency of a
currency unit in which) any Securities are denominated or payable, if other
than in U.S. dollars, or of any other governmental authority having
jurisdiction over any such currency unit, that no consent, approval,
authorization, or order of, or filing with any governmental agency, body or
court is required for the consummation of the transactions contemplated
hereunder in connection with the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in any breach
or violation of any of the terms and provisions in any statute, rule,
regulation or order of any governmental agency or body or any court, and (2)
in clause (iii) with respect to the enforceability of the Indenture, no
opinion is expressed with respect to Section 516 thereof. Such counsel may
note that (a) a New York statute provides that with respect to a foreign
currency obligation a court of the State of New York shall render a judgment
or decree in such foreign currency and such judgment or decree shall be
converted into currency of the United States at the rate of exchange
prevailing on the date of entry of such judgment or decree and (b) with
respect to a foreign currency obligation a United States Federal court in New
York may award judgment in United States dollars, provided that such counsel
expresses no opinion as to the rate of exchange such court would apply.
(e) The Representatives shall have received from Simpson Thacher &
Bartlett, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Securities, the Registration Statement, the Prospectus and
other related matters as they may 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. In rendering such opinion, Simpson
Thacher & Bartlett may rely as to the incorporation of the Company and all
other matters governed by Virginia law upon the opinion of Hunton &
Williams referred to above.
(f) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operation of the
Company and its subsidiaries except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(g) The Representatives shall have received a letter, dated the Closing
Date, of Coopers & Lybrand L.L.P., which reconfirms the matters set forth
in their letter delivered pursuant to subsection (a) of this Section and
states in effect that:
(i) in their opinion, any financial statements or schedules examined
by them and included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section comply in form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) on the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in SAS No. 71, on any
unaudited interim condensed consolidated financial statements of the
Company included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section, reading the
latest available interim financial statements of the Company, inquiries
of officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited interim condensed consolidated financial
statements of the Company, if any, included in the Prospectus do not
comply as to form in all material respects with the
7
<PAGE>
applicable accounting requirements of the Act and the related
published Rules and Regulations or require any material
modifications to be made for them to be in conformity with generally
accepted accounting principles;
(B) at the date of the latest available consolidated balance sheet
of the Company read by such accountants, and at a subsequent
specified date not more than three business days prior to the
Closing Date, there was any decrease in the outstanding common
stock, or consolidated earnings reinvested in the business of the
Company other than any decrease resulting from the declaration of
regular quarterly cash dividends, or any issuance or assumption of
long-term debt by the Company, Philip Morris Incorporated, Philip
Morris International Inc., Kraft Foods, Inc. or Philip Morris
Capital Corporation (exclusive of any short-term borrowings
reclassified as long-term based upon the Company's ability and
intention to refinance these short-term borrowings on a long-term
basis), and, at the date of the latest available consolidated
balance sheet of the Company read by such accountants, there was any
decrease in consolidated net current assets or net assets, all as
compared with amounts shown on or included in the latest balance
sheet of the Company included in the Prospectus; or
(C) for the period from the date of the latest consolidated
statement of earnings of the Company included in the Prospectus to
the date of the latest available consolidated statement of earnings
of the Company read by such accountants there were any decreases, as
compared with the corresponding period of the previous year, in
consolidated operating revenues, operating income, net earnings or
the historical ratio of earnings to fixed charges of the Company and
consolidated subsidiaries;
except in all cases set forth in clauses (B) and (C) above for
issuances or assumptions or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
(iii) with respect to the unaudited capsule information of the
Company, if any, included in the Prospectus:
(A) on the basis of performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71 on the unaudited interim
condensed consolidated financial statements of the Company from which
such unaudited capsule information was derived, reading such unaudited
capsule information, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(1) the amounts contained in the unaudited capsule information
included in the Prospectus do not agree with the amounts set forth in
the unaudited interim condensed consolidated financial statements of
the Company from which such amounts were derived; and
(2) the amounts contained in the unaudited capsule information
included in the Prospectus were 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
Prospectus; or
(B) if the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71 have not been performed on
the unaudited interim condensed consolidated financial statements of
the Company from which such unaudited capsule information was
derived, they have:
(1) read the unaudited capsule information and agreed the amounts
contained therein with the Company's accounting records from which it
was derived; and
(2) inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether the
unaudited capsule information was 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
Prospectus; and
8
<PAGE>
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
included in the Prospectus and not covered by their letter delivered
pursuant to subsection (a) of this Section (in each case to the extent
that such dollar amounts, percentages and other financial information
are obtained from accounting records that are subject to the internal
control structure, policies and procedures of the Company's accounting
system or are derived directly from such accounting records by analysis
or computation) with the results obtained from procedures specified in
such letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for the purposes of this subsection.
(h) The Representatives shall have received, so long as financial
statements audited by any independent accountants for or with respect to
any entity acquired by the Company are included in the Prospectus, a
letter, dated the Closing Date, of such accountants confirming that as of a
specified date immediately prior to such acquisition and during the period
covered by the financial statements on which they reported, they were
independent accountants with respect to such entity within the meaning of
the Act and the applicable published Rules and Regulations thereunder and
stating in effect that:
(i) in their opinion, the consolidated financial statements audited
by them and included in the Prospectus comply in form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published Rules and Regulations, with
respect to Registration Statements on Form S-3; and
(ii) on the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in SAS No. 71, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that the unaudited
financial statements of such entity at any date and for any period
ending on or prior to the date of the latest unaudited balance sheet of
such entity included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations or any material
modifications should be made for them to be in conformity with
generally accepted accounting principles.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for purposes of this subsection.
(i) The Representatives shall have received from counsel, satisfactory to
the Representatives, such opinion or opinions, dated the Closing Date, with
respect to compliance with the laws of any country, other than the United
States, in whose currency Purchased Debt Securities or Debt Warrants are
denominated, the validity of the Securities, the Prospectus and other
related matters as they may 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.
(j) If applicable to the offering of any Securities, the Representatives
shall have received an opinion from Sutherland, Asbill & Brennan, L.L.P.,
special tax counsel for the Company, dated the Closing Date, confirming
their opinion as to United States tax matters set forth in the Prospectus.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as they reasonably request.
6. Indemnification and Contribution. (a) The Company will indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, 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
9
<PAGE>
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from any of
such documents in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein; and provided further that as to any
preliminary prospectus this indemnity agreement shall not inure to the benefit
of any Underwriter or any person controlling that Underwriter on account of
any loss, claim, damage or liability arising from the sale of Purchased
Securities to any person by that Underwriter if that Underwriter failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act, and the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in such preliminary prospectus was
corrected in the Prospectus, unless such failure resulted from non-compliance
by the Company with Section 4(d). For purposes of the second proviso to the
immediately preceding sentence, the term Prospectus shall not be deemed to
include the documents incorporated therein by reference, and no Underwriter
shall be obligated to send or give any supplement or amendment to any document
incorporated by reference in a preliminary prospectus or the Prospectus to any
person other than a person to whom such Underwriter has delivered such
incorporated documents in response to a written request therefor.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, 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 such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through the Representatives, if any, specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party 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 subsection (a) or (b) above. 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 wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such
claim, action, suit or proceeding, or (ii) be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be
a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against
any loss or liability by reason of such settlement or judgment.
10
<PAGE>
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of
the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Purchased Securities under the Terms Agreement
and the aggregate amount of the Purchased Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10%
of the aggregate amount of the Purchased Securities, the Representatives may
make arrangements satisfactory to the Company for the purchase of such
Purchased Securities by other persons, including any of the Underwriters, but
if no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments under this Agreement and the Terms Agreement, to purchase the
Purchased Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
amount of the Purchased Securities with respect to which such default or
defaults occur exceeds 10% of the aggregate amount of the Purchased Securities
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Purchased Securities by other persons are not made within 36
hours after such default, such Terms Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 8. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. As used
in this Section only, the "aggregate amount" of Purchased Securities shall
mean the aggregate principal amount of any Purchased Debt Securities plus the
public offering price of any Debt Warrants included in the relevant offering
of Purchased Securities. Nothing herein will relieve a defaulting Underwriter
from liability for its default. The respective commitments of the several
Underwriters for the purposes of this Section shall be determined without
regard to reduction in the respective Underwriters' obligations to purchase
the amount of Purchased Debt
11
<PAGE>
Securities set forth opposite their names in the Terms Agreement as a result
of Delayed Delivery Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements
will not apply.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
the Company or its officers and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person and will
survive delivery of and payment for the Purchased Securities. If the
obligations of the Underwriters with respect to any offering of Securities are
terminated pursuant to Section 7 or if for any reason the purchase of the
Purchased Securities by the Underwriters under a Terms Agreement is not
consummated, the Company shall remain responsible for the expenses to be paid
or reimbursed by it pursuant to Section 4 and the respective obligations of
the Company and the Underwriters pursuant to Section 6 shall remain in effect.
If for any reason the purchase of the Purchased Securities by the Underwriters
is not consummated other than because of the termination of this Agreement
pursuant to Section 7 or a failure to satisfy the conditions set forth in
Section 5(c), the Company shall reimburse the Underwriters, severally, for all
out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Securities.
9. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 120 Park Avenue, New York, New York
10017, Attention: G. Penn Holsenbeck, Vice President, Associate General
Counsel and Corporate Secretary.
10. Successors. This Agreement will inure to the benefit of and be binding
upon the Company and such Underwriters as are identified in Terms Agreements
and their respective successors and the officers and directors and controlling
persons referred to in Section 5, and no other person will have any right or
obligation hereunder.
11. Applicable Law. This Agreement and the Terms Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
12
<PAGE>
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M., New York
time, on .......... ........, 19....*.)
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]
Philip Morris Companies Inc.
c/o [Insert name and address of lead Underwriter]
Attention:
Gentlemen:
The undersigned hereby agrees to purchase from Philip Morris Companies Inc.,
a Virginia corporation ("Company"), and the Company agrees to sell to the
undersigned, [If one delayed closing, insert--as of the date hereof, for
delivery on , 19 ("Delivery Date"),]
$........................................
principal amount of the Company's [Insert title of debt securities] ("Debt
Securities") and
........................................
of the Company's [Insert title of warrants] ("Debt Warrants") (collectively,
the "Securities"), offered by the Company's Prospectus dated , 19 and a
Prospectus Supplement dated , 19 relating thereto, receipt of copies of
which is hereby acknowledged, at % of the principal amount of the Debt
Securities plus accrued interest, if any, and on the further terms and
conditions set forth in this Delayed Delivery Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Debt Securities and Debt Warrants in
the principal amounts and number, respectively, set forth below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT NUMBER
OF DEBT OF DEBT
DELIVERY DATE SECURITIES WARRANTS
------------- ---------------- --------
<S> <C> <C>
........................ .... ....
........................ .... ....
</TABLE>
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase for
delivery on [the] [each] Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next
day) funds at the office of at .M. on [the] [such]
Delivery Date upon delivery to the undersigned of the Securities to be
purchased by the undersigned [for delivery on such Delivery Date] in
definitive fully registered form and in such denominations or numbers and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to [the] [such] Delivery Date.
- --------
* Insert date which is third full business day prior to Closing Date under
the Terms Agreement.
13
<PAGE>
It is expressly agreed that the provisions for delayed delivery and payment
are for the sole convenience of the undersigned; that the purchase hereunder
of Securities is to be regarded in all respects as a purchase as of the date
of this Contract; that the obligation of the Company to make delivery of and
accept payment for, and the obligation of the undersigned to take delivery of
and make payment for, Securities on [the] [each] Delivery Date shall be
subject only to the conditions that (1) investment in the Securities shall not
at [the] [such] Delivery Date be prohibited under the laws of any jurisdiction
in the United States to which the undersigned is subject and (2) the Company
shall have sold to the Underwriters the total principal amount of the Debt
Securities less the principal amount thereof covered by this and other similar
Contracts. The undersigned represents that its investment in the Securities is
not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and which governs such investment.
Promptly after completion of the 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.
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 the acceptance of any such Contract 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 requested 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 when such counterpart is so mailed or delivered.
Yours very truly,
..........................................
(Name of Purchaser)
By .......................................
.......................................
(Title of Signatory)
.......................................
.......................................
(Address of Purchaser)
Accepted, as of the above date.
Philip Morris Companies Inc.
By ..................................
(Insert Title)
14
<PAGE>
PHILIP MORRIS COMPANIES INC.
("COMPANY")
DEBT SECURITIES AND WARRANTS TO PURCHASE
DEBT SECURITIES
TERMS AGREEMENT
, 199
Philip Morris Companies Inc.
120 Park Avenue
New York, New York 10017
Attention:Louis C. Camilleri,
Senior Vice President and Chief Financial Officer
Dear Sirs:
On behalf of the several Underwriters named in Schedule A hereto and for
their respective accounts, we offer to purchase, on and subject to the terms
and conditions of the Underwriting Agreement relating to Debt Securities and
Warrants to Purchase Debt Securities dated as of December 1, 1997 ("Underwriting
Agreement"), the following securities ("Securities") on the following terms:
DEBT SECURITIES
Title:
Principal Amount: $
Interest Rate: % from , 199 , payable:
Maturity:
Currency of Denomination:
Currency of Payment:
Form and Denomination:
Overseas Paying Agents:
Optional Redemption:
Sinking Fund:
Delayed Delivery Contracts: [authorized] [not authorized]
Delivery Date:
Minimum Contract:
Maximum aggregate principal amount:
Fee: %
Purchase Price: %, plus accrued interest, or amortized original issue
discount, if any, from 19 .
Expected Reoffering Price:
<PAGE>
DEBT WARRANTS
Number of Debt Warrants to be issued:
Debt Warrant Agreement:
Form of Debt Warrants: Registered
Issuable jointly with Debt Securities: [Yes] [No]
[Number of Debt Warrants issued with each $ principal amount of Debt
Securities:]
[Detachable Date:]
Date from which Debt Warrants are exercisable:
Date on which Debt Warrants expire: .
Exercise price of Debt Warrants:
Expected Reoffering price: $
Purchase price: $
Title of Warrant Debt Securities:
Principal amount of Warrant Debt Securities purchaseable upon exercise of one
Debt Warrant:
Interest Rate: % from , 199 , payable:
Maturity:
Currency of Denomination:
Currency of Payment:
Form and Denomination:
Overseas Paying Agents:
Optional Redemption:
Sinking Fund:
----------------
<PAGE>
Names and Addresses of Representatives:
The respective principal amounts of the Debt Securities and number of Debt
Warrants to be purchased by each of the Underwriters are set forth opposite
their names in Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein by
reference.
The Closing will take place at A.M., New York City time, on , 199 ,
at the offices of Philip Morris Companies Inc., 120 Park Avenue, New York, New
York.
The Securities will be made available for checking and packaging at the
office of The Chase Manhattan Bank at least 24 hours prior to the Closing
Date.
Please signify your acceptance by signing the enclosed response to us in the
space provided and returning it to us.
Very truly yours,
<PAGE>
SCHEDULE A
DEBT SECURITIES
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
</TABLE>
DEBT WARRANTS
<TABLE>
<CAPTION>
NUMBER OF DEBT
UNDERWRITER WARRANTS
----------- ------------------
<S> <C>
</TABLE>
<PAGE>
Exhibit 1(b)
Philip Morris Companies Inc.
$ Medium-Term Notes, Series C
Due From Nine Months to Thirty Years
From Date of Issue
Selling Agency Agreement
December , 1992
--
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, N.Y. 10281
Shearson Lehman Brothers Inc.
American Express Tower
World Financial Center
New York, N.Y. 10285
Dear Sirs:
Philip Morris Companies Inc., a Virginia corporation
(the "Company"), confirms its agreement with each of you with
respect to the issue and sale by the Company of up to $
aggregate principal amount of its Medium-Term Notes, Series C,
Due from Nine Months to Thirty Years from Date of Issue (the
"Notes"). The Notes will be issued under an indenture dated as
of August 1, 1990, as supplemented and amended by the First
Supplemental Indenture dated as of February 1, 1991 and the
Second Supplemental Indenture dated as of January 21, 1992 (as
the same may be further amended or supplemented from time to
time, the "Indenture"), between the Company and Chemical Bank, as
trustee (the "Trustee"). The Notes will be issued in minimum
denominations of $100,000 and in denominations exceeding such
amount by integral multiples of $1,000, or, in the case of Notes
denominated in a currency other than U.S. dollars, in the
denominations set forth in the applicable Pricing Supplement (as
defined below), will be issued only in fully registered form and
will have the annual interest rates, maturities and, if
appropriate, other terms set forth in a supplement to the
<PAGE>
prospectus referred to below. The Notes will be issued, and the
terms thereof established, in accordance with the Indenture and,
in the case of Notes sold pursuant to Section 2(a), the Medium-
Term Notes Administrative Procedures attached hereto as Exhibit A
(the "Procedures"). The Procedures may only be amended by
written agreement of the Company and you after notice to, and
with the approval of, the Trustee. For the purposes of this
Agreement, the term "Agent" shall refer to any of you (including
Lehman Special Securities Inc. acting from time to time on its
own behalf or on behalf of Shearson Lehman Brothers Inc.) acting
solely in the capacity as agent for the Company pursuant to
Section 2(a) and not as principal (collectively, the "Agents"),
the term the "Purchaser" shall refer to one of you (including
Lehman Special Securities Inc. acting from time to time on its
own behalf or on behalf of Shearson Lehman Brothers Inc.) acting
solely as principal pursuant to Section 2(b) and not as agent,
and the term "you" shall refer to you collectively whether at any
time any of you is acting in both such capacities or in either
such capacity; provided, however, that from time-to-time pursuant
to Section 2(a), an agent other than you may be selected as an
agent for purposes of the Company accepting an offer to purchase
Notes and such other agent, for purposes of such transaction, may
be considered an Agent or Purchaser for purposes of this
Agreement.
1. Representations and Warranties. The Company
------------------------------
represents and warrants to, and agrees with, you as set forth
below in this Section 1. Certain terms used in this Section 1
are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933 (the "Act") and has
filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File
Number: 33-48973) and a registration statement on Form S-3
(File Number: 33- ), including a basic prospectus, each
of which registration statements has become effective, for
the registration under the Act of $427,700,000 and
$3,000,000,000, respectively, aggregate principal amount of
debt securities (the "Securities"), including the Notes.
Such registration statement (File Number: 33-48973) and such
registration statement (File Number: 33- ), each
including incorporated documents, exhibits and financial
statements and each as amended at the Execution Time (as
defined below), are hereinafter referred to as the "Initial
Registration Statement" and the "Last Registration
Statement", respectively, and singly as a "Registration
Statement" and collectively as the "Registration
Statements". Each Registration Statement, as amended at the
Execution Time, meets the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and complies in all other
material respects with said Rule. The Company will file
with the Commission pursuant to the applicable paragraph of
Rule 424(b) under the Act a supplement to the form of
2
<PAGE>
prospectus included in such Registration Statement relating
to the Notes and the plan of distribution thereof (the
"Prospectus Supplement"). In connection with the sale of
Notes the Company proposes to file with the Commission
pursuant to the applicable paragraph of Rule 424(b) under
the Act further supplements to the Prospectus Supplement
specifying the interest rates, maturity dates and, if
appropriate, other terms of the Notes sold pursuant hereto
or the offering thereof.
(b) As of the Execution Time, on the Effective Date,
when any supplement to the Prospectus is filed with the
Commission, as of the date of any Terms Agreement (as
defined by Section 2(b)) and at the date of delivery by the
Company of any Notes sold hereunder (a "Closing Date"), (i)
the Registration Statements, as amended as of any such time,
and the Prospectus, as supplemented as of any such time, and
the Indenture will comply in all material respects with the
applicable requirements of the Act, the Trust Indenture Act
of 1939 (the "Trust Indenture Act") and the Securities
Exchange Act of 1934 (the "Exchange Act") and the respective
rules thereunder; (ii) the Registration Statements, as
amended as of any such time, did not or will not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and
(iii) the Prospectus, as supplemented as of any such time,
will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however,
-------- -------
that the Company makes no representations or warranties as
to (i) those parts of the Registration Statements which
shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of
the Trustee or (ii) the information contained in or omitted
from the Registration Statements or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by any of
you specifically for use in connection with the preparation
of the Registration Statements or the Prospectus (or any
supplement thereto).
(c) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term the
"Effective Date" shall mean with respect to each
Registration Statement each date that each such Registration
Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall
mean the form of basic prospectus relating to the Securities
contained in the Last Registration Statement at the
Effective Date. "Prospectus" shall mean the Basic
3
<PAGE>
Prospectus as supplemented by the Prospectus Supplement.
"Rule 415" and "Rule 424" refer to such rules under the Act.
Any reference herein to the Registration Statements, the
Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of each Registration Statement or
the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statements,
the Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act after the
Effective Date of each Registration Statement or the issue
date of the Basic Prospectus, the Prospectus Supplement or
the Prospectus, as the case may be, deemed to be
incorporated therein by reference. Notwithstanding anything
to the contrary set forth herein, at such time as the
Company shall have determined and certified to the Agents
that all Securities registered under the Initial
Registration Statement or the Last Registration Statement
have been issued, references to "each Registration
Statement", either "Registration Statement" or "the
Registration Statements" herein shall mean either of the
Initial Registration Statement or the Last Registration
Statement under which Securities remain to be issued.
2. Appointment of Agents; Solicitation by the Agents
-------------------------------------------------
of Offers to Purchase; Sales of Notes to a Purchaser. (a)
- ----------------------------------------------------
Subject to the terms and conditions set forth herein, the Company
hereby authorizes each of the Agents to act as its agent to
solicit offers for the purchase of all or part of the Notes from
the Company.
On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the
Agents agrees, as agent of the Company, to use its best efforts
to solicit offers to purchase the Notes from the Company upon the
terms and conditions set forth in the Prospectus (and any
supplement thereto) and in the Procedures.
The Company reserves the right, in its sole discretion,
to instruct the Agents to suspend at any time, for any period of
time or permanently, the solicitation of offers to purchase the
Notes. Upon receipt of instructions from the Company, the Agents
will forthwith suspend solicitation of offers to purchase Notes
from the Company until such time as the Company has advised them
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, on
the Closing Date with respect to each sale of Notes by the
Company as a result of a solicitation made by such Agent, in an
4
<PAGE>
amount equal to that percentage specified in Schedule I hereto of
the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by
an Agent as agent for the Company at such time and in such
amounts as such Agent deems advisable. The Company may from time
to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement is in effect
- -------- -------
the Company shall not solicit offers to purchase Notes through
any agent other than an Agent. The Company may accept an offer
to purchase Notes through an agent other than an Agent, provided
--------
that (i) the Company did not solicit such offer, (ii) any
agreement with respect to such purchase will have terms and
conditions (including, without limitation, commission rates) with
respect to such purchase identical to the terms and conditions
that would apply to such purchase under this Agreement if such
agent was an Agent (which may be accomplished by incorporating by
reference in such agreement the terms and conditions of this
Agreement in a form similar to Exhibit C hereto), (iii) such
agreement shall not provide for further offers or purchases and
(iv) the Company shall notify the Agents promptly after the
execution of such agreement and shall provide the Agents with a
copy of such agreement promptly following such purchase.
(b) Subject to the terms and conditions stated herein,
whenever the Company and one of you determines that the Company
shall sell Notes directly to you as Purchaser, each such sale of
Notes shall be made in accordance with the terms of this
Agreement and any supplemental agreement relating thereto between
the Company and the Purchaser. Each such supplemental agreement
(which shall be substantially in the form of Exhibit B) is herein
referred to as a "Terms Agreement". The Purchaser's commitment
to purchase Notes pursuant to any Terms Agreement shall be deemed
to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject
to the terms and conditions herein set forth. Each Terms
Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto, specify the principal amount of such
Notes, the maturity date, the price to be paid to the Company for
such Notes, the currency in which principal and interest is
payable if other than United States dollars, the rate at which
interest will be paid on the Notes, the Closing Date for such
Notes, the place of delivery of the Notes and payment therefor,
the method of payment and any modification of the requirements
for the delivery of the opinions of counsel, the certificates
from the Company or its officers, and the letter from the
Company's independent public accountants, pursuant to Section
6(b). Such Terms Agreement shall also specify the period of time
referred to in Section 4(1).
Delivery of the certificates for Notes sold to the
Purchaser pursuant to any Terms Agreement shall be made as agreed
5
<PAGE>
to between the Company and the Purchaser as set forth in the
respective Terms Agreement, not later than the Closing Date set
forth in such Terms Agreement, against payment of funds to the
Company in the net amount due to the Company for such Notes by
the method and in the form set forth in the respective Terms
Agreement.
3. Offering and Sale of Notes. Each Agent and the
--------------------------
Company agree to perform the respective duties and obligations
specifically provided to be performed by them in the Procedures.
4. Agreements. The Company agrees with you that:
----------
(a) Prior to the termination of the offering of the
Notes, the Company will not file any amendment to either
Registration Statement or any supplement to the Prospectus
(except for a supplement relating to an offering of
Securities other than the Notes) unless the Company has
furnished each of you a copy for your review prior to filing
and will not file any such proposed amendment or supplement
to which any of you reasonably objects. Subject to the
foregoing sentence, the Company will cause each supplement
to the Prospectus to be filed with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to
you of such filing. The Company will promptly advise each
of you (i) when the Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule
424(b), (ii) when, prior to the termination of the offering
of the Notes, any amendment of either Registration Statement
shall have been filed or become effective, (iii) of any
request by the Commission for any amendment of either
Registration Statement or supplement to the Prospectus or
for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of
either Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of
the receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes for sale
in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the
Notes is required to be delivered under the Act, any event
occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
if it shall be necessary to amend either Registration
Statement or to supplement the Prospectus to comply with the
6
<PAGE>
Act or the Exchange Act or the respective rules thereunder,
the Company promptly will (i) notify each of you to suspend
solicitation of offers to purchase Notes (and, if so
notified by the Company, each of you shall forthwith suspend
such solicitation and cease using the Prospectus as then
supplemented), (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and
(iii) supply any supplemented Prospectus to each of you in
such quantities as you may reasonably request. If such
amendment or supplement, and any documents, certificates and
opinions furnished to each of you pursuant to paragraph (f)
of this Section 4 in connection with the preparation or
filing of such amendment or supplement are satisfactory in
all respects to you, you will, upon the filing of such
amendment or supplement with the Commission and upon the
effectiveness of an amendment to either Registration
Statement, if such an amendment is required, resume your
obligation to solicit offers to purchase Notes hereunder.
(c) As soon as practicable, the Company will make
generally available to its security holders and to each of
you an earnings statement or statements of the Company and
its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to each of you and your
counsel, without charge, copies of each Registration
Statement (including exhibits thereto) and, so long as
delivery of a prospectus may be required by the Act, as many
copies of the Prospectus and any supplement thereto as you
may reasonably request.
(e) The Company will arrange for the qualification of
the Notes for sale under the laws of such jurisdictions as
any of you may designate, will maintain such qualifications
in effect so long as required for the distribution of the
Notes, and will arrange for the determination of the
legality of the Notes for purchase by investors.
(f) The Company shall furnish to each of you such
information, documents, certificates of officers of the
Company and opinions of counsel for the Company relating to
the business, operations and affairs of the Company, the
Registration Statements, the Prospectus, and any amendments
thereof or supplements thereto, the Indenture, the Notes,
this Agreement, the Procedures and the performance by the
Company and you of its and your respective obligations
hereunder and thereunder as any of you may from time to time
and at any time prior to the termination of this Agreement
reasonably request.
7
<PAGE>
(g) The Company shall, whether or not any sale of the
Notes is consummated, (i) pay all expenses incident to the
performance of its obligations under this Agreement,
including the fees and disbursements of its accountants and
counsel, the cost of printing or other production and
delivery of the Registration Statements, the Prospectus, all
amendments thereof and supplements thereto, the Indenture,
this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and
delivering the Notes, the fees and disbursements, including
fees of counsel, incurred in compliance with Section 4(e),
the fees and disbursements of the Trustee, the Exchange Rate
Agent and the Calculation Agent and the fees of any agency
that rates the Notes and (ii) pay the reasonable fees and
expenses of your counsel incurred in connection with this
Agreement.
(h) Each acceptance by the Company of an offer to
purchase Notes will be deemed to be a reconfirmation to you
of the representations and warranties of the Company in
Section 1(b).
(i) Each time that either Registration Statement or
the Prospectus is amended or supplemented (other than by an
amendment or supplement relating to any offering of
Securities other than the Notes or providing solely for the
specification of or a change in the maturity dates, the
interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto), the Company will deliver
or cause to be delivered promptly to each of you a
certificate of the Company, signed by the Chairman of the
Board or the President or Vice President and the principal
financial or accounting officer of the Company, dated the
date of the effectiveness of such amendment or the date of
the filing of such supplement, in form reasonably
satisfactory to you, of the same tenor as the certificate
referred to in Section 5(e) but modified to relate to the
last day of the fiscal quarter for which financial
statements of the Company were last filed with the
Commission and to the Registration Statements and the
Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such
supplement.
(j) Each time that either Registration Statement or
the Prospectus is amended or supplemented (other than by an
amendment or supplement (i) relating to any offering of
Securities other than the Notes, (ii) providing solely for
the specification of or a change in the maturity dates, the
interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto or (iii) setting forth or
incorporating by reference financial statements or other
information as of and for a fiscal quarter, unless, in the
case of clause (iii) above, in the reasonable judgment of
8
<PAGE>
any of you, such financial statements or other information
are of such a nature that an opinion of counsel should be
furnished), the Company shall furnish or cause to be
furnished promptly to each of you a written opinion of
counsel of the Company satisfactory to each of you, dated
the date of the effectiveness of such amendment or the date
of the filing of such supplement, in form satisfactory to
each of you, of the same tenor as the opinion referred to in
Section 5(b) but modified to relate to the Registration
Statements and the Prospectus as amended and supplemented to
the time of the effectiveness of such amendment or the
filing of such supplement or, in lieu of such opinion,
counsel last furnishing such an opinion to you may furnish
each of you with a letter to the effect that you may rely on
such last opinion to the same extent as though it were dated
the date of such letter authorizing reliance (except that
statements in such last opinion will be deemed to relate to
the Registration Statements and the Prospectus as amended
and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement).
(k) Each time that either Registration Statement or
the Prospectus is amended or supplemented to set forth
amended or supplemental financial information, the Company
shall cause its independent public accountants promptly to
furnish each of you a letter, dated the date of the
effectiveness of such amendment or the date of the filing of
such supplement, in form satisfactory to each of you, of the
same tenor as the letter referred to in Section 5(f) with
such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated
by reference in the Registration Statements and the
Prospectus, as amended or supplemented to the date of such
letter; provided, however, that, if either Registration
-------- -------
Statement or the Prospectus is amended or supplemented
solely to include or incorporate by reference financial
information as of and for a fiscal quarter, the Company's
independent public accountants may limit the scope of such
letter, which shall be satisfactory in form to each of you,
to the unaudited financial statements, the related
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" and any other information of an
accounting, financial or statistical nature included in such
amendment or supplement, unless, in the reasonable judgment
of any of you, such letter should cover other information or
changes in specified financial statement line items.
(l) During the period, if any, specified in any Terms
Agreement, the Company shall not, without the prior consent
of the Purchaser thereunder, issue or announce the proposed
issuance of any of its debt securities, including Notes, in
the United States, (i) (A) in the case of a Terms Agreement
relating to Notes with a maturity of ten years or less,
having a maturity of less than 20 years, or (B) in the case
9
<PAGE>
of a Terms Agreement relating to Notes having a maturity of
greater than ten years, having a maturity of greater than
five years, and (ii) denominated in the same currency or
currency unit as specified in the applicable Terms
Agreement.
5. Conditions to the Obligations of the Agents. The
-------------------------------------------
obligations of each Agent to solicit offers to purchase the Notes
shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
Execution Time, on the Effective Date, when any supplement to the
Prospectus is filed with the Commission and as of each Closing
Date, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, shall have been filed
in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of
the Registration Statements shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to each Agent the
opinion of Hunton & Williams, counsel for the Company, dated
the Execution Time, to the effect that:
(i) The Company has been duly incorporated and is
an existing corporation in good standing under the laws
of the Commonwealth of Virginia, with corporate power
and authority to own its properties and conduct its
business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions
in which it owns or leases substantial properties or in
which the conduct of its business requires such
qualification and in which the failure to so qualify
would have a material adverse effect on the Company;
(ii) Philip Morris Incorporated, Philip Morris
International Inc. and Kraft General Foods, Inc. have
been duly incorporated and are existing corporations in
good standing under the laws of their respective
jurisdictions of incorporation, with corporate power
and authority to own their respective properties and
conduct their respective businesses as described in the
Prospectus; all outstanding shares of capital stock of
Philip Morris Incorporated, Philip Morris International
Inc. and Kraft General Foods, Inc. are owned by the
Company, free and clear of any lien, pledge and
encumbrance or claim of any third party;
10
<PAGE>
(iii) the Company's authorized equity
capitalization is as set forth in the Prospectus; and
the Notes conform to the description thereof contained
in the Prospectus (subject to the insertion in the
Notes of the maturity dates, the interest rates and
other similar terms thereof which will be described in
supplements to the Prospectus as contemplated by the
fourth sentence of Section 1(a) of this Agreement);
(iv) the Indenture has been duly authorized,
executed and delivered by the Company, has been duly
qualified under the Trust Indenture Act, and
constitutes a valid and legally binding instrument
enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws
of general applicability relating to or affecting
creditors' rights and to general equity principles; and
the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the
purchasers thereof, will constitute valid and legally
binding obligations of the Company entitled to the
benefits of the Indenture;
(v) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its subsidiaries, of a character required to be
disclosed in the Registration Statements which is not
adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character
required to be described in the Registration Statements
or Prospectus, or to be filed as an exhibit, which is
not described or filed as required; and the statements
included or incorporated in the Prospectus describing
any legal proceedings or material contracts or
agreements relating to the Company fairly summarize
such matters;
(vi) the Registration Statements have become
effective under the Act; any required filing of the
Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statements has been
issued, no proceedings for that purpose have been
instituted or threatened, and the Registration
Statements and the Prospectus (other than the financial
statements and other financial and statistical
information contained therein as to which such counsel
need express no opinion) comply as to form in all
11
<PAGE>
material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules
thereunder; and such counsel has no reason to believe
that either Registration Statement at the Effective
Date or at the Execution Time contained any untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or
necessary to make the statements therein not misleading
or that the Prospectus includes any untrue statement of
a material fact or omits to state a material fact
necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein except such as have been obtained
under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with
the sale of the Notes as contemplated by this Agreement
and such other approvals (specified in such opinion) as
have been obtained;
(ix) neither the execution and delivery of the
Indenture, the issue and sale of the Notes, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach of, or
constitute a default under, the charter or by-laws of
the Company or the terms of any indenture or other
agreement or instrument known to such counsel and to
which the Company or any of its subsidiaries is a party
or bound, or any order or regulation known to such
counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
subsidiaries; and
(x) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statements.
In rendering such opinion, such counsel may state that (1)
in clause (iv) with respect to the validity and
enforceability of the Indenture and the Notes, and in clause
(viii) and in clause (ix) such counsel has assumed that
under the laws of any country in whose currency any Notes
are denominated, if other than in U.S. dollars, that no
consent, approval, authorization, or order of, or filing
12
<PAGE>
with any governmental agency, body or court is required for
the consummation of the transactions contemplated hereunder
in connection with the issuance and sale of the Notes and
compliance with the terms and provisions thereof will not
result in any breach or violation of any of the terms and
provisions in any statute, rule, regulation or order of any
governmental agency or body or any court, and (2) in clause
(iv) with respect to the enforceability of the Indenture, no
opinion is expressed with respect to Section 516 thereof.
Such counsel may note that (i) a New York statute provides
that with respect to a foreign currency obligation a court
of the State of New York shall render a judgment or decree
in such foreign currency and such judgment or decree shall
be converted into currency of the United States at the rate
of exchange prevailing on the date of entry of such judgment
or decree and (ii) with respect to a foreign currency
obligation a United States Federal court in New York may
award judgment in United States dollars, provided that such
counsel expresses no opinion as to the rate of exchange such
court would apply. In rendering such opinion, such counsel
may rely (A) as to matters involving the application of laws
of any jurisdiction other than the States of New York or
Delaware, the Commonwealth of Virginia or the United States,
to the extent deemed proper and specified in such opinion,
upon the opinion of other counsel of good standing believed
to be reliable and who are satisfactory to counsel for the
Agent and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus
in this paragraph (b) include any supplements thereto at the
date such opinion is rendered.
(c) The Company shall have furnished to each Agent the
opinion of Sutherland, Asbill & Brennan, special tax counsel
for the Company, dated the Execution Time, confirming their
opinion contained under the heading "Certain United States
Federal Income Tax Consequences" in the Prospectus
Supplement and the accuracy in all material respects of all
other statements contained under the heading "Certain United
States Federal Income Tax Consequences".
(d) Each Agent shall have received from Simpson
Thacher & Bartlett, counsel for the Agents, such opinion or
opinions, dated the date hereof, with respect to the
issuance and sale of the Notes, the Indenture, the
Registration Statements, the Prospectus (together with any
supplement thereto) and other related matters as the Agents
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.
(e) The Company shall have furnished to each Agent a
certificate of the Company, signed by the Chairman of the
Board or the President or Vice President and the principal
13
<PAGE>
financial or accounting officer of the Company, dated the
Execution Time, to the effect that the signers of such
certificate have carefully examined the Registration
Statements, the Prospectus, any supplement to the Prospectus
and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the date hereof with the
same effect as if made on the date hereof and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied as a condition to the obligation
of the Agents to solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness
of either Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse
change in the condition (financial or other), earnings,
business or properties of the Company and its
subsidiaries, whether or not arising from transactions
in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(f) At the Execution Time, Coopers & Lybrand shall
have furnished to each Agent a letter or letters (which may
refer to letters previously delivered to the Agent), dated
as of the Execution Time, in form and substance satisfactory
to the Agents, confirming that they are independent
accountants within the meaning of the Act and the respective
applicable published rules and regulations thereunder and
stating in effect that:
(i) in their opinion, the financial statements
and schedules examined by them and included in
the Registration Statements and the Prospectus relating
to the Notes comply in form in all material
respects with the applicable accounting requirements
of the Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of any interim
unaudited consolidated financial statements of the
Company included in the Prospectus, inquiries of
officials of the Company who have responsibility for
financial and accounting matters and other specified
procedures, nothing came to their attention that caused
them to believe that the unaudited financial
14
<PAGE>
statements, if any, of the Company included in the
Prospectus do not comply in form in all material
respects with the applicable accounting requirements of
the Exchange Act as it applies to Quarterly Reports on
Form 10-Q and the related published rules and
regulations or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the latest
audited consolidated financial statements of the
Company included in the Prospectus, except as otherwise
specified with respect to consistency in such letter;
(iii) on the basis of a reading of the latest
available interim financial statements of the Company,
inquiries of officials of the Company who have
responsibility for financial and accounting matters and
other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited capsule information of the
Company and its subsidiaries, if any, included in
the 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 Prospectus;
(B) at the date of the latest available
consolidated balance sheet of the Company read by
such accountants, or at a subsequent specified
date not more than five business days prior to the
date of the letter, there was any decrease in the
outstanding common stock or consolidated earnings
reinvested in the business of the Company other
than any decrease resulting from the declaration
of regular quarterly cash dividends, or any
issuance or assumption of long-term debt by the
Company, Philip Morris Incorporated, Philip Morris
International Inc., Kraft General Foods, Inc. or
Philip Morris Capital Corporation or, at the date
of the latest available consolidated balance sheet
of the Company read by such accountants, there was
any decrease in consolidated net current assets or
net assets, as compared with amounts shown on or
included in the latest balance sheet of the
Company included in the Prospectus; or
(C) for the period from the date of the
latest consolidated income statement of the
15
<PAGE>
Company included in the Prospectus to the date of
the latest available consolidated income statement
of the Company read by such accountants there were
any decreases, as compared with the corresponding
period of the previous year in consolidated
operating revenues, operating income, net earnings
or the historical ratio of earnings to fixed
charges of the Company and consolidated
subsidiaries;
except in all cases set forth in clauses (B) and (C) above
for issuances or assumptions or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter;
(iv) on the basis of a reading of any unaudited
pro forma condensed combined financial statements of
the Company included in the Prospectus, inquiries of
officials of the Company who have responsibility for
financial and accounting matters and other specified
procedures, nothing came to their attention that caused
them to believe that the unaudited pro forma condensed
combined financial statements included in the
Prospectus do not comply in form in all material
respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X and that the pro forma
reclassifications and adjustments have not been
properly applied to the historical amounts in the
compilation of those statements; and
(v) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and
other financial information contained in the Prospectus
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived
from the general accounting records of the Company and
its subsidiaries subject to the internal controls of
the Company's accounting system or are derived directly
from such records by analysis or computation) with the
results obtained from inquiries, a reading of such
general accounting records and other procedures
specified in such letter and have found such dollar
amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
References to the Prospectus in this paragraph (f)
include any supplement thereto at the date of the letter.
All financial statements and schedules included in
material incorporated by reference into the Prospectus shall
16
<PAGE>
be deemed included in the Prospectus for purposes of this
subsection.
(g) At the Execution Time, each Agent shall have
received, so long as financial statements examined by any
independent accountants for or with respect to any entity
acquired by the Company are included in the Prospectus, a
letter or letters of such accountants (which may refer to
letters previously delivered to the Agent), dated as of the
Execution Time, in form and substance satisfactory to the
Agents, confirming that as of a specified date immediately
prior to such acquisition and during the period covered by
the financial statements on which they reported, they were
independent accountants with respect to such entity within
the meaning of the Act and the respective applicable
published rules and regulations thereunder and stating in
effect that:
(i) in their opinion, the consolidated financial
statements examined by them and included in the
Registration Statements and the Prospectus comply in
form in all material respects with the applicable
accounting requirements of the Act and the related
published rules and regulations with respect to
registration statements on Form S-3; and
(ii) on the basis of specified procedures, nothing
came to their attention that caused them to believe
that the unaudited financial statements of such entity
at any date and for any period ending on or prior to
the date of the latest unaudited balance sheet of such
entity included or incorporated in the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements of the Act and the
related published rules and regulations or are not
stated on a basis substantially consistent with that of
the latest annual financial statements of such entity
examined by such independent accountants included in
the Prospectus.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be
deemed included in the Prospectus for purposes of this
subsection.
References to the Prospectus in this paragraph (g)
include any supplement thereto at the date of the letter.
(h) Prior to the Execution Time, the Company shall
have furnished to each Agent such further information,
documents, certificates and opinions of counsel as the
Agents may reasonably request.
17
<PAGE>
If any of the conditions specified in this Section 5
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to such Agents and its counsel, this Agreement and
all obligations of any Agent hereunder may be cancelled at any
time by the Agents. Notice of such cancellation shall be given
to the Company in writing or by telephone or telecopier confirmed
in writing.
The documents required to be delivered by this Section
5 shall be delivered at the office of Hunton & Williams, counsel
for the Company, at 200 Park Avenue, New York, New York, on the
date hereof.
6. Conditions to the Obligations of the Purchaser.
----------------------------------------------
The obligations of the Purchaser to purchase any Notes will be
subject to the accuracy of the representations and warranties on
the part of the Company herein as of the date of any related
Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statements shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) If specified by any related Terms Agreement and
except to the extent modified by such Terms Agreement, the
Purchaser shall have received, appropriately updated, (i) a
certificate of the Company, dated as of the Closing Date, to
the effect set forth in Section 5(e) (except that references
to the Prospectus shall be to the Prospectus as supplemented
at the time of execution of the Terms Agreement), (ii) the
opinion of Hunton & Williams, counsel for the Company, dated
as of the Closing Date, to the effect set forth in Section
5(b), (iii) if required, the opinion of Sutherland, Asbill &
Brennan, special tax counsel for the Company, to the effect
set forth in Section 5(c), (iv) the opinion of Simpson
Thacher & Bartlett, counsel for the Purchaser, dated as of
the Closing Date, to the effect set forth in Section 5(d),
(iv) the letter of Coopers & Lybrand, independent
accountants for the Company, dated as of the Closing Date,
to the effect set forth in Section 5(f), and (v) so long as
financial statements examined by any independent accountants
for any entity acquired by the Company are included in the
Prospectus, the letter of such accountants, dated as of the
Closing Date, to the effect set forth in Section 5(g).
18
<PAGE>
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement and any Terms Agreement, or if any
of the opinions and certificates mentioned above or elsewhere in
this Agreement or such Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance
to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the
Notes subject thereto may be cancelled at, or at any time prior
to, the respective Closing Date by the Purchaser. Notice of such
cancellation shall be given to the Company in writing or by
telephone or telecopier confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to
---------------------------------------------------
Purchase. The Company agrees that any person who has agreed to
- --------
purchase and pay for any Note, including a Purchaser and any
person who purchases pursuant to a solicitation by any of the
Agents, shall have the right to refuse to purchase such Note if,
at the Closing Date therefor, either (a) any condition set forth
in Section 5 or 6, as applicable, shall not be satisfied or
(b) subsequent to the agreement to purchase such Note, any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries shall have occurred the effect of which is, in the
judgment of the Purchaser or the Agent which presented the offer
to purchase such Note, as applicable, so material and adverse as
to make it impractical or inadvisable to proceed with the
delivery of such Note.
8. Indemnification and Contribution. (a) The Company
--------------------------------
agrees to indemnify and hold harmless each of you and each person
who controls each of you within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which you, they or any of you
or them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the
registration of the Securities as originally filed or in any
amendment thereof, or in the Prospectus or any preliminary
Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for
19
<PAGE>
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
by any of you specifically for use in connection with the
preparation thereof, and (ii) such indemnity with respect to the
Prospectus or any preliminary Prospectus shall not inure to the
benefit of any of you (or any person controlling any of you) from
whom the person asserting any such loss, claim, damage or lia-
bility purchased the Notes which are the subject thereof if such
person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated
therein by reference at or prior to the confirmation of the sale
of such Notes to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a
material fact contained in the Prospectus or any preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as
supplemented). This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who
signs the Registration Statements and each person who controls
the Company within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity from the
Company to you, but only with reference to written information
relating to such of you furnished to the Company by such of you
specifically for use in the preparation of the documents referred
to in the foregoing indemnity. This indemnity agreement will be
in addition to any liability which you may otherwise have. The
Company acknowledges that the statements set forth in the last
paragraph of the cover page, and under the heading "Plan of
Distribution", of the Prospectus Supplement constitute the only
information furnished in writing by any of you for inclusion in
the documents referred to in the foregoing indemnity, and you
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,
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
20
<PAGE>
to the extent that it may elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action
- -------- -------
include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available
to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert 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 separate
counsel in connection with the assertion 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 you in the case of paragraph (a) of this Section 8,
representing the indemnified parties under such paragraph (a) 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; and
except that, if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in paragraph (a) of this Section 8 is due in
accordance with its terms but is for any reason held by a court
to be unavailable from the Company on grounds of policy or
otherwise, the Company and each of you 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 any of
you may be subject in such proportion so that each of you is
responsible for that portion represented by the percentage that
the aggregate commissions received by such of you pursuant to
Section 2 in connection with the Notes from which such losses,
claims, damages and liabilities arise (or, in the case of Notes
sold pursuant to a Terms Agreement, the aggregate commissions
that would have been received by such of you if such commissions
21
<PAGE>
had been payable), bears to the aggregate principal amount of
such Notes sold and the Company is responsible for the balance;
provided, however, that (y) in no case shall any of you be
- -------- -------
responsible for any amount in excess of the commissions received
by such of you in connection with the Notes from which such
losses, claims, damages and liabilities arise (or, in the case of
Notes sold pursuant to a Terms Agreement, the aggregate
commissions that would have been received by such of you if such
commissions had been payable) and (z) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls any of you
within the meaning of the Act shall have the same rights to
contribution as you and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed either Registration
Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to
clause (z) of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than
under this paragraph (d).
9. Termination. (a) This Agreement will continue in
-----------
effect until terminated as provided in this Section 9. This
Agreement may be terminated by either the Company as to any of
you or any of you insofar as this Agreement relates to such of
you, giving written notice of such termination to such of you or
the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day
following the receipt of such notice by the party to whom such
notice is given. In the event of such termination, no party
shall have any liability to the other party hereto, except as
provided in the fourth paragraph of Section 2(a), Section 4(g),
Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to
termination in the absolute discretion of the Purchaser, by
notice given to the Company prior to delivery of any payment for
Notes to be purchased thereunder, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended
by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have
been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall
22
<PAGE>
have been declared either by Federal or New York State
authorities, or (iii) there shall have occurred any outbreak or
material escalation of hostilities or other calamity or crisis
the effect of which on the financial markets or the United States
is such as to make it, in the judgment of the Purchaser,
impracticable to market such Notes.
10. Representations and Indemnities to Survive. The
------------------------------------------
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of you
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 you or the Company or any of the officers, directors
or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Notes. The provisions of
Sections 4(g) and 8 hereof shall survive the termination or
cancellation of this Agreement.
11. Notices. All communications hereunder will be in
-------
writing and effective only on receipt, and, if sent to any of
you, will be mailed, delivered or telecopied and confirmed to
such of you, at the address specified in Schedule I hereto; or,
if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at 120 Park Avenue, New York, New York 10017,
Attention: Alfonso L. Carney, Jr., Assistant Secretary.
12. Successors. This Agreement will inure to the
----------
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed
--------------
by and construed in accordance with the laws of the State of New
York.
23
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company
and you.
Very truly yours,
PHILIP MORRIS COMPANIES INC.
By:
-------------------------
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
SALOMON BROTHERS INC
By:
--------------------------
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:
--------------------------
SHEARSON LEHMAN BROTHERS INC.
By:
--------------------------
24
<PAGE>
SCHEDULE I
The Company agrees to pay each Agent a commission equal
to the following percentage of the principal amount of each Note
sold by such Agent:
<TABLE>
<CAPTION>
Maturity Commission Rate
-------- as a % of Principal
Amount
-------------------
<S> <C>
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years up to and including 30 years .750%
</TABLE>
Address for Notice to you:
Notices to Salomon Brothers Inc shall be directed to it
at Seven World Trade Center, New York, New York 10048, Attention
of the Medium Term Note Department.
Notices to Merrill Lynch & Co. shall be directed to it
at Merrill Lynch World Headquarters, North Tower - World
Financial Center, New York, New York, 10281 Attention of Mark R.
Meyer - MTN Product Management.
Notices to Shearson Lehman Brothers Inc. shall be
directed to it at American Express Tower, 9th Floor, World
Financial Center, New York, New York 10285, Attention of Medium
Term Note Department.
<PAGE>
EXHIBIT A
Philip Morris Companies Inc.
MEDIUM-TERM NOTES, SERIES C, ADMINISTRATIVE PROCEDURES
-------------
December , 1992
--
The administrative procedures and specific terms of the
offering of Medium-Term Notes, Series C (the "Notes"), on a
continuous basis by Philip Morris Companies Inc. ("the Company")
pursuant to the Selling Agency Agreement, dated as of December
,1992 (the "Agency Agreement") between the Company and Salomon
- --
Brothers Inc, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, and Shearson Lehman Brothers Inc.
(including its wholly owned subsidiary, Lehman Special Securities
Inc., acting on its own behalf or on behalf of Shearson Lehman
Brothers Inc.) (each an "Agent") are explained below. In the
Agency Agreement, the Agents have agreed to use their best
efforts to solicit purchases of the Notes. Each Agent, as
principal, may purchase Notes for its own account pursuant to the
terms and settlement details of a terms agreement entered into
between the Company and such Agent, as contemplated by the Agency
Agreement between them.
Each Note will be issued under an indenture dated as of
August 1, 1990, as supplemented and amended by the First
Supplemental Indenture dated as of February 1, 1991 and the
Second Supplemental Indenture dated as of January 21, 1992 (as
the same may be further amended or supplemented from time to
time, the "Indenture"), between the Company and Chemical Bank
("CB"), as trustee (the "Trustee"). Notes will bear interest at
either fixed rates ("Fixed Rate Notes") or floating rates
("Floating Rate Notes"). Each Note will be represented by either
a Global Security (as defined hereinafter) delivered to CB, as
agent for the Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC ("a Book-Entry Note") or
a certificate delivered to the Holder thereof or a Person
designated by such Holder (a "Certificated Note"). An owner of a
Book-Entry Note will not be entitled to receive a certificate
representing such a Note.
CB will act as Paying Agent for the payment of
principal of and premium, if any, and interest on the Notes and
will perform, as Paying Agent, unless otherwise specified, the
other duties specified herein. Book-Entry Notes will be issued
in accordance with the administrative procedures set forth in
Part I hereof, and Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part
<PAGE>
II hereof. Unless otherwise defined herein, terms defined in the
Indenture shall be used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES.
In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC,
CB will perform the custodial, document control and
administrative functions described below, in accordance with its
respective obligations under a Letter of Representation from the
Company and CB to DTC and a Medium-Term Note Certificate
Agreement between CB and DTC, each dated as of the date hereof,
and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as defined
under "Settlement" below) for one or more
Book-Entry Notes, the Company will issue
a single global security in fully
registered form without coupons (a
"Global Security") representing up to
$100,000,000 principal amount of all such
Notes that have the same Stated Maturity,
redemption provisions, repayment
provisions, Interest Payment Dates,
Interest Payment Period and, Original
Issue Date, Original Issue Discount
Provisions, in the case of Fixed Rate
Notes, interest rate, or in the case of
Floating Rate Notes, initial interest
rate, Base Rate, Index Maturity, Interest
Reset Period, Interest Reset Dates,
Spread or Spread Multiplier, minimum
interest rate (if any), and maximum
interest rate (if any) (collectively
"Terms"). Each Global Security will be
dated and issued as of the date of its
authentication by CB. Each Global
Security will bear an "Interest Accrual
Date", which will be (i) with respect to
an original Global Security (or any
portion thereof), its original issuance
date, and (ii) with respect to any Global
Security (or any portion thereof) issued
subsequently upon exchange of a Global
Security or in lieu of a destroyed, lost
or stolen Global Security, the most
recent Interest Payment Date to which
interest has been paid or duly provided
for on the predecessor Global Security or
Securities (or if no such payment or
provision has been made, the original
2
<PAGE>
issuance date of the predecessor Global
Security), regardless of the date of
authentication of such subsequently
issued Global Security. Book-Entry Notes
may only be denominated and payable in
U.S. dollars. No Global Security will
represent any Certificated Note.
Identification The Company has arranged with the CUSIP
Numbers: Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau")
for the reservation of one series of
CUSIP numbers (including tranche
numbers), which series consists of
approximately 900 CUSIP numbers and
relates to Global Securities representing
the Book-Entry Notes. CB and the Company
has obtained from the CUSIP Service
Bureau a written list of such series of
reserved CUSIP numbers and has delivered
to the Company and DTC such written list
of 900 CUSIP numbers of such series. The
Company will assign CUSIP numbers to
Global Securities as described below
under Settlement Procedure "B". DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers that
the Company has assigned to Global
Securities. At any time when fewer than
100 of the reserved CUSIP numbers of the
series remain unassigned to Global
Securities, and if it deems necessary,
the Company will reserve additional CUSIP
numbers for assignment to Global
Securities representing Book-Entry Notes.
Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list
of such additional CUSIP numbers to CB
and DTC.
Registration: Each Global Security will be registered
in the name of Cede & Co., as nominee for
DTC, on the Security Register maintained
under the Indenture. The beneficial
owner of a Book-Entry Note (or one or
more indirect participants in DTC
designated by such owner) will designate
one or more participants in DTC (with
respect to such Note, the "Participants")
to act as agent or agents for such owner
in connection with the book-entry system
3
<PAGE>
maintained by DTC, and DTC will record in
book-entry form, in accordance with
instructions provided by such
Participants, a credit balance with
respect to such beneficial owner in such
Note in the account of such Participants.
The ownership interest of such beneficial
owner in such Note will be recorded
through the records of such Participants
or through the separate records of such
Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accompanied by book entries made by DTC
and, in turn, by Participants (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferrers and transferees
of such Note.
Exchanges: CB may deliver to DTC and the CUSIP
Service Bureau at any time a written
notice of consolidation specifying (i)
the CUSIP numbers of two or more
Outstanding Global Securities that
represent Book-Entry Notes having the
same Terms and for which interest has
been paid to the same date, (ii) a date,
occurring at least thirty days after such
written notice is delivered and at least
thirty days before the next Interest
Payment Date for such Book-Entry Notes,
on which such Global Securities shall be
exchanged for a single replacement Global
Security and (iii) a new CUSIP number,
obtained from the Company, to be assigned
to such replacement Global Security.
Upon receipt of such a notice, DTC will
send to its participants (including CB) a
written reorganization notice to the
effect that such exchange will occur on
such date. Prior to the specified
exchange date, CB will deliver to the
CUSIP Service Bureau a written notice
setting forth such exchange date and the
new CUSIP number and stating that, as of
such exchange date, the CUSIP numbers of
the Global Securities to be exchanged
will no longer be valid. On the
specified exchange date, CB will exchange
such Global Securities for a single
4
<PAGE>
Global Security bearing the new CUSIP
number and a new Interest Accrual Date,
and the CUSIP numbers of the exchanged
Global Securities will, in accordance
with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned.
Notwithstanding the foregoing, if the
Global Securities to be exchanged exceed
$100,000,000 in aggregate principal
amount, one Global Security will be
authenticated and issued to represent
each $100,000,000 of principal amount of
the exchanged Global Security and an
additional Global Security will be
authenticated and issued to represent any
remaining principal amount of such Global
Securities (see "Denominations" below).
Maturities: Each Book-Entry Note will mature on a
date not less than nine months nor more
than 30 years after the settlement date
for such Note.
Notice of CB will notify DTC 60 days prior to each
Repayment Dates: Repayment Date (as defined in the Note),
if any, with respect to a Note of the
CUSIP number of such Note, the Repayment
Date, the Repayment Price and the
exercise period.
Denominations: Book-Entry Notes will be issued in
principal amounts of $100,000 or any
amount in excess thereof that is an
integral multiple of $1,000. Global
Securities will be denominated in
principal amounts not in excess of
$100,000,000. If one or more Book-Entry
Notes having an aggregate principal
amount in excess of $100,000,000 would,
but not for the preceding sentence, be
represented by a single Global Security,
then one Global Security will be issued
to represent each $100,000,000 principal
amount of such Book-Entry Note or Notes
and an additional Global Security will be
issued to represent any remaining
principal amount of such Book-Entry Note
or Notes. In such a case, each of the
Global Securities representing such Book-
Entry Note or Notes shall be assigned the
same CUSIP number.
5
<PAGE>
Interest: General. Interest on each Book-Entry
-------
Note will accrue from the Interest
Accrual Date of the Global Security
representing such Note. Each payment of
interest on a Book-Entry Note will
include interest accrued to but excluding
the Interest Payment Date (provided that
in the case of Floating Rate Notes which
reset daily or weekly interest payments
will include interest accrued to and
including the Regular Record Date
immediately preceding the Interest
Payment Date) or Maturity (other than a
Maturity of a Fixed Rate Book-Entry Note
occurring on the thirty-first day of a
month, in which case such payment will
include interest accruing to but
excluding only the thirtieth day of such
month). Interest payable at the Maturity
of a Book-Entry Note will be payable to
the Person to whom the principal of such
Note is payable. Standard & Poor's
Corporation will use the information
received in the pending deposit message
described under Settlement Procedure "C"
below in order to include the amount of
any interest payable and certain other
information regarding the related Global
Security in the appropriate weekly bond
report published by Standard & Poor's
Corporation.
Regular Record Dates. The Regular Record
--------------------
Date with respect to any Interest Payment
Date shall be the date fifteen calendar
days immediately preceding such Interest
Payment Date.
Fixed Rate Book-Entry Notes. Unless
---------------------------
otherwise specified pursuant to
Settlement Procedure "A" below, interest
payments on Fixed Rate Book-Entry Notes
will be made semiannually on June 1 and
December 1 of each year and at Maturity;
provided, however, that in the case of a
-------- -------
Fixed Rate Book-Entry Note issued between
a Regular Record Date and an Interest
Payment Date or on an Interest Payment
Date, the first interest payment will be
made on the Interest Payment Date
following the next succeeding Regular
Record Date.
6
<PAGE>
Floating Rate Book-Entry Notes. Interest
------------------------------
payments will be made on Floating Rate
Book-Entry Notes monthly, quarterly,
semi-annually or annually. Unless
otherwise agreed upon, interest will be
payable, in the case of Floating Rate
Book-Entry Notes with a monthly Interest
Payment Period, on the third Wednesday of
each month; with a quarterly Interest
Payment Period, on the third Wednesday of
March, June, September and December of
each year; with a semi-annual Interest
Payment Period on the third Wednesday of
the two months specified pursuant to
Settlement Procedure "A" below; and with
an annual Interest Payment Period, on the
third Wednesday of the month specified
pursuant to Settlement Procedure "A"
below; provided, however, that if an
-------- -------
Interest Payment Date for Floating Rate
Book-Entry Notes would otherwise be a day
that is not a Business Day with respect
to such Floating Rate Book-Entry Notes,
such Interest Payment Date will be the
next succeeding Business Day with respect
to such Floating Rate Book-Entry Notes,
except in the case of a LIBOR Note if
such Business Day is in the next
succeeding calendar month, in which event
such Interest Payment Date will be the
immediately preceding Business Day; and
provided, further, that in the case of a
-------- -------
Floating Rate Book-Entry Note issued
between a Regular Record Date and an
Interest Payment Date or on an Interest
Payment Date, the first interest payment
will be made on the Interest Payment Date
following the next succeeding Regular
Record Date.
Notice of Interest Payment and Regular
--------------------------------------
Record Dates. On the first Business Day
------------
of January, April, July and October of
each year, CB will deliver to the Company
and DTC a written list of Regular Record
Dates and Interest Payment Dates that
will occur with respect to Book-Entry
Notes during the six-month period
beginning on such first Business Day.
Promptly after each Interest
Determination Date for Floating Rate
Notes, CB as Calculation Agent will
7
<PAGE>
notify Standard & Poor's Corporation of
the interest rates determined on such
Interest Determination Date.
Calculation of Fixed Rate Book-Entry Notes. Interest on
Interest: ---------------------------
Fixed Rate Book-Entry Notes (including
interest for partial periods) will be
calculated on the basis of a year of
twelve thirty-day months. (Examples of
interest calculations are as follows:
The period from August 15, 1988, to
February 15, 1989, equals 6 months and O
days, or 180 days; the interest payable
equals 180/360 times the annual rate of
interest times the principal amount of
the Note. The period from September 17,
1988, to February 15, 1989, equals 4
months and 28 days, or 148 days; the
interest payable equals 148/360 times the
annual rate of interest times the
principal amount of the Note.)
Floating Rate Book-Entry Notes. Interest
------------------------------
rates on Floating Rate Book-Entry Notes
will be determined as set forth in the
form of Notes. Interest on Floating Rate
Book-Entry Notes will be calculated on
the basis of actual days elapsed and a
year of 360 days except that in the case
of Treasury Rate Notes, interest will be
calculated on the basis of the actual
number of days in the year.
Payments of Payment of Interest Only. Promptly after
Principal and ------------------------
Interest: each Regular Record Date, CB will deliver
to the Company and DTC a written notice
specifying by CUSIP number the amount of
interest to be paid on each Global
Security on the following Interest
Payment Date (other than an Interest
Payment Date coinciding with Maturity)
and the total of such amounts. DTC will
confirm the amount payable on each Global
Security on such Interest Payment Date by
reference to the daily bond reports
published by Standard & Poor's
Corporation. The Company will pay to CB,
as Paying Agent, the total amount of
interest due on such Interest Payment
Date (other than at Maturity), and CB
will pay such amount to DTC at the times
and in the manner set forth below under
8
<PAGE>
"Manner of Payment." If any Interest
Payment Date for a Book-Entry Note is not
a Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall accrue
on such payment for the period from and
after such Interest Payment Date.
Payments at Maturity. On or about the
--------------------
first Business Day of each month, CB will
deliver to the Company and DTC a written
list of principal and interest to be paid
on each Global Security maturing either
at Stated Maturity or on a Redemption or
Repayment Date in the following month.
The Company and DTC will confirm the
amounts of such principal and interest
payments with respect to each such Global
Security on or about the fifth Business
Day preceding the Maturity of such Global
Security. The Company will pay to CB, as
the paying agent, the principal amount of
such Global Security, together with
interest due at such Maturity. CB will
pay such amounts to DTC at the times and
in the manner set forth below under
"Manner of Payment." If any Maturity of
a Global Security representing Book-Entry
Notes is not a Business Day, the payment
due on such day shall be made on the next
succeeding Business Day and no interest
shall accrue on such payment for the
period from and after such Maturity.
Promptly after payment to DTC of the
principal and interest due at the
Maturity of such Global Security, CB will
cancel such Global Security in accordance
with the terms of the Indenture and
deliver it to the Company with a
certificate of cancellation.
Manner of Payment. The total amount of
-----------------
any principal and interest due on Global
Securities on any Interest Payment Date
or at Maturity shall be paid by the
Company to CB in funds available for use
by CB as of 9:30 A.M. (New York City
time) on such date. The Company will
make such payment on such Global
Securities by wire transfer to CB. The
Company will confirm such instructions in
writing to CB. Prior to 10 A.M. (New
9
<PAGE>
York City time) on each Maturity Date or
as soon as possible thereafter, CB will
pay by separate wire transfer (using
Fedwire message entry instructions in a
form previously specified by DTC) to an
account at the Federal Reserve Bank of
New York previously specified by DTC, in
funds available for immediate use by DTC,
each payment of interest or principal
(together with interest thereon) due on
Global Securities on any Maturity Date.
On each Interest Payment Date, interest
payment shall be made to DTC in same day
funds in accordance with existing
arrangements between CB and DTC.
Thereafter on each such date, DTC will
pay, in accordance with its SDFS
operating procedures then in effect, such
amounts in funds available for immediate
use to the respective Participants in
whose names the Book-Entry Notes
represented by such Global Securities are
recorded in the book-entry system
maintained by DTC. Neither the Company
(either as issuer or as Paying Agent) nor
CB shall have any direct responsibility
or liability for the payment by DTC to
such Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes. The amount of any
-----------------
taxes required under applicable law to be
withheld from any interest payment on a
Book-Entry Note will be determined and
withheld by the Participant, indirect
participant in DTC or other Person
responsible for forwarding payments and
materials directly to the beneficial
owner of such Note.
Procedure for Rate The Company and the Agent will discuss
Setting and from time to time the aggregate principal
Posting: amount of, the issuance price of, and the
interest rates to be borne by, Book-Entry
Notes that may be sold as a result of the
solicitation of orders by the Agent. If
the Company decides to set prices of, and
rates borne by, any Book-Entry Notes in
respect of which the Agent is to solicit
orders (the setting of such prices and
rates to be referred to herein as
"posting") or if the Company decides to
10
<PAGE>
change prices or rates previously posted
by it, it will promptly advise the Agent
of the prices and rates to be posted.
Acceptance and Rejection of Offers:
Unless otherwise instructed by the
Company, each Agent will advise the
Company promptly by telephone of all
offers to purchase Book-Entry Notes
received by such Agent. Unless otherwise
agreed by the Company and each of the
Agents, the Company has the sole right to
accept offers to purchase Book-Entry
Notes and may reject any such offer in
whole or in part.
Preparation of If any order to purchase a Book Entry
Pricing Note is accepted by or on behalf of the
Supplement: Company, the Company will prepare a
pricing supplement (a "Pricing
Supplement") reflecting the terms of such
Note and will arrange to file with the
Commission (via EDGAR) in accordance with
the applicable paragraph of Rule 424(b)
under the Act. The Agent will cause a
Pricing Supplement to be delivered to the
purchaser of the Note.
In each instance that a Pricing
Supplement is prepared, the Agent will
affix the Pricing Supplement to
Prospectuses prior to their use.
Outdated Pricing Supplements, and the
Prospectuses to which they are attached
(other than those retained for files),
will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-
Entry Note and the authentication and
issuance of the Global Security
representing such Note shall constitute
"settlement" with respect to such Note.
All orders accepted by the Company will
be settled on the fifth Business Day
pursuant to the timetable for settlement
set forth below unless the Company and
the purchaser agree to settlement on
another day which shall be no earlier
than the next Business Day.
11
<PAGE>
Settlement Settlement Procedures with regard to each
Procedures: Book-Entry Note sold by the Company
through an Agent, as agent, shall be as
follows:
A. Such Agent will advise the
Company by telephone of the
following settlement information:
1. Principal amount.
2. Stated Maturity.
3. In the case of a Fixed Rate Book-
Entry Note, the interest rate, or
in the case of Floating Rate
Book-Entry Note, the initial
interest rate (if known at such
time), Base Rate, Index Maturity,
Interest Reset Period, Interest
Reset Dates, Spread or Spread
Multiplier (if any), minimum
interest rate (if any) and
maximum interest rate (if any).
4. Interest Payment Period and
Interest Payment Dates.
5. Redemption provisions, if any.
6. Repayment provisions, if any.
7. Settlement date.
8. Price.
9. Agent's commission, determined as
provided in Section 2 of the
Agency Agreement between the
Company and such Agent.
10. Whether the Note is an Original
Issue Discount Note, and if it is
an Original Issue Discount Note,
the total amount of OID, the
yield to maturity and the initial
accrual period OID.
B. The Company will assign a CUSIP
number to the Global Security
representing such Note and then
advise CB by telephone or
12
<PAGE>
electronic transmission
(confirmed in writing at any time
on the same date) of the
information set forth in
Settlement Procedure "A" above,
such CUSIP number and the name of
such Agent. The Company will
also notify the Agent of such
CUSIP number by telephone as soon
as practicable. Each such
communication by the Company
shall constitute a representation
and warranty by the Company to CB
and each Agent that (i) such Note
is then, and at the time of
issuance and sale thereof will
be, duly authorized for issuance
and sale by the Company, (ii)
such Note, and the Global
Security representing such Note,
will conform with the terms of
the Indenture pursuant to which
such Note and Global Security are
issued and (iii) upon
authentication and delivery of
such Global Security, the
aggregate initial offering price
of all Notes and Euro Medium-Term
Notes, Series C issued under the
Indenture will not exceed $
or the equivalent thereof in one
or more currencies (except for
Securities represented by,
authenticated and delivered in
exchange for or in lieu of
Securities pursuant to Section
304, 305, 306, 906 or 1107 of the
Indenture).
C. CB will enter a pending deposit
message through DTC's Participant
Terminal System, providing the
following settlement information
to DTC, such Agent and Standard &
Poor's Corporation:
1. The information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate
Book-Entry Note or a Floating
Rate Book-Entry Note.
13
<PAGE>
3. Initial Interest Payment Date for
such Note, number of days by
which such date succeeds the
related Record Date (which, in
the case of Floating Rate Notes
which re-set daily or weekly,
shall be the date five calendar
days immediately preceding the
applicable Interest Payment Date
and in the case of all other
Notes shall be the Regular Record
Date as defined in the Note) and
amount of interest payable on
such Interest Payment Date.
4. The Interest Payment Period.
5. CUSIP number of the Global
Security representing such Note.
6. Whether such Global Security will
represent any other Book-Entry
Note (to the extent known at such
time).
D. The Company will deliver to CB
the Global Security representing
such Note.
E. CB will complete such Note and
authenticate the Global Security
representing such Note.
F. DTC will credit such Note to CB's
participant account at DTC.
G. CB will enter an SDFS deliver
order through DTC's Participant
Terminal System instructing DTC
to (i) debit such Note to CB's
participant account and credit
such Note to such Agent's
participant account and (ii)
debit such Agent's settlement
account and credit CB's
settlement account for an amount
equal to the price of such Note
less such Agent's commission.
The entry of such a deliver order
shall constitute a representation
and warranty by CB to DTC that
(a) the Global Security
14
<PAGE>
representing such Book-Entry Note
has been issued and authenticated
and (b) CB is holding such Global
Security pursuant to the Medium-
Term Note Certificate Agreement
between CB and DTC.
H. Such Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Note to such Agent's participant
account and credit such Note to
the participant accounts of the
Participants with respect to such
Note and (ii) to debit the
settlement accounts of such
Participants and credit the
settlement account of such Agent
for an amount equal to the price
of such Note.
I. Transfers of funds in accordance
with SDFS deliver orders
described in Settlement
Procedures "G" and "H" will be
settled in accordance with SDFS
operating procedures in effect on
the settlement date.
J. CB will wire transfer to the
account of the Company maintained
at Chemical Bank, New York, New
York, in funds available for
immediate use in the amount
transferred to CB in accordance
with Settlement Procedure "G".
K. Monthly, CB will send to the
Company a statement setting forth
the principal amount of Notes
Outstanding as of that date under
the Indenture and setting forth a
brief description of any sales of
which the Company has advised CB
but which have not yet been
settled.
L. Such Agent will confirm the
purchase of such Note to the
purchaser either by transmitting
to the Participants with respect
15
<PAGE>
to such Note a confirmation order
or orders through DTC's institu-
tional delivery system or by
mailing a written confirmation to
such purchaser.
Settlement For orders of Book-entry Notes solicited
Procedures by an Agent, as agent, and accepted by
Timetable: the Company for settlement on the first
Business Day after the sale date,
Settlement Procedures "A" through "K" set
forth above shall be completed as soon as
possible but not later than the
respective times (New York City time) set
forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on day before
settlement date
E 9:00 A.M. on settlement
date
F 10:00 A.M. on settlement
date
G-H 2:00 P.M. on settlement
date
I 4:45 P.M. on settlement
date
J-L 5:00 P.M. on settlement
date
</TABLE>
If a sale is to be settled more than one
Business Day after the sale date,
Settlement Procedures "A", "B" and "C"
shall be completed as soon as practicable
but no later than 11:00 A.M., 12 Noon and
2:00 P.M., as the case may be, on the
first Business Day after the sale date.
If the initial interest rate for a
Floating Rate Book-Entry Note has not
been determined at the time that
Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall
be completed as soon as such rate has
been determined but no later than 12 Noon
and 2:00 P.M., respectively, on the
second Business Day before the settlement
date. Settlement Procedure "I" is
16
<PAGE>
subject to extension in accordance with
any extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the settlement
date.
If settlement of a Book-Entry Note is
rescheduled or cancelled, CB will deliver
to DTC, through DTC's Participation
Terminal System, a cancellation message
to such effect by no later than 2:00 P.M.
on the Business Day immediately preceding
the scheduled settlement date.
Failure to Settle: If CB fails to enter an SDFS deliver
order with respect to a Book-Entry Note
pursuant to Settlement Procedure "G", CB
may deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable a withdrawal message
instructing DTC to debit such Note to
CB's participant withdrawal message,
provided that CB's participant account
contains a principal amount of the Global
Security representing such Note that is
at least equal to the principal amount to
be debited. If a withdrawal message is
processed with respect to all the Book-
Entry Notes represented by a Global
Security, CB will mark such Global
Security "cancelled" make appropriate
entries in CB's records and send such
cancelled Global Security to the Company.
CUSIP number assigned to such Global
Security shall, in accordance with CUSIP
Service Bureau procedures, be cancelled
and not immediately reassigned. If a
withdrawal message is processed with
respect to one or more, but not all, of
the Book-Entry Notes represented by a
Global Security, CB will exchange such
Global Security for two Global
Securities, one of which shall represent
such Book-Entry Note or Notes and shall
be cancelled immediately after issuance
and the other of which shall represent
the remaining Book-Entry Notes previously
represented by the surrendered Global
Security and shall bear the CUSIP number
of the surrendered Global Security.
17
<PAGE>
If the purchase price for any Book-Entry
Note is not timely paid to the
Participants with respect to such Note by
the beneficial purchaser thereof (or a
Person, including an indirect participant
in DTC, acting on behalf of such
purchaser), such Participants and, in
turn, the Agent for such Note may enter
SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement
Procedures "H" and "G", respectively.
Thereafter, CB will deliver the
withdrawal message and take the related
actions described in the preceding
paragraph.
Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-
Entry Note, DTC may take any actions in
accordance with its SDFS operating
procedures then in effect. In the event
of a failure to settle with respect to
one or more, but not all, of the Book-
Entry Notes to have been represented by a
Global Security, CB will provide, in
accordance with Settlement Procedures "D"
and "E", for the authentication and
issuance of a Global Security
representing the other Book-Entry Notes
to have been represented by such Global
Security and will make appropriate
entries in its records.
Procedures For When the Company has determined to change
Rate Changes: the interest rates of Notes being
offered, it will promptly advise the
Agents and the Agents will forthwith
suspend solicitation of offers. The
Agents will telephone the Company with
recommendations as to the changed
interest rates. At such time as the
Company has advised the Agents of the new
interest rates, the Agents may resume
solicitation of offers. Until such time
only "indications of interest" may be
recorded. Within two Business Days after
any sale of Notes, the Company will file
with the Securities and Exchange
Commission a pricing supplement to the
prospectus and prospectus supplement
relating to such Notes that reflects the
18
<PAGE>
applicable interest rates and other terms
and will deliver copies of such pricing
supplement to the Agents.
Suspension of Subject to the Company's representations,
Solicitation; warranties and covenants contained in the
Amendment or Agency Agreement, the Company may
Supplement: instruct each Agent to suspend
solicitation of purchases of Book-Entry
Notes at any time. Upon receipt of such
instructions, each Agent will forthwith
suspend such solicitations until such
time as it has been advised by the
Company that such solicitations may be
resumed. If the Company decides to amend
or supplement the registration statements
filed by the Company with the Securities
and Exchange Commission with respect to
the Notes or the prospectus and
prospectus supplement relating to the
Notes, it will promptly advise each Agent
and will furnish it with the proposed
amendment or supplement, all consistent
with the Company's obligations under the
Agency Agreement. The Company will,
consistent with such obligations,
promptly advise each Agent and CB whether
orders outstanding at the time each Agent
suspends solicitation may be settled and
whether copies of such prospectus and
prospectus supplement as in effect at the
time of the suspension, together with the
appropriate pricing supplement, may be
delivered in connection with the
settlement of such orders. The Company
will have the sole responsibility for
such decision and for any arrangements
that may be made in the event that the
Company determines that such orders may
not be settled or that copies of such
prospectus, prospectus supplement and
pricing supplement may not be so
delivered.
Delivery of A copy of the prospectus and prospectus
Prospectus: supplement relating to the Notes and a
pricing supplement relating to a Book-
Entry Note must accompany or precede the
earliest of any written offer of such
Note, confirmation of the purchase of
such Note or payment for such Note by its
purchaser. If notice of a change in the
19
<PAGE>
terms of the Book-Entry Notes is received
by an Agent between the time an order for
a Book-Entry Note is placed and the time
written confirmation thereof is sent by
such Agent to a customer or his agent,
such confirmation shall be accompanied by
a prospectus, prospectus supplement and
pricing supplement setting forth the
terms in effect when the order was
placed. Subject to the preceding
paragraph, each Agent will deliver a
prospectus, prospectus supplement and
pricing supplement as herein described
with respect to each Book-Entry Note sold
by it.
20
<PAGE>
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
CB will serve as registrar in connection with the
Certificated Notes.
Issuance: Each Certificated Note will be dated and
issued as of the date of its
authentication by CB. Each Certificated
Note will bear an Original Issue Date,
which will be (i) with respect to an
original Certificated Note (or any
portion thereof), its original issuance
date (which will be the settlement date)
and (ii) with respect to any Certificated
Note (or portion thereof) issued
subsequently upon transfer or exchange of
a Certificated Note or in lieu of a
destroyed, lost or stolen Certificated
Note, the Original Issue Date of the
predecessor Certificated Note, regardless
of the date of authentication of such
subsequently issued Certificated Note.
Registration: Certificated Notes will be issued only in
fully registered form without coupons.
Transfers and A Certificated Note may be presented for
Exchanges: transfer or exchange at the corporate
trust office of CB. Certificated Notes
will be exchangeable for other
Certificated Notes having identical terms
but different denominations without
service charge. Certificated Notes will
not be exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a
date not less than nine months or more
than 30 years from the settlement date
for such note.
Denominations: Certificated Notes denominated in U.S.
dollars will be issued in denominations
of $100,000 or any amount in excess
thereof that is an integral multiple of
$1,000. The authorized denominations of
Notes denominated in other than U.S.
dollars will be specified pursuant to
Settlement Procedures, below.
Interest: General. Interest on each Certificated
-------
Note will accrue from the Original Issue
Date of such Note for the first interest
21
<PAGE>
period and from the most recent interest
Payment Date to which interest has been
paid for all subsequent interest periods.
Each payment of interest on a
Certificated Note will include interest
accrued to but excluding the Interest
Payment Date or Maturity (other than a
Maturity of a Fixed Rate Certificated
Note occurring on the thirty-first day of
a month, in which case such payment will
include interest accruing to but
excluding the thirtieth day of such
month).
Fixed Rate Certificated Notes. Unless
-----------------------------
otherwise specified pursuant to
Settlement Procedure "A" below, interest
payments on Fixed Rate Certificated Notes
will be made semiannually on June 1 and
December 1 of each year and at Maturity;
provided, however, that in the case of
-------- -------
Fixed Rate Certificated Notes issued
between a Regular Record Date and an
Interest Payment Date or on an Interest
Payment Date, the first interest payment
will be made on the Interest Payment Date
following the next succeeding Regular
Record Date.
Floating Rate Certificated Notes.
--------------------------------
Interest payments will be made on
Floating Rate Certificated Notes monthly,
quarterly, semi-annually or annually.
Interest will be payable, in the case of
Floating Rate Certificated Notes with a
monthly Interest Payment Period, on the
third Wednesday of each month; with a
quarterly interest Payment Period, on the
third Wednesday of March, June, September
and December of each year; with a semi-
annual Interest Payment Period, on the
third Wednesday of the two months
specified pursuant to Settlement
Procedure "A" below; and with an annual
Interest Payment Period, on the third
Wednesday of the month specified pursuant
to Settlement Procedure "A" below;
provided, however, that if an Interest
-------- -------
Payment Date for Floating Rate
Certificated Notes would otherwise be a
day that is not a Business Day with
respect to such Floating Rate
22
<PAGE>
Certificated Notes, such Interest Payment
Date will be the next succeeding Business
Day with respect to such Floating Rate
Certificated Notes, except in the case of
a LIBOR Note if such Business Day is in
the next succeeding calendar month, in
which event such Interest Payment Date
will be the immediately preceding
Business Day; and provided, further, that
-------- -------
in the case of a Floating Rate
Certificated Note issued between a
Regular Record Date and an interest
Payment Date or on an Interest Payment
Date, the first interest payment will be
made on the Interest Payment Date
following the next succeeding Regular
Record Date.
Calculation of Fixed Rate Certificated Notes. Interest
Interest: -----------------------------
on Fixed Rate Certificated Notes
(including interest for partial periods)
will be calculated on the basis of a year
of twelve thirty-day months. (Examples
of interest calculations are as follows:
August 15, 1988 to February 15, 1989,
equals 6 months and 0 days or 180 days;
the interest payable equals 180/360 times
the annual rate of interest times the
principal amount of the Note. The period
from September 17, 1988 to February 15,
1989 equals 4 months and 28 days, or 148
days; the interest payable equals 148/360
times the annual rate of interest times
principal amount of the Note.)
Floating Rate Certificated Notes.
--------------------------------
Interest rates on Floating Rate
Certificated Notes will be determined as
set forth in the form of Notes. The
Company and CB will confirm the amount of
the initial interest payment due on any
Floating Rate Certificated Note for which
the initial Interest Period is shorter or
longer than the Index Maturity. Interest
on Floating Rate Certificated Notes will
be calculated on the basis of actual days
elapsed and a year of 360 days except
that in the case of Treasury Rate Notes,
interest will be calculated on the basis
of the actual number of days in the year.
23
<PAGE>
Payments of CB will pay the principal amount of each
Principal and Certificated Note at Maturity upon
Interest: presentation of such Note to CB. Such
payment, together with payment of
interest due at Maturity of such Note,
will be made in funds available for
immediate use by CB and in turn by the
Holder of such Note. Certificated Notes
presented to CB at Maturity for payment
will be cancelled by CB and delivered to
the Company with a certificate of
custodian. All interest payments on a
Certificated Note (other than interest
due at Maturity) will be made by check
drawn on CB (or another Person appointed
by CB) and mailed by CB to the Person
entitled thereto as provided in such Note
and the Indenture; provided, however,
-------- -------
that the holder of $10,000,000 (or the
equivalent thereof in other currencies)
or more of Notes with similar tenor and
terms will be entitled to receive payment
by wire transfer in U.S. dollars.
Following each Regular Record Date and
Special Record Date, CB will furnish the
Company with a list of interest payments
to be made on the following Interest
Payment Date for each Certificated Note
and in total for all Certificated Notes.
Interest at Maturity will be payable to
the Person to whom the payment of
principal is payable. CB will provide
monthly to the Company lists of principal
and interest, to the extent
ascertainable, to be paid on Certificated
Notes maturing in the next month. CB
will be responsible for withholding taxes
on interest paid on Certificated Notes as
required by applicable law.
If any Interest Payment Date for or the
Maturity of a Certificated Note is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall accrue
on such payment for the period from and
after such Interest Payment Date or
Maturity, as the case may be.
Procedure for Rate The Company and the Agent will discuss
Setting and from time to time the aggregate principal
Posting: amount of, the issuance price of, and the
24
<PAGE>
interest rates to be borne by,
Certificated Notes that may be sold as a
result of the solicitation of orders by
the Agent. If the Company decides to set
prices of, and rates borne by, any
Certificated Notes in respect of which
the Agent is to solicit orders (the
setting of such prices and rates to be
referred to herein as "posting") or if
the Company decides to change prices or
rates previously posted by it, it will
promptly advise the Agent of the prices
and rates to be posted.
Acceptance and Unless otherwise instructed by the
Rejection of Company, each Agent will advise the
Offers: Company promptly by telephone of all
offers to purchase Certificated Notes
received by such Agent, other than those
rejected by it in whole or in part in the
reasonable exercise of its discretion.
Unless otherwise agreed by the Company
and each of the Agents, the Company has
the sole right to accept offers to
purchase Notes and may reject any such
offer in whole or in part.
Preparation of If any order to purchase a Registered
Pricing Note is accepted by or on behalf of the
Supplement: Company, the Company will prepare a
pricing supplement (a "Pricing
Supplement") reflecting the terms of such
Note and will arrange to file with the
Commission (via EDGAR) in accordance with
the applicable paragraph of Rule 424(b)
under the Act. The Agent will cause a
Pricing Supplement to be delivered to the
purchaser of the Note.
In each instance that a Pricing
Supplement is prepared, the Agent will
affix the Pricing Supplement to
Prospectuses prior to their use.
Outdated Pricing Supplements, and the
Prospectuses to which they are attached
(other than those retained for files),
will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in exchange for an
authenticated Certificated Note delivered
to the selling Agent and such Agent's
25
<PAGE>
delivery of such Note against receipt of
immediately available funds shall, with
respect to such Note, constitute
"settlement". All orders accepted by the
Company will be settled on the next
Business Day pursuant to the timetable
for settlement set forth below, unless
the Company and the purchaser agree to
settlement on a later date; provided,
--------
however, that in the case of a delayed
-------
settlement the Company will notify CB at
least twenty-four hours prior to the time
of settlement.
Settlement Settlement Procedures with regard to
Procedures: each Certificated Note sold by the
Company through an Agent, as agent, shall
be as follows:
A. Such Agent will advise the
Company by telephone of the
following settlement information:
1. Name in which such Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner
and address for payment of
principal and interest.
3. Taxpayer identification number of
the Registered Owner (if
available).
4. Principal amount.
5. Stated Maturity.
6. In the case of Fixed Rate
Certificated Note, the interest
rate or, in the case of a
Floating Rate Certificated Note,
the initial interest rate (if
known at such time), Base Rate,
Index Maturity, Interest Reset
Period, Interest Reset Dates,
Spread or Spread Multiplier (if
any), minimum interest rate (if
any) and maximum interest rate
(if any).
26
<PAGE>
7. Interest Payment Period and
Interest Payment Dates.
8. Specified Currency and whether
the option to elect payment in a
Specified Currency applies and if
the Specified Currency is not
U.S. dollars, the authorized
denominations.
9. Redemption provisions, if any.
10. Repayment provisions, if any.
11. Settlement date.
12. Price (including currency).
13. Agent's commission, determined as
provided in Section 2 of the
Agency Agreement between the
Company and such Agent.
14. Whether the Note is an Original
Issue Discount Note, and if it is
an Original Issue Discount Note,
the total amount of OID, the
yield to maturity and the initial
accrual period OID.
B. The Company will advise CB by
telephone or electronic
transmission (confirmed in
writing at any time on the sale
date) of the information set
forth in Settlement Procedure "A"
above and the name of such Agent.
Each such communication by the
Company shall constitute a
representation and warranty by
the Company to CB and each Agent
that (i) such Note is then, and
at the time of issuance and sale
thereof will be, duly authorized
for issuance and sale by the
Company, (ii) such Note will
conform with the terms of the
Indenture and (iii) upon
authentication and delivery of
such Note, the aggregate initial
offering price of all Notes and
Euro Medium-Term Notes, Series C
27
<PAGE>
issued under the Indenture will
not exceed $ or
----------------
the equivalent thereof in other
currencies (except for securities
represented by securities
authenticated and delivered in
exchange for or in lieu of
securities pursuant to Section
304, 305, 306, 906 or 1107 of any
Indenture).
C. The Company will deliver to CB a
pre-printed four-ply packet for
such Note, which packet will
contain the following documents
in forms that have been approved
by the Company, the Agents and
the Trustee:
1. Note with customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
D. CB will complete such Note and
authenticate such Note and
deliver it (with the confirma-
tion) and Stubs One and Two to
such Agent, and such Agent will
acknowledge receipt of the Note
by stamping or otherwise marking
Stub One and returning it to CB.
Such delivery will be made only
against such acknowledgment of
receipt and evidence that
instructions have been given by
such Agent for payment to the
account of the Company at
Chemical Bank, New York, New
York, in funds available for
immediate use, of an amount equal
to the price of such Note less
such Agent's commission. In the
event that the instructions given
by such Agent for payment to the
account of the Company are
revoked, the Company will as
promptly as possible wire
transfer to the account of such
28
<PAGE>
Agent an amount of immediately
available funds equal to the
amount of such payment made.
E. Such Agent will deliver such Note
(with confirmation) to the
customer against payment in
immediately payable funds. Such
Agent will obtain the acknowledg-
ment of receipt of such Note by
retaining Stub Two.
F. CB will send Stub Three to the
Company by first-class mail.
Periodically, CB will also send
to the Company a statement
setting forth the principal
amount of the Notes Outstanding
as of that date under the
Indenture and setting forth a
brief description of any sales of
which the Company has advised CB
but which have not yet been
settled.
Settlement For offers of Certificated Notes
Procedures solicited by an Agent, as agent, and
Timetable: accepted by the Company, Settlement
Procedures "A" through "C" set forth
above shall be completed on or before the
respective times (New York City time) set
forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
---------- ----
<S> <C>
A 2:00 P.M. on day before
settlement date
B 3:00 P.M. on day before
settlement date
C-D 2:15 P.M. on settlement
date
E 3:00 P.M. on settlement
date
F 5:00 P.M. on settlement
date
</TABLE>
Failure to Settle: If a purchaser fails to accept delivery
of and make payment for any Certificated
Note, the selling Agent will notify the
Company and CB by telephone and return
such Note to CB. Upon receipt of such
29
<PAGE>
notice, the Company will immediately wire
transfer to the account of the Agent an
amount equal to the amount previously
credited thereto in respect of such Note.
Such wire transfer will be made on the
settlement date, if possible, and in any
event not later than the day following
the settlement date. If the failure
shall have occurred for any reason other
than a default by such Agent in the
performance of its obligations hereunder
and under the Agency Agreement with the
Company, then the Company will reimburse
such Agent or CB, as appropriate, on an
equitable basis for its loss of the use
of the funds during the period when they
were credited to the account of the
Company. Immediately upon receipt of the
Certificated Note in respect of which
such failure occurred, CB will mark such
Note "cancelled," make appropriate
entries in CB's records and send such
Note to the Company.
Procedure for Rate When the Company has determined to change
Changes: the interest rates of Notes being
offered, it will promptly advise the
Agents and the Agents will forthwith
suspend solicitation of offers. The
Agents will telephone the Company with
recommendations as to the changed
interest rates. At such time as the
Company has advised the Agents of the new
interest rates, the Agents may resume
solicitation of offers. Until such time
only "indications of interest" may be
recorded. Within two business days after
any sale of Notes, the Company will file
with the Securities and Exchange
Commission a pricing supplement to the
prospectus and prospectus supplement
relating to such Notes that reflects the
applicable interest rates and other terms
and will deliver copies of such pricing
supplement to the Agents.
Suspension of Subject to the Company's representations,
Solicitation; warranties and covenants contained in the
Amendments or Agency Agreement, the Company may
Supplement: instruct each Agent to suspend
solicitation of purchases of Certificated
Notes at any time. Upon receipt of such
30
<PAGE>
instructions, each Agent will forthwith
suspend such solicitations until such
time as it has been advised by the
Company that such solicitations may be
resumed. If the Company decides to amend
or supplement the registration statements
filed by the Company with the Securities
and Exchange Commission with respect to
the Notes or the prospectus and
prospectus supplement relating to the
Notes, it will promptly advise each Agent
and will furnish it with the proposed
amendment or supplement, all consistent
with the Company's obligations under the
Agency Agreement. The Company will,
consistent with such obligations,
promptly advise each Agent and CB whether
orders outstanding at the time each Agent
suspends solicitation may be settled and
whether copies of such prospectus and
prospectus supplement as in effect at the
time of the suspension, together with the
appropriate pricing supplement, may be
delivered in connection with the
settlement of such orders. The Company
will have the sole responsibility for
such decision and for any arrangements
that may be made in the event that the
Company determines that such orders may
not be settled or that copies of such
prospectus, prospectus supplement and
pricing supplement may not be so
delivered.
Delivery of A copy of the prospectus and prospectus
Prospectus: supplement relating to the Notes and a
pricing supplement relating to a
Certificated Note must accompany or
precede the earlier of any written offer
of such Note, delivery of such Note,
confirmation of the purchase of such Note
and payment for such Note by its
purchaser. If notice of a change in the
terms of the Certificated Notes is
received by an Agent between the time an
order for a Certificated Note is placed
and the time written confirmation thereof
is sent by such Agent to a customer or
his agent, such confirmation shall be
accompanied by a prospectus, prospectus
supplement and pricing supplement setting
forth the terms in effect when the order
31
<PAGE>
was placed. Subject to the preceding
paragraph, each Agent will deliver a
prospectus, prospectus supplement and
pricing supplement as herein described
with respect to each Note sold by it.
32
<PAGE>
EXHIBIT B
Philip Morris Companies Inc.
Medium Term Notes, Series C
Due from 9 Months to Thirty Years from Date of Issue
TERMS AGREEMENT
, 1992
Attention:
Subject in all respects to the terms and
conditions of the Selling Agency Agreement (the "Agreement")
dated December , 1992, among Salomon Brothers Inc, Merrill
--
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Shearson Lehman Brothers Inc., and you, the undersigned agrees to
purchase the following Notes of Philip Morris Companies Inc.:
Aggregate Principal Amount:
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Purchase Price: % of Principal Amount [plus
accrued interest from 199 ]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in the
requirements to deliver the
documents specified in Section
6(b) of the Agreement:
Other Terms:
Period during which additional
<PAGE>
Notes may not be sold pursuant
to Section 4(1) of the Agreement:
[Purchaser]
By:
-------------------
Accepted:
By:
--------------------
Title:
2
<PAGE>
Additional Information Applicable to
Offers to Purchase Original Issue Discount Notes
------------------------------------------------
Total amount of OID:
Yield to Maturity:
Initial Accrual Period OID:
<PAGE>
EXHIBIT C
AGENCY AGREEMENT
----------------
Dated:
--------------------
Philip Morris Companies Inc.
120 Park Avenue
New York, New York 10016
Attention: George R. Lewis,
Vice President and Treasurer
Re: Philip Morris Companies Inc.
Medium-Term Notes, Series C
Dear Mr. Lewis
We hereby agree to act as an Agent pursuant to the Selling Agency
Agreement, dated as of December , 1992 (the "Selling Agency
--
Agreement"), among Philip Morris Companies Inc., Salomon Brothers
Inc, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Shearson Lehman Brothers Inc., all of the terms
and conditions of which (except as provided below) are
incorporated herein by reference.
Our agreement hereunder is subject to the conditions set forth in
the Selling Agency Agreement other than the conditions set forth
in paragraphs (i), (j) and (k) of Section 4 thereof and
paragraphs (b), (c), (d), (e), (f), and (g) of Section 5 thereof.
Notices and other communications to us hereunder should be
directed to Attention:
----------------------------------------
Medium-Term Note Department.
This agreement shall terminate days after the date hereof.
-----
If the foregoing correctly sets forth our agreement, please
indicate your acceptance in the space provided for that purpose
below.
Very truly yours,
By:
-----------------
Title:
Accepted and agreed to as of the date set forth above.
PHILIP MORRIS COMPANIES INC.
By:
----------------------
<PAGE>
Exhibit 4(a)
================================================================================
PHILIP MORRIS COMPANIES INC.,
and
THE CHASE MANHATTAN BANK,
Trustee
-----------------
INDENTURE
Dated as of December 2, 1996
-----------------
Debt Securities
================================================================================
<PAGE>
PHILIP MORRIS COMPANIES INC.
Reconciliation and tie showing the location in the Indenture dated as of
December 2, 1996 of the provisions inserted pursuant to Sections 310 to 318(a),
inclusive, of the Trust Indenture Act of 1939.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C>
Section 310 (a)(1)...........................................................609
(a)(2)...........................................................609
(a)(3)................................................Not Applicable
(a)(4)................................................Not Applicable
(b)..............................................................608
...........................................................610(d)
(c)...................................................Not Applicable
Section 311 (a)................................................613(a) and 613(c)
(b)................................................613(b) and 613(c)
(c)...................................................Not Applicable
Section 312 (a)..............................................................701
...........................................................702(a)
(b)...........................................................702(b)
(c)...........................................................702(c)
Section 313 (a)...........................................................703(a)
(b)...........................................................703(b)
(c)................................................703(a) and 703(b)
(d)...........................................................703(d)
Section 314 (a)..............................................................704
(b)...................................................Not Applicable
(c)..............................................................102
(c)(1)...........................................................102
(c)(2)...........................................................102
(c)(3)................................................Not Applicable
(d)...................................................Not Applicable
(e)..............................................................102
Section 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
Section 316 (a)(1)(A)................................................502 and 512
(a)(1)(B)........................................................513
(a)(2)................................................Not Applicable
(b)..............................................................508
Section 317 (a)(1)...........................................................503
(a)(2)...........................................................504
(b).............................................................1003
Section 318 (a)..............................................................107
</TABLE>
- ----------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
PARTIES....................................................................... 1
RECITALS...................................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.................................................... 1
Act......................................................................... 2
Affiliate................................................................... 2
Authenticating Agent........................................................ 2
Authorized Newspapers....................................................... 2
Bearer Security............................................................. 2
Board of Directors.......................................................... 2
Board Resolution............................................................ 2
Business Day................................................................ 2
CEDEL, S.A. ................................................................ 2
Certificate of a Firm of Independent Public Accountants..................... 2
Code........................................................................ 3
Commission.................................................................. 3
Company..................................................................... 3
Company Request; Company Order.............................................. 3
Component Currency.......................................................... 3
Consolidated Net Tangible Assets............................................ 3
Conversion Date............................................................. 3
Conversion Event............................................................ 3
Corporate Trust Office...................................................... 3
corporation................................................................. 3
coupon...................................................................... 3
Currency Determination Agent................................................ 3
Defaulted Interest.......................................................... 3
Depositary.................................................................. 4
Discounted Security......................................................... 4
Dollar Equivalent of the Currency Unit...................................... 4
Dollar Equivalent of the Foreign Currency................................... 4
Dollars..................................................................... 4
ECU......................................................................... 4
Election Date............................................................... 4
Euro-clear.................................................................. 4
European Communities........................................................ 4
European Monetary System.................................................... 4
Event of Default............................................................ 4
Exchange Date............................................................... 4
Exchange Rate Officers' Certificate......................................... 4
Foreign Currency............................................................ 4
Global Exchange Agent....................................................... 4
Government Obligations...................................................... 4
Holder...................................................................... 5
<PAGE>
ii
Indenture................................................................... 5
interest.................................................................... 5
Interest Payment Date....................................................... 5
Market Exchange Rate........................................................ 5
Maturity.................................................................... 6
Officers' Certificate....................................................... 6
Opinion of Counsel.......................................................... 6
Outstanding................................................................. 6
Paying Agent................................................................ 7
Person...................................................................... 7
Place of Payment............................................................ 7
Predecessor Security........................................................ 7
Redemption Date............................................................. 7
Redemption Price............................................................ 7
Registered Security......................................................... 7
Regular Record Date......................................................... 7
Responsible Officer......................................................... 7
Securities.................................................................. 7
Security Register; Security Registrar....................................... 7
series...................................................................... 7
Special Record Date......................................................... 7
Specified Amount............................................................ 8
Stated Maturity............................................................. 8
Stock Exchange.............................................................. 8
Subsidiary.................................................................. 8
Trustee..................................................................... 8
Trust Indenture Act......................................................... 8
United States............................................................... 8
United States Alien......................................................... 8
Valuation Date.............................................................. 8
Yield to Maturity........................................................... 8
SECTION 102. Compliance Certificates and Opinions........................... 8
SECTION 103. Form of Documents Delivered to Trustee......................... 9
SECTION 104. Acts of Holders................................................ 9
SECTION 105. Notices, Etc., to Trustee and Company......................... 10
SECTION 106. Notice to Holders; Waiver..................................... 11
SECTION 107. Conflict with Trust Indenture Act............................. 11
SECTION 108. Effect of Headings and Table of Contents...................... 11
SECTION 109. Successors and Assigns........................................ 12
SECTION 110. Separability Clause........................................... 12
SECTION 111. Benefits of Indenture......................................... 12
SECTION 112. Governing Law................................................. 12
SECTION 113. Non-Business Day.............................................. 12
SECTION 114. Immunity of Incorporators, Stockholders,
Officers and Directors........................................ 12
SECTION 115. Certain Matters Relating to Currencies........................ 13
SECTION 116. Language of Notices, Etc...................................... 13
<PAGE>
iii
ARTICLE TWO
Security Forms
SECTION 201. Forms of Securities........................................... 13
SECTION 202. Form of Trustee's Certificate of Authentication............... 14
SECTION 203. Securities in Global Form..................................... 14
ARTICLE THREE
The Securities
SECTION 301. Title; Payment and Terms...................................... 15
SECTION 302. Denominations and Currencies.................................. 17
SECTION 303. Execution, Authentication, Delivery and Dating................ 17
SECTION 304. Temporary Securities and Exchange of Securities............... 18
SECTION 305. Registration, Registration of Transfer and
Exchange...................................................... 21
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities and Coupons........................................ 24
SECTION 307. Payment of Interest; Interest Rights Preserved................ 24
SECTION 308. Persons Deemed Owners......................................... 26
SECTION 309. Cancellation.................................................. 26
SECTION 310. Computation of Interest....................................... 27
SECTION 311. Currency and Manner of payments in Respect of
Securities.................................................... 27
SECTION 312. Appointment and Resignation of Successor
Currency Determination Agent.................................. 29
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Securities of any Series........ 30
SECTION 402. Application of Trust Money.................................... 32
SECTION 403. Satisfaction and Discharge of Indenture....................... 32
SECTION 404. Reinstatement................................................. 33
ARTICLE FIVE
Remedies
SECTION 501. Events of Default............................................. 33
SECTION 502. Acceleration of Maturity; Rescission and
Annulment..................................................... 34
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee........................................ 35
SECTION 504. Trustee May File Proofs of Claim.............................. 36
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons...................................... 36
SECTION 506. Application of Money Collected................................ 37
SECTION 507. Limitation on Suits........................................... 37
SECTION 508. Unconditional Right of Holders to Receive Principal
(and Premium, if any) and Interest, if any.................... 37
SECTION 509. Restoration of Rights and Remedies............................ 38
SECTION 510. Rights and Remedies Cumulative................................ 38
SECTION 511. Delay or Omission Not Waiver.................................. 38
<PAGE>
iv
SECTION 512. Control by Holders............................................ 38
SECTION 513. Waiver of Past Defaults....................................... 39
SECTION 514. Undertaking for Costs......................................... 39
SECTION 515. Waiver of Stay or Extension Laws.............................. 39
SECTION 516. Judgment Currency............................................. 39
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities........................... 40
SECTION 602. Notice of Defaults............................................ 41
SECTION 603. Certain Rights of Trustee..................................... 41
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.................................................... 42
SECTION 605. May Hold Securities........................................... 42
SECTION 606. Money Held in Trust........................................... 42
SECTION 607. Compensation and Reimbursement................................ 43
SECTION 608. Disqualification; Conflicting Interests....................... 43
SECTION 609. Corporate Trustee Required; Different Trustees
for Different Series; Eligibility............................. 43
SECTION 610. Resignation and Removal; Appointment of
Successor..................................................... 44
SECTION 611. Acceptance of Appointment by Successor........................ 45
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business........................................ 46
SECTION 613. Preferential Collection of Claims Against
Company....................................................... 46
SECTION 614. Authenticating Agents......................................... 49
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders..... 50
SECTION 702. Preservation of Information; Communications to Holders........ 50
SECTION 703. Reports by Trustee............................................ 51
SECTION 704. Reports by Company............................................ 53
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.......... 53
SECTION 802. Successor Corporation Substituted............................. 54
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders........... 54
SECTION 902. Supplemental Indentures With Consent of Holders.............. 55
SECTION 903. Execution of Supplemental Indentures......................... 56
SECTION 904. Effect of Supplemental Indentures............................ 56
SECTION 905. Conformity With Trust Indenture Act.......................... 57
<PAGE>
v
SECTION 906. Reference in Securities to Supplemental Indentures............ 57
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal (and Premium, if any) and
Interest, if any.............................................. 57
SECTION 1002. Maintenance of Office or Agency............................... 57
SECTION 1003. Money for Securities Payments To Be Held in Trust............. 58
SECTION 1004. Payment of Taxes and Other Claims............................. 60
SECTION 1005. Statements as to Compliance................................... 60
SECTION 1006. Corporate Existence........................................... 60
SECTION 1007. Limitations on Liens.......................................... 60
SECTION 1008. Sale and Leaseback Transactions............................... 61
SECTION 1009. Waiver of Certain Covenants................................... 62
SECTION 1010. Defeasance of Certain Obligations............................. 62
SECTION 1011. Payment of Additional Amounts................................. 63
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Applicability of This Article................................. 65
SECTION 1102. Election to Redeem; Notice to Trustee......................... 66
SECTION 1103. Selection by Trustee of Securities to Be Redeemed............. 66
SECTION 1104. Notice of Redemption.......................................... 66
SECTION 1105. Deposit of Redemption Price................................... 67
SECTION 1106. Securities Payable on Redemption Date......................... 67
SECTION 1107. Securities Redeemed in Part................................... 68
SECTION 1108. Tax Redemption; Special Tax Redemption....................... 68
ARTICLE TWELVE
Sinking Funds
SECTION 1201. Applicability of This Article................................. 70
SECTION 1202. Satisfaction of Sinking Fund Payments With Securities......... 71
SECTION 1203. Redemption of Securities for Sinking Fund..................... 71
ARTICLE THIRTEEN
Meetings of Holders of Securities
SECTION 1301. Purposes for Which Meetings May Be Called..................... 71
SECTION 1302. Call, Notice and Place of Meetings............................ 71
SECTION 1303. Persons Entitled to Vote at Meetings.......................... 72
SECTION 1304. Quorum; Action................................................ 72
SECTION 1305. Determination of Voting Rights; Conduct and
Adjournment of Meetings....................................... 73
SECTION 1306. Counting Votes and Recording Action of Meetings............... 73
<PAGE>
vi
EXHIBIT A. Form of Certificate To Be Delivered to Euro-clear or CEDEL, S.A. by
a Beneficial Owner of Securities, in Order to Receive a
Definitive Bearer Security in Exchange for an Interest in a
Temporary Global Security or to Exchange an Interest in a
Temporary Global Security for an Interest in a Permanent
Global Security.
EXHIBIT B. Form of Certificate To Be Given to the Appropriate Trustee by Euro-
clear or CEDEL, S.A. Regarding the Exchange of a Temporary
Global Security for Definitive Securities or for a Portion
of a Permanent Global Security.
EXHIBIT C. Form of Certificate To Be Delivered to Euro-clear or CEDEL, S.A. by
a Beneficial Owner of Securities, in Order to Receive
Payment on a Temporary Global Security.
EXHIBIT D. Form of Certificate To Be Given to the Appropriate Trustee by Euro-
clear or CEDEL, S.A. Regarding Payment on a Temporary Global
Security.
<PAGE>
This is an INDENTURE dated as of December 2, 1996, between Philip Morris
Companies Inc., a corporation duly incorporated and existing under the laws of
Virginia and having its principal office at 120 Park Avenue, New York, New York
(hereinafter called the "Company"), and The Chase Manhattan Bank, a corporation
organized and existing under the laws of the State of New York, as Trustee
(hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes securities (hereinafter called the "Securities") evidencing its
unsecured indebtedness and has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of the Securities,
unlimited as to principal amount, to have such titles, to bear such rates of
interest, to mature at such time or times and to have such other provisions as
shall be fixed as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done, and the Company proposes
to do all things necessary to make the Securities, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company as hereinafter provided.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or series
thereof, as follows:
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, and the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States at the date or time of such computation; and
<PAGE>
2
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Three and Article Six, are
defined in those Articles.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized to authenticate and
deliver Securities on behalf of the Trustee for the Securities of any series
pursuant to Section 614.
"Authorized Newspapers" means a 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 for
the Securities of the appropriate series to make such publication, in another
capital city in Western Europe. Such publication (which may be in different
newspapers) is expected to be made in the Eastern edition of The Wall Street
Journal, in the London edition of the Financial Times and in the Luxemburger
Wort.
"Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of that board or any director or directors and/or
officer or officers of the Company to whom that board or committee shall have
duly delegated its authority.
"Board Resolution" means (1) 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, or (2) a certificate signed by the director or directors or
officer or officers to whom the Board of Directors shall have duly delegated its
authority, and delivered to the Trustee for the Securities of any series.
"Business Day", when used with respect to any particular Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or obligated
by law to close, and shall otherwise mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions, at the
place where any specified act pursuant to this Indenture is to occur, are
authorized or obligated by law to close.
"CEDEL, S.A." means Centrale de Livraison de Valeurs Mobilieres, S.A.
"Certificate of a Firm of Independent Public Accountants" means a
certificate signed by any firm of independent public accountants of recognized
standing selected by the Company. The term "independent" when used with respect
to any specified firm of public accountants means such a firm which (1) is in
fact independent, (2) does not have any direct financial interest or any
material indirect financial interest in the Company or in any other obliger upon
the Securities of any series or in any affiliate of the Company or of such other
obliger, and (3) is not connected with the Company or such other obliger or any
affiliate of the Company or of such other obliger, as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions,
<PAGE>
3
but such firm may be the regular auditors employed by the Company. Whenever it
is herein provided that any Certificate of a Firm of Independent Public
Accountants shall be furnished to the Trustee for Securities of any series, such
Certificate shall state that the signer has read this definition and that the
signer is independent within the meaning hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"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 on such date.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by (1) the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President and by
the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller,
the Secretary or an Assistant Secretary of the Company, or (2) by any two
Persons designated in a Company Order previously delivered to the Trustee for
Securities of any series by any two of the foregoing officers and delivered to
the Trustee for Securities of any series.
"Component Currency" has the meaning specified in Section 311(h).
"Consolidated Net Tangible Assets" means the excess over current liabili-
ties of all assets properly appearing on a consolidated balance sheet of the
Company and its consolidated Subsidiaries less goodwill, trademarks, patents,
other like intangibles and the minority interests of others in Subsidiaries.
"Conversion Date" has the meaning specified in Section 311(d).
"Conversion Event" means the cessation of use of (i) a Foreign Currency by
the government of the country which issued such currency and for the settlement
of transactions by a central bank or other public institutions of or within the
international banking community, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or (iii) any currency unit other than the ECU
for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee for Securities of
any series at which at any particular time its corporate trust business shall be
principally administered, which office of The Chase Manhattan Bank, at the date
of the execution of this Indenture, is located at 450 West 33rd Street, New
York, New York 10001.
"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 New York Clearing House bank designated pursuant to Section 301 or
Section 312.
"Defaulted Interest" has the meaning specified in Section 307.
<PAGE>
4
"Depositary" means, with respect to the Securities of any series issuable
or issued in the form of a global Security, the Person designated as Depositary
by the Company pursuant to Section 301 until a successor Depositary shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
"Depositary" as used with respect to the Securities of any such series shall
mean the Depositary with respect to the Securities of that series.
"Discounted Security" means any Security which provides for an amount
(excluding any amounts attributable to accrued but unpaid interest thereon) less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 311(g).
"Dollar Equivalent of the Foreign Currency" has the meaning specified in
Section 311(f).
"Dollars" and the sign "$" mean the currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
"ECU" means the European Currency Unit as defined and revised from time to
time.
"Election Date" has the meaning specified in Section 311(h).
"Euro-clear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor, as operator of the Euro-clear system.
"European Communities" means the entity that resulted from the merger of
the European Community, the European Coal and Steel Community and the European
Atomic Energy Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Exchange Rate Officers' Certificate" means a certificate or facsimile
thereof setting forth (i) the applicable Market Exchange Rate and (ii) the
Dollar, Foreign Currency or currency unit amounts of principal (and premium, if
any) and interest, if any (on an aggregate basis and on the basis of a Security
having the lowest denomination principal amount determined in accordance with
Section 302 in the relevant currency or currency unit), payable with respect to
a Security of any series on the basis of such Market Exchange Rate, signed by
the Treasurer, any Vice President or any Assistant Treasurer of the Company.
"Foreign Currency" means a currency issued and actively maintained as a
country's or countries' recognized unit of domestic exchange by the government
of any country 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 a
particular series are payable (except as provided in Sections 311(b), 311(d)
<PAGE>
5
and 311(e), in which case with respect to Securities for which an election has
occurred pursuant to Section 311(b), or a Conversion Event has occurred as
provided in Sections 311(d) and 311(e), such obligations shall be issued in the
currency or currency unit in which such Securities are payable as a result of
such election or Conversion Event) or (ii) obligations of a Person controlled or
supervised by or acting as an agency or instrumentality of the government which
issued the currency in which the Securities of such series are payable (except
as provided in Sections 311(b), 311(d) and 311(e), in which case with respect to
Securities for which an election has occurred pursuant to Section 311(b), or a
Conversion Event has occurred as provided in Sections 311(d) and 311(e), such
obligations shall be issued in the currency or currency unit in which such
Securities are payable as a result of such election or Conversion Event), the
payment of which is unconditionally guaranteed by such government, which, in
either case, are full faith and credit obligations of such government payable in
such currency 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 a Security is registered in the
Security Register, and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means any bearer thereof.
"Indenture" means this instrument 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
a particular series of Securities established as contemplated by Section 301.
"interest", when used with respect to a Discounted Security which by its
terms bears interest only after Maturity, means interest payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Market Exchange Rate" means (i) for any conversion involving a currency
unit on the one hand and Dollars or any Foreign Currency on the other, the
exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 301 for the
Securities of the relevant series, (ii) for any conversion of Dollars into any
Foreign Currency, the noon (New York City time) buying rate for such Foreign
Currency for cable transfers quoted in New York City as certified for customs
purposes by the Federal Reserve Bank of New York and (iii) for any conversion of
one Foreign Currency into Dollars or another Foreign Currency, the spot rate at
noon local time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which conversion is
being made could be purchased with the Foreign Currency from which conversion is
being made from major banks located in either New York City, London or any other
principal market for Dollars or such purchased Foreign Currency, in each case
determined by the Currency Determination Agent. In the event of the
unavailability of any of the exchange rates provided for in the foregoing
clauses (i), (ii) and (iii) the Currency Determination Agent shall use, in its
sole discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York as of the most recent available date, or quotations
from one or more major banks in New York City, London or other principal market
for such currency or currency unit in question, or such other quotations as the
Currency Determination Agent shall deem appropriate. Unless otherwise specified
by the Currency Determination Agent, if there is more than one market for
dealing in any currency or currency unit by reason of foreign exchange
regulations or otherwise, the market to be used in respect of such currency or
currency unit shall be that upon which a nonresident issuer of securities
designated in such currency or currency unit would purchase such currency or
currency unit in order to make payments in respect of such securities. For
purposes of this definition, a "nonresident issuer" shall mean an issuer that is
not a resident of the country or countries that issue such currency or whose
currencies are included in such currency unit.
<PAGE>
6
"Maturity", when used with respect to any Security, means the date on
which the principal of that Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, request for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President (any reference to a Vice President of the Company herein
shall be deemed to include any Vice President of the Company whether or not
designated by a number or a word or words added before or after the title "Vice
President"), and by the Treasurer, an Assistant Treasurer, the Controller, an
Assistant Controller, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee for the Securities of any series.
"Opinion of Counsel" means, for purposes of Section 1108, a written
opinion of independent legal counsel of recognized standing and, for all other
purposes hereof, means a written opinion of counsel, who may be an employee of
or counsel to the Company or may be other counsel satisfactory to the Trustee
for the Securities of any series.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee for such
Securities or delivered to such Trustee for cancellation;
(2) 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 for such Securities
or any Paying Agent (other than the Company or any other obligor upon the
Securities) in trust or set aside and segregated in trust by the Company
or any other obligor upon the Securities (if the Company or any other
obligor upon the Securities shall act as its own Paying Agent) for the
Holders of such Securities; 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 such Trustee has been made; and
(3) 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 proof satisfactory to
the Trustee for such Securities that any such Securities are held by bona
fide holders in due course;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (a) 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 for such Securities
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which such Trustee knows
to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of such Trustee the pledgee's right so to act with respect
to such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor and
(b) the principal amount of a Discounted Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration pursuant to Section 502.
<PAGE>
7
"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
particular 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 contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by that
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 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, lost, destroyed 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
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means an amount, in the currency or currency unit in which such Security is
denominated or which is otherwise provided for pursuant hereto, equal to the
principal amount thereof (and premium, if any, thereon) together with accrued
interest, if any, to the Redemption Date.
"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, if any,
specified for that purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee for any
series of Securities, means the chairman or vice chairman of the board of
directors, the chairman or vice chairman of the executive committee of the board
of directors, the president, any vice president (whether or not designated by a
number or a word or words added before or after the title "vice president"), the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of such Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" means securities evidencing unsecured indebtedness of the
Company authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
A "series" of Securities means all Securities denoted as part of the same
series authorized by or pursuant to a particular Board Resolution.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee for such
series pursuant to Section 307.
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8
"Specified Amount" has the meaning specified in Section 311(h).
"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", unless specified otherwise with respect to any
particular series of Securities, means the Luxembourg Stock Exchange.
"Subsidiary" means any corporation of which at least a majority of all
outstanding stock having ordinary voting power in the election of directors of
such corporation is at the time, directly or indirectly, owned by the Company or
by one or more Subsidiaries or by the Company and one or more Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument and, subject to the provisions of Article Six hereof, shall
also include its successors and assigns as Trustee hereunder. If there shall be
at one time more than one Trustee hereunder, "Trustee" shall mean each such
Trustee and shall apply to each such Trustee only with respect to those series
of Securities with respect to which it is serving as Trustee.
"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 the District of Columbia), its territories, possessions and other areas
subject to its jurisdiction (including the Commonwealth of Puerto Rico).
"United States Alien" has the meaning specified in Section 1011.
"Valuation Date" has the meaning specified in Section 311(c).
"Yield to Maturity", when used with respect to any Discounted Security,
means the yield to maturity, if any, set forth on the face thereof.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee for any
series of Securities to take any action under any provision of this Indenture,
the Company shall furnish to such 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 (other than certificates provided pursuant to Section
1005) or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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9
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or
covenant has been complied with; and
(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 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 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 by Holders of such
series may, alternatively, be embodied in and evidenced by the record of Holders
of Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
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
for the appropriate series of Securities 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 for the appropriate series of
Securities and the Company and any agent of such Trustee or 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.
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10
(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 the certificate of any 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 an officer of a corporation
or association or a member of a partnership, or an official of a public or
governmental body, on behalf of such corporation, association, partnership
or public or governmental body or by a fiduciary, such certificate or
affidavit shall also constitute sufficient proof of his authority.
(c) The fact and date of the execution by any Person 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 for the
appropriate series of Securities deems sufficient.
(d) The principal amount and serial numbers of Registered Securities
held by any Person, and the date of holding the same, shall be proved by
the Security Register.
(e) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary,
wherever situated, if such certificate shall be deemed by the Trustee for
such Securities 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 such Trustee to
be satisfactory. The Trustee for such Securities 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 such Trustee by some other Person, (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer
Security is no longer Outstanding. The principal amount and serial numbers
of Bearer Securities held by any Person, and the date of holding the same,
may also be proved in any other manner which the Company and the Trustee
for such Securities deem sufficient.
(f) In determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver under this Indenture,
the principal amount of a Discounted Security that may be counted in
making such determination and that shall be deemed to be Outstanding for
such purposes shall be equal to the amount of the principal thereof that
would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502 at the time the taking of such
action by the Holders of such requisite principal amount is evidenced to
the Trustee for such Securities.
(g) Any request, demand, authorization, direction, notice, consent,
waiver or other action by 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 for such Securities, the Security Registrar, any Paying
Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee for a series of Securities 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 such Trustee at its Corporate
Trust Office, Attention: Corporate Trustee Administration Department, or
<PAGE>
11
(2) the Company by such Trustee or by any Holder shall be sufficient for
every purpose hereunder (except as provided in paragraphs (3), (4) and
(5) of Section 501) 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 such 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 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 who have filed their names and
addresses with the Trustee for such purpose within the previous two years if in
writing and mailed, first class postage prepaid, to each such Holder at his
address as so filed not later than the latest date and not earlier than the
earliest date prescribed for the giving of such notice, or to all other 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 the second such publication to be not later than the latest date,
prescribed herein for the giving of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder 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. Any notice mailed in the manner prescribed by this
Indenture shall be deemed to have been given whether or not received by any
particular Holder. 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 for such Securities shall constitute a
sufficient notification for every purpose hereunder.
In case by reason of the suspension 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 for such Securities 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 for such
Securities, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 107. 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 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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12
SECTION 109. 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 110. Separability Clause.
In any 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities or in any coupons appertaining
thereto, expressed or implied, shall give to any Person, other than the parties
hereto, any Paying Agent, any Security Registrar and their successors hereunder
and the Holders of Securities or coupons, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture shall be governed by and construed in accordance with the laws
of the State of New York.
SECTION 113. Non-Business Day.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of a Security of any particular series shall not be a Business Day at
any Place of Payment with respect to Securities of that series, then
(notwithstanding any other provision of this Indenture or of the Securities or
coupons) payment of principal of (and premium, if any) and interest, 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. Immunity of Incorporators, Stockholders, Officers 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 of 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 issuance of the Securities and coupons of each series.
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13
SECTION 115. Certain Matters Relating to Currencies.
Subject to Section 311, 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.
Whenever any action or Act is to be taken hereunder by the Holders of
Securities denominated in different currencies or currency units, then for
purposes of determining the principal amount of Securities held by such Holders,
the aggregate principal amount of the Securities denominated in a foreign
currency or currency unit 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 Officers' Certificate
for such Foreign Currency or currency unit into Dollars as of the date the
taking of such action or Act by the Holders of the requisite percentage in
principal amount of the Securities is evidenced to such Trustee.
SECTION 116. 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.
ARTICLE TWO
Security Forms
SECTION 201. Forms of Securities.
The Registered Securities, if any, of each series and the Bearer Securities,
if any, of each series and related coupons shall be in such form or forms
(including global form) as shall be established by or pursuant to a Board
Resolution, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with any law, with any rule or regulation
made pursuant thereto, with any rules of any securities exchange or to conform
to usage, as may, consistently herewith, be determined by the officers executing
such Securities or coupons, as evidenced by their execution of such 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.
Unless otherwise specified as contemplated by Section 301, Bearer Securities
shall have interest coupons attached.
Prior to the delivery of a Security of any series in any such form to the
Trustee for the Securities of such series for authentication, the Company shall
deliver to such Trustee the following:
(1) The Board Resolution by or pursuant to which such form of Security has
been approved;
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14
(2) An Officers' Certificate dated the date such Certificate is delivered
to such Trustee stating that all conditions precedent provided for in this
Indenture relating to the authentication and delivery of Securities in such
form have been complied with; and
(3) An Opinion of Counsel stating that Securities in such form, together
with any coupons appertaining thereto, when (a) completed by appropriate
insertions and executed and delivered by the Company to such Trustee for
authentication in accordance with this Indenture, (b) authenticated and
delivered by such Trustee in accordance with this Indenture within the
authorization as to aggregate principal amount established from time to time
by the Board of Directors, and (c) sold in the manner specified in such
Opinion of Counsel, will be the legal, valid and binding obligations of the
Company, subject to the effects of applicable bankruptcy, reorganization,
fraudulent conveyance, moratorium, insolvency and other similar laws
generally affecting creditors' rights, to general equitable principles and to
such other qualifications as such counsel shall conclude do not materially
affect the rights of Holders of such Securities.
The definitive Securities and coupons, if any, shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution thereof.
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 described
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By
------------------------------------
Authorized Officer"
SECTION 203. Securities in Global Form.
If any Security of a series is issuable in global form, 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 by the Trustee and in such manner
as shall be specified in such Security. 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.
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15
ARTICLE THREE
The Securities
SECTION 301. Title; Payment and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered and Outstanding under this Indenture is unlimited. The Securities may
be issued up to the aggregate principal amount of Securities from time to time
authorized by or pursuant to a Board Resolution.
The Securities may be issued in one or more series, each of which shall be
issued pursuant to a Board Resolution. With respect to any particular series of
Securities, the Board Resolution relating thereto shall specify:
(1) the title of the Securities of that series (which shall distinguish
the Securities of that series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
that 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 that
series pursuant to Section 304, 305, 306, 906 or 1107);
(3) whether Securities of that 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 that series is payable (which, if so provided
in such Board Resolution, 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 the manner of calculation thereof) at which the
Securities of that series shall bear interest (if any), the date or dates
from which such interest shall accrue (which, in either case or both, if so
provided in such Board Resolution, 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
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 premium, if any) and interest, if any, on Securities of
that series shall be payable, any Registered Securities of that series may be
surrendered for registration of transfer, any Securities of that series may
be surrendered for exchange, and notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served;
(7) the period or periods within which, the price or prices at which, the
currency or currency unit in which, and the terms and conditions upon which
Securities of that series may be redeemed, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of that series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof, and the period or periods
within
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16
which, the price or prices at which, the currency or currency unit in which,
and the terms and conditions upon which, Securities of that series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) if the currency in which the Securities of that series shall be
issuable is Dollars, the denominations in which any Registered Securities of
that 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 that series shall be issuable, if other than the denomination
of $5,000;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of that series which shall be payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502;
(11) any Events of Default and covenants of the Company with respect to
the Securities of that series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set forth
herein;
(12) if a Person other than The Chase Manhattan Bank is to act as Trustee
for the Securities of that series, the name and location of the Corporate
Trust Office of such Trustee;
(13) if other than Dollars, the currency or currency unit in which payment
of the principal of (and premium, if any) or interest, if any, on the
Securities of that series shall be made or in which the Securities of that
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) and interest, if any, on
the Securities of that series are to be payable, at the election of the
Company or a Holder thereof, in a currency or currency unit other than that
in which such Securities are denominated or stated to be payable, in
accordance with provisions in addition to or in lieu of, or in accordance
with the provisions of, Section 311, the period or periods within which
(including the Election Date), 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 such Securities are
denominated or stated to be payable and the currency or currency unit in
which such Securities are to be so payable;
(15) the designation of the original Currency Determination Agent, if any;
(16) if the amount of payments of principal of (and premium, if any) or
interest, if any, on the Securities of that series may be determined with
reference to an index based on a currency or currency unit other than that in
which such Securities are denominated or stated to be payable or any other
index, the manner in which such amounts shall be determined;
(17) if the Securities may be converted into or exchanged for other
securities for money borrowed of the Company, the terms and conditions
thereof;
(18) if the Securities of that series do not bear interest, the applicable
dates for purposes of Section 701;
(19) if other than as set forth in Section 401, provisions for the
satisfaction and discharge of this Indenture with respect to the Securities
of that series;
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17
(20) the date as of which any Bearer Securities of that series and any
global Security representing Outstanding Securities of that series shall be
dated if other than the date of original issuance of the first Security of
that series to be issued;
(21) the application, if any, of Section 1010 and Section 1011 to the
Securities of that series;
(22) 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 global Security or
Securities, whether such global form shall be permanent or temporary and, if
applicable, the Exchange Date;
(23) 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 can be exchanged for definitive Securities and whether the
definitive Securities will be Registered Securities and/or Bearer Securities
and will be in 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; and
(24) any other terms of that series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any particular 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, and except as may otherwise be provided in or
pursuant to such Board Resolution relating thereto. The terms of such
Securities, as set forth above, may be determined by the Company from time to
time if so provided in or established pursuant to the authority granted in a
Board Resolution. 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.
SECTION 302. Denominations and Currencies.
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, and 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, a Vice Chairman of the Board, or its
President or one of its Vice Presidents. The Securities shall be so executed
under the corporate seal of the Company reproduced thereon and attested to by
its Secretary or any 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 offices at the date of such Securities.
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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 the
Securities of such series for authentication, together with a Company Order for
the authentication and delivery of such Securities, and such Trustee, in
accordance with the Company Order, shall authenticate and deliver such
Securities; provided, however, that, during the "restricted period" (as defined
in Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations), no
Bearer Security shall be mailed or otherwise delivered to any location in the
United States; and provided, further, that a Bearer Security may be delivered
outside the United States in connection with its original issuance only if the
Person entitled to receive such Bearer Security shall have furnished to the
Trustee for the Securities of such series a certificate substantially in the
form set forth in Exhibit A to this Indenture. If any Security shall be
represented by a permanent global Security, then, for purposes of this Section
and Section 304, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange of a portion of a temporary
global Security shall be deemed to be delivery in connection with the original
issuance of such beneficial owner's interest in such permanent global Security.
Except as permitted by Section 306 or 307, the Trustee for the Securities of a
series shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured other than matured coupons in
default 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 relating to
such Securities shall so permit, such Company Order may set forth procedures
acceptable to the Trustee for the issuance of such Securities, including,
without limitation, procedures with respect to interest rate, Stated Maturity,
date of issuance and date from which interest, if any, shall accrue.
Notwithstanding any contrary provision herein, if all Securities of a series
are not to be originally issued at one time, it shall not be necessary to
deliver the Board Resolution, Officers' Certificate and Opinion of Counsel
otherwise required pursuant to Sections 102 and 201 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
shall be dated as of the date of original issuance of the first Security of such
series to be issued.
No Security or coupon appertaining thereto 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 manually executed by the Trustee for such Security or
on its behalf pursuant to Section 614, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder.
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, as amended, and any other applicable statute or
regulation.
SECTION 304. Temporary Securities and Exchange of Securities.
Pending the preparation of definitive Securities of any particular series,
the Company may execute, and upon Company Order the Trustee for the Securities
of such series shall authenticate and deliver, in the manner specified in
Section 303, temporary Securities which are printed, lithographed, typewritten,
photocopied or otherwise produced, in any denomination, with like terms and
conditions as the definitive Securities of like series 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.
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19
Except in the case of temporary Securities in global form (which shall be
exchanged only in accordance with the provisions of the following paragraphs),
if temporary Securities of any particular series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of such definitive Securities, the temporary
Securities of such series shall be exchangeable for such definitive Securities
and of a like Stated Maturity and with like terms and provisions upon surrender
of the temporary Securities of such series, together with all unmatured and
matured coupons in default, if any, 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 particular
series, the Company shall execute and (in accordance with a Company Order
delivered at or prior to the authentication of the first definitive Security of
such series) the Trustee for the Securities of such series or the Global
Exchange Agent shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of authorized denominations of the
same series and of a like Stated Maturity and with like terms and provisions;
provided, however, unless otherwise specified pursuant to Section 301, no
definitive Bearer Security shall be delivered in exchange for a temporary
Registered Security; and provided, further, that a definitive Bearer Security
shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 303. Until exchanged as
hereinabove provided, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of the same series and with like terms and conditions, except as to
payment of interest, if any, authenticated and delivered hereunder.
Any temporary global Security and any permanent global Security shall, unless
otherwise provided therein, be delivered to a Depositary designated pursuant to
Section 301.
Without unnecessary delay but in any event not later than the date specified
in or determined pursuant to the terms of any such temporary global Security
(the "Exchange Date"), the Securities represented by any temporary global
Security of a series of Securities issuable in bearer form may be exchanged for
definitive Securities (subject to the second succeeding paragraph) or Securities
to be represented thereafter by one or more permanent global Securities, without
interest coupons. On or after the Exchange Date such temporary global Security
shall be surrendered by the Depositary to the Trustee for such Security, as the
Company's agent for such purpose, or the agent appointed by the Company pursuant
to Section 301 to effect the exchange of the temporary global Security for
definitive Securities (the "Global Exchange Agent"), and following such
surrender, such Trustee or the Global Exchange Agent (as authorized by the
Trustee as an Authenticating Agent pursuant to Section 614) shall (1) endorse
the temporary global Security to reflect the reduction of its principal amount
by an equal aggregate principal amount of such Security, (2) endorse the
applicable permanent global Security, if any, to reflect the initial amount, or
an increase in the amount of Securities represented thereby, (3) manually
authenticate such definitive Securities or such permanent global Security, as
the case may be, (4) subject to Section 303, deliver such definitive Securities
to the Holder thereof or, as the case may be, deliver such permanent global
Security to the Depositary to be held outside the United States for the accounts
of Euro-clear and CEDEL, S.A., for credit to the respective accounts at Euro-
clear and CEDEL, S.A., 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 cancelled in accordance with Section 309 hereof;
provided, however, that, unless otherwise specified in such temporary global
Security, 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 Euro-clear as to the portion of such temporary
global Security held for its account then to be exchanged for definitive
Securities or one or more permanent global Securities, as the case may be, and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL,
S.A., as to the portion of such temporary global Security held for its account
then to be exchanged for definitive Securities or one or more permanent global
Securities, 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 Euro-clear or CEDEL, S.A., as the case may be, shall be
based on certificates of the account holders listed in the records of Euro-clear
or CEDEL, S.A., as the case may be, as being entitled to all or any portion of
the applicable temporary global Security. An account holder of
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20
Euro-clear or CEDEL, S.A., as the case may be, desiring to effect the exchange
of interest in a temporary global Security for an interest in definitive
Securities or one or more permanent global Securities shall instruct Euro-clear
or CEDEL, S.A., as the case may be, to request such exchange on its behalf and
shall deliver to Euro-clear or CEDEL, S.A., 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. Until so exchanged, temporary global Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities and permanent global Securities of the same series
authenticated and delivered hereunder, except as provided in the fourth
succeeding paragraph.
The delivery to the Trustee for the Securities of the appropriate series or
the Global Exchange Agent by Euro-clear or CEDEL, S.A. of any certificate
substantially in the form of Exhibit B hereto may be relied upon by the Company
and such Trustee or the Global Exchange Agent as conclusive evidence that a
corresponding certificate or certificates has or have been delivered to Euro-
clear or to CEDEL, S.A., as the case may be, pursuant to the terms of this
Indenture.
On or prior to the Exchange Date, the Company shall deliver to the Trustee
for the Securities of the appropriate series or the Global Exchange Agent
definitive Securities in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. At any time,
on or after the Exchange Date, upon 30 days' notice to the Trustee for the
Securities of the appropriate series or the Global Exchange Agent by Euro-clear
or CEDEL, S.A., as the case may be, acting at the request of or on behalf of the
beneficial owner, a Security represented by a temporary global Security or a
permanent global Security, as the case may be, may be exchanged, in whole or
from time to time in part, for definitive Securities without charge and such
Trustee or the Global Exchange Agent shall authenticate and deliver, in exchange
for each portion of such temporary global Security or such permanent global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and with like terms and provisions as
the portion of such temporary global Security or 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 definitive Bearer Securities shall be delivered
in exchange for a portion of the temporary global Security or the permanent
global Security only in compliance with the requirements of the second preceding
paragraph. On or prior to the thirtieth day following receipt by the Trustee for
the Securities of the appropriate series or the Global Exchange Agent of such
notice with respect to a Security, or, if such day is not a Business Day, the
next succeeding Business Day, the temporary global Security or the permanent
global Security, as the case may be, shall be surrendered by the Depositary to
such Trustee, as the Company's agent for such purpose, or the Global Exchange
Agent to be exchanged in whole, or from time to time in part, for definitive
Securities without charge following such surrender, upon the request of Euro-
clear or CEDEL, S.A., as the case may be, and such Trustee or the Global
Exchange Agent shall (1) endorse the applicable temporary global Security or the
permanent global Security to reflect the reduction of its principal amount by
the aggregate principal amount of such Security, (2) in accordance with
procedures acceptable to the Trustee cause the terms of such Security and
coupons, if any, to be entered on a definitive Security, (3) manually
authenticate such definitive Security and (4) if a Bearer Security is to be
delivered, deliver such definitive Security outside the United States to Euro-
clear or CEDEL, S.A., 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 such temporary global Security or permanent
global Security, 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 Euro-clear or CEDEL, S.A. Definitive Securities in bearer form to be
delivered in exchange for any portion of a temporary global Security or a
permanent global Security shall be delivered only outside the United States.
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21
Until exchanged in full as hereinabove provided, any temporary global
Security or permanent global Security shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of the same series
and with like terms and conditions, except as to payment of interest, if any,
authenticated and delivered hereunder. Unless otherwise specified as
contemplated by Section 301, interest payable on such temporary global Security
on an Interest Payment Date for Securities of such series shall be payable to
Euro-clear and CEDEL, S.A. on such Interest Payment Date upon delivery by Euro-
clear and CEDEL, S.A. to the Trustee for the Securities of the appropriate
series or the Global Exchange Agent in the case of payment of interest on a
temporary global Security with respect to an Interest Payment Date occurring
prior to the applicable Exchange Date of a certificate or certificates
substantially in the form set forth in Exhibit C 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 global
Security on such Interest Payment Date and who have, in the case of payment of
interest on a temporary global Security with respect to an Interest Payment Date
occurring prior to the applicable Exchange Date, each delivered to Euro-clear or
CEDEL, S.A., as the case may be, a certificate substantially in the form set
forth in Exhibit D to this Indenture.
Any definitive Bearer Security authenticated and delivered by the Trustee for
the Securities of the appropriate series or the Global Exchange Agent in
exchange for a portion of a temporary global Security or a permanent global
Security shall not bear a coupon for any interest which shall theretofore have
been duly paid by such Trustee to Euro-clear or CEDEL, S.A. or by the Company to
such Trustee in accordance with the provisions of this Section 304.
With respect to Exhibits A, B, C and D to this Indenture, the Company may, in
its discretion and if required or desirable under applicable law, substitute one
or more other forms of such exhibits for such exhibits, eliminate the
requirement that any or all certificates be provided, or change the time that
any certificate may be required, provided that such substitute form or forms or
notice of elimination or change of such certification requirement have
theretofore been delivered to the Trustee with a Company Request and such form
or forms, elimination or change is reasonably acceptable to the Trustee.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee for the Securities of each series a register (the register maintained in
such office being herein sometimes 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 for the Securities of each series is hereby
initially appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities of such series as
herein provided.
Upon surrender for registration of transfer of any Registered Security of any
particular series at the office or agency of the Company in a Place of Payment
for that series, the Company shall execute, and the Trustee for the Securities
of each series shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of any
authorized denominations, and of a like Stated Maturity and of a like series and
aggregate principal amount and with like terms and conditions.
Except as set forth below, at the option of the Holder, Registered Securities
of any particular series may be exchanged for other Registered Securities of any
authorized denominations, and of a like Stated Maturity and of a like series and
aggregate principal amount and with like terms and conditions, upon surrender of
the Registered Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee for such Securities shall authenticate and deliver, 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.
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22
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, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and with like terms and provisions upon
surrender of the Bearer Securities to be exchanged at any office or agency of
the Company in a Place of Payment for that series, with all unmatured coupons
and all matured coupons in default thereto appertaining. If the Holder of a
Bearer Security is unable to produce any such unmatured coupon or coupons or
matured coupon or coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
(or to the Trustee for the Security in case of matured coupons in default) 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
such 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 of the Company in a Place of Payment for that series
located outside the United States. Notwithstanding the foregoing, in case a
Bearer Security of any series is surrendered at any such office or agency in
exchange for a Registered Security of the same series and with like terms and
conditions after the close of business at such office or agency on or after (i)
any Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be (or, if such coupon is so
surrendered with such Bearer Security, such coupon shall be returned to the
person so surrendering the 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 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 for such Securities shall authenticate and deliver, 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 execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Securities of such
series, will authenticate and deliver Securities of such series in definitive
form in an aggregate principal amount equal to the principal amount of the
global Security or Securities representing such series in exchange for such
global Security or 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
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23
Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Registered Securities of such series, will authenticate and deliver, Registered
Securities of such series in definitive form and in an aggregate principal
amount equal to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or 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 Security for such series of Securities in exchange in
whole or in part for 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 deliver, without service charge, (i) to each Person specified
by such Depositary a new 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 Securities delivered to Holders
thereof.
Upon the exchange 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 in writing. The Trustee
shall deliver such Registered Security 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 Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee for such Security)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar for such series duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 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
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption 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,
however, that such Registered Security shall be simultaneously surrendered for
redemption.
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24
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.
If (i) any mutilated Security or a Security with a mutilated coupon
appertaining thereto is surrendered to the Trustee for such Security or the
Company and the Trustee for a Security receive evidence to their satisfaction of
the destruction, loss or theft of any Security or coupon and (ii) there is
delivered to the Company and such Trustee 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 such Trustee that such Security
or coupon has been acquired by a bona fide purchaser, the Company shall execute
and upon its request such Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security or in exchange for such mutilated
Security, or in exchange for the Security to which a mutilated, destroyed, lost
or stolen coupon appertains (with all appurtenant coupons not mutilated,
destroyed, lost or stolen) a new Security of the same series and in a like
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 mutilated, destroyed,
lost or stolen Security or to the Security to which such mutilated, 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 (without
surrender thereof except in the case of a mutilated Security or coupon) if the
applicant for such payment shall furnish to the Company and the Trustee for such
Security such security or indemnity as may be required by them to save each of
them harmless, and in case of destruction, loss or theft, evidence satisfactory
to the Company and such Trustee and any agent of either of them of the
destruction, loss or theft of such Security and the ownership thereof; provided,
however, that the principal of (and premium, if any) and interest, if any, on
Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
all fees and expenses of the Trustee for such Security) 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 any mutilated Security, or in exchange for a Security to which a mutilated,
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 the same 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, if so provided in such
Security, 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 payment.
Unless otherwise provided with respect to the Securities of any series,
payment of interest may be made at the option of the Company (i) in the case of
Registered Securities, by check mailed or delivered to the address of
<PAGE>
25
the Person entitled thereto as such address shall appear in the Security
Register or by transfer to an account maintained by the payee with a bank
located inside the United States, or (ii) in the case of Bearer Securities, upon
presentation and surrender of the appropriate coupon appertaining thereto or by
transfer to an account maintained by the payee with a bank located outside the
United States.
Unless otherwise provided or contemplated by Section 301, every permanent
global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to each of Euro-clear and CEDEL, S.A. with respect to
that portion of such permanent global Security held for its account by the
Depositary. Each of Euro-clear and CEDEL, S.A. 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 particular 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 registered Holder on the relevant Regular Record Date by virtue
of having been such Holder; and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) 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 that 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 for
the Registered Securities of such series in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security of that
series and the date of the proposed payment, and at the same time the Company
shall deposit with such 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 such 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 such Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall not be 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 such Trustee of the notice of
the proposed payment. Such 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 that series at his address as it
appears in the Security Register not less than 10 days prior to such Special
Record Date. Such Trustee may, in its discretion, in the name and at the
expense of the Company, cause a similar notice to be published at least once
in a newspaper published in the English language, customarily on each
Business Day and of general circulation in New York, New York, but such
publication shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities of that series (or their respective
Predecessor Securities) are registered on such Special Record Date and shall
no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on Registered
Securities of any particular series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Registered Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice is given by the Company to the Trustee for
the Securities of such series of the proposed manner of payment pursuant to
this clause, such manner of payment shall be deemed practicable by such
Trustee.
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26
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 for such Security and any agent of the
Company or such Trustee may treat the Person in whose name any such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to 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, such Trustee nor any agent of the
Company or such 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 for such Security and any agent of the
Company or such Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon as the absolute owner of such Bearer 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, such Trustee nor any agent of the Company or such 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.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption, registration
of transfer or exchange, or delivered in satisfaction of any sinking fund
payment, shall, if surrendered to any Person other than the Trustee for such
Securities, be delivered to such 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 for such Securities
shall be cancelled by such Trustee. The Company may at any time deliver to the
Trustee for Securities of a series 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 such 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 such Security 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 such
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 for such Securities shall be disposed
of by such Trustee in accordance with its standard procedures and a certificate
of disposition evidencing such disposition of Securities and coupons shall be
provided to the Company by such Trustee. In the case of any temporary global
Security, which shall be disposed of if the entire aggregate principal amount of
the Securities represented thereby has been exchanged, the certificate of
disposition shall state that all certificates required pursuant to Section 304
hereof, substantially in the form of Exhibit B hereto (or in the form of any
substitute exhibit as provided in the last paragraph of Section 304), to be
given by Euro-clear or CEDEL, S.A., have been duly presented to the Trustee for
such Securities by Euro-clear or CEDEL, S.A., as the case may be. Permanent
global
<PAGE>
27
Securities shall not be disposed of until exchanged in full for definitive
Securities or until payment thereon is made in full.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any particular 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 Securities.
(a) With respect to Registered Securities of any series not permitting the
election provided for in paragraph (b) below or the Holders of which have not
made the election provided for in paragraph (b) below, and with respect to
Bearer Securities of any series, except as provided in paragraph (d) below,
payment of the principal of (and premium, if any) and interest, if any, on any
Registered or Bearer Security of such series will be made in the currency or
currency unit in which such Registered Security or Bearer Security, as the case
may be, is payable.
(b) It may be provided pursuant to Section 301 with respect to Registered
Securities of any series that Holders shall have the option, subject to
paragraphs (d) and (e) below, to receive payments of principal of (and premium,
if any) or interest, if any, on such Registered Securities in any of the
currencies or currency units which may be designated for such election by
delivering to the Trustee for such series of Registered Securities a written
election with signature guarantees and in form and substance satisfactory to
such Trustee, not later than the close of business on the Election Date
immediately preceding the applicable payment date. If a Holder so elects to
receive such payments in any such currency or currency unit, such election will
remain in effect for such Holder until changed by such Holder by written notice
to the Trustee for such series of Registered Securities (but any such change
must be made not later than the close of business on the Election Date
immediately preceding the next payment date to be effective for the payment to
be made on such payment date and no such change of election may be made with
respect to payments to be made on any Registered Security of such series with
respect to which an Event of Default has occurred or notice of redemption has
been given by the Company pursuant to Article Eleven). In the event any Holder
makes any such election pursuant to the preceding sentence, such election will
not be effective on any transferee of such Holder and such transferee shall be
paid in the currency or currency unit indicated pursuant to paragraph (a) above
unless such transferee makes an election pursuant to the preceding sentence;
provided, however, that such election, if in effect while funds are on deposit
with respect to the Securities of such series as described in Section
401(a)(1)(B) or Section 1010, will be effective on any transferee of such Holder
unless otherwise specified pursuant to Section 301 for the Securities of such
series. Any Holder of any such Registered Security who shall not have delivered
any such election to the Trustee of such series of Registered Securities not
later than the close of business on the applicable Election Date will be paid
the amount due on the applicable payment date in the relevant currency or
currency unit as provided in paragraph (a) of this Section 311. In no case may
a Holder of Securities of any series elect, or change an election, to receive
payments in any currency or currency unit as described in this Section 311(b)
following a deposit of funds with respect to the Securities of such series as
described in Section 401(a)(1)(B) or Section 1010. The Trustee for each such
series of Registered Securities shall notify the Currency Determination Agent as
soon as practicable after the Election Date of the aggregate principal amount of
Registered Securities for which Holders have made such written election.
(c) If the election referred to in paragraph (b) above has been provided for
pursuant to Section 301, then not later than the fourth Business Day after the
Regular Record Date or Special Record Date, as the case may be, for each payment
date for Registered Securities of any series, the Currency Determination Agent
will deliver to the Company a written notice specifying, in the currency or
currency unit in which Registered Securities of such series are payable, the
respective aggregate amounts of principal of (and premium, if any) and interest,
if any, on the Registered Securities to be made on such payment date, specifying
the amounts in such currency or currency unit so payable in respect of the
Registered Securities of such series as to which the Holders thereof shall have
elected
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28
to be paid in a currency or currency unit other than that in which such series
is denominated as provided in paragraph (b) above. If the election referred to
in paragraph (b) above has been provided for pursuant to Section 301 and if at
least one Holder has made such election, then, on the second Business Day
preceding such payment date the Company will deliver to the Trustee for such
series of Registered Securities an Exchange Rate Officers' Certificate in
respect of the Dollar, Foreign Currency, ECU or currency unit payments to be
made on such payment date. The Dollar, Foreign Currency, ECU or currency unit
amount receivable by Holders of Registered Securities who have elected payment
in a currency or currency unit as provided in paragraph (b) above shall, unless
otherwise provided pursuant to Section 301, be determined by the Company on the
basis of the applicable Market Exchange Rate in effect on the third Business Day
(the "Valuation Date") immediately preceding each payment date.
(d) If a Conversion Event occurs with respect to a Foreign Currency, the ECU
or any other currency unit in which any of the Securities are denominated or
payable other than pursuant to an election provided for pursuant to paragraph
(b) above, then with respect to each date for the payment of principal of (and
premium, if any) and interest, if any, on the applicable Securities denominated
or payable in such Foreign Currency, the ECU or such other currency unit
occurring after the last date on which such Foreign Currency, the ECU or such
other currency unit was available (the "Conversion Date"), the Dollar shall be
the currency of payment for use on each such payment date. The Dollar amount to
be paid by the Company to the Trustee of each such series of Securities and by
such Trustee or any Paying Agent to the Holders of such Securities with respect
to such payment date shall be the Dollar Equivalent of the Foreign Currency or,
in the case of a currency unit, the Dollar Equivalent of the Currency Unit, in
each case as determined by the Currency Determination Agent in the manner
provided in paragraph (f) or (g) below.
(e) If the Holder of a Registered Security denominated in any currency or
currency unit shall have elected to be paid in another currency or currency unit
as provided in paragraph (b) above, and a Conversion Event occurs with respect
to such elected currency or currency unit, such Holder shall receive payment in
the currency or currency unit in which payment would have been made in the
absence of such election. If a Conversion Event occurs with respect to the
currency or currency unit in which payment would have been made in the absence
of such election, such Holder shall receive payment in Dollars as provided in
paragraph (d) of this Section 311.
(f) The "Dollar Equivalent of the Foreign Currency" shall be determined by
the Currency Determination Agent and shall be obtained for each subsequent
payment after the Conversion Date by converting the specified Foreign Currency
into Dollars at the Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined by the
Currency Determination Agent and, subject to the provisions of paragraph (h)
below, shall be the sum of each amount obtained by converting the Specified
Amount of each Component Currency into Dollars at the Market Exchange Rate for
such Component Currency on the Valuation Date with respect to each payment.
(h) For purposes of this Section 311 the following terms shall have the
following meanings:
A "Component Currency" shall mean any currency which, on the Conversion Date,
was a component currency of the relevant currency unit, including, but not
limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the number of units
of such Component Currency or fractions thereof which were represented in the
relevant currency unit, including, but not limited to, the ECU, on the
Conversion Date. If after the Conversion Date the official unit of any
Component Currency is altered by way of combination or subdivision, the
Specified Amount of such Component Currency shall be divided or multiplied in
the same proportion. If after the Conversion Date two or more Component
Currencies are consolidated into a single currency, the respective Specified
Amounts of such Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the respective Specified Amounts of such
<PAGE>
29
consolidated Component Currencies expressed in such single currency, and such
amount shall thereafter be a Specified Amount and such single currency shall
thereafter be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more currencies, the Specified Amount of
such Component Currency shall be replaced by amounts of such two or more
currencies, each of whose Dollar Equivalent at the Market Exchange Rate on the
date of such replacement shall be equal to the Dollar Equivalent of the
Specified Amount of such former Component Currency at the Market Exchange Rate
on such date divided by the number of currencies into which such Component
Currency was divided, and such amounts shall thereafter be Specified Amounts and
such currencies shall thereafter be Component Currencies. If, after the
Conversion Date of the relevant currency unit, including, but not limited to,
the ECU, a Conversion Event (other than any event referred to above in this
definition of "Specified Amount") occurs with respect to any Component Currency
of such currency unit and is continuing on the applicable Valuation Date, the
Specified Amount of such Component Currency shall, for purposes of calculating
the Dollar Equivalent of the Currency Unit, be converted into Dollars at the
Market Exchange Rate in effect on the Conversion Date of such Component
Currency.
"Election Date" shall mean the date for any series of Registered Securities
as specified pursuant to Section 301(14) by which the written election referred
to in Section 311(b) may be made, such date to be not later than the Regular
Record Date or Special Record Date, as the case may be, for the earliest payment
for which such election may be effective.
All decisions and determinations of the Currency Determination Agent
regarding the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent
of the Currency Unit, the Market Exchange Rate and changes in the Specified
Amounts as specified above shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and irrevocably
binding upon the Company, the Trustee for the appropriate series of Securities
and all Holders of such Securities denominated or payable in the relevant
currency or currency units. The Currency Determination Agent shall promptly give
written notice to the Company and the Trustee for the appropriate series of
Securities of any such decision or determination.
In the event of a Conversion Event with respect to a Foreign Currency, the
Company, after learning thereof, will immediately give written notice thereof to
the Trustee of the appropriate series of Registered Securities and Currency
Determination Agent (and such Trustee will promptly thereafter give notice in
the manner provided in Section 106 to the Holders) specifying the Conversion
Date. In the event of a Conversion Event with respect to the ECU or any other
currency unit in which Registered Securities are denominated or payable, the
Company, after learning thereof, will immediately give written notice thereof to
the Trustee of the appropriate series of Registered Securities and Currency
Determination Agent (and such Trustee will promptly thereafter give notice in
the manner provided in Section 106 to the Holders) specifying the Conversion
Date and the Specified Amount of each Component Currency on the Conversion Date.
In the event of any subsequent change in any Component Currency as set forth in
the definition of Specified Amount above, the Company, after learning thereof,
will similarly give written notice to the Trustee of the appropriate series of
Registered Securities and Currency Determination Agent.
The Trustee of the appropriate series of Registered Securities shall be fully
justified and protected in relying and acting upon information received by it
from the Company and the Currency Determination Agent 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 unit or a currency other than Dollars or (ii) may be payable in a
currency unit or 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
<PAGE>
30
pursuant to Section 301 for the purpose of determining the applicable rate of
exchange and for the purpose of converting the issued currency or currency unit
into the applicable payment currency or currency unit for the payment of
principal (and premium, if any) 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 of the appropriate series of Securities 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).
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 for the Securities of such
series, upon Company Request and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of such
indebtedness, when:
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 305, (ii) 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 is not required as provided in
Section 1106 and (iv) Securities and coupons of such series for whose payment
money has theretofore been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or discharged from such
trust, as provided in the last paragraph of Section 1003) have been delivered
to such Trustee for cancellation; or
(B) with respect to all Outstanding Securities of such series described
in (A) above (and, in the case of (i) or (ii) below, any coupons appertaining
thereto) not theretofore so delivered to the Trustee for the Securities of
such series for cancellation:
(i) the Company has deposited or caused to be deposited with such
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
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31
Sections 311(b), 311(d) and 311(e), 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 Sections
311(d) and 311(e), 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
(ii) the Company has deposited or caused to be deposited with such
Trustee as obligations in trust such amount of Government Obligations as
will, as evidenced by a Certificate of a Firm of Independent Public
Accountants delivered to such 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 such
Trustee in trust an amount equal to the amount referred to in clause (i) or
(ii) in any combination of currency or currency unit or Government
Obligations;
(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 such 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 such Trustee as of the date
of such deposit, then the Company shall have given, not later than the date of
such deposit, notice of such deposit to the Holders of such Securities.
(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 (i) any payment obligations in
respect of Securities of such series and any related coupons which are deemed
not to be Outstanding under clause (3) of the definition thereof if such
obligations continue to be valid obligations of the Company under applicable
law, (ii) from any obligations under Sections 402(b), 607, 610 and 1010 and
(iii) from any obligations under Sections 305 and 306 (except that Securities of
such series issued upon registration of transfer or exchange or in lieu of
mutilated, destroyed, lost 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 the Bankruptcy Act of
1978 or 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 denominated in
Dollars, upon the happening of any Conversion Event the Company shall
<PAGE>
32
be obligated to make the payments in Dollars required by Section 311(d) to the
extent that the Currency Determination Agent 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 the Foreign Currency or the Dollar Equivalent of
the 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) or
311(e), 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 at the Dollar Equivalent of the Foreign Currency or the Dollar
Equivalent of the Currency Unit. The Trustee for such series of Securities
shall return to the Company any non-converted funds or securities in its
possession after such payments have been made.
SECTION 402. Application of Trust Money.
(a) All money and obligations deposited with the Trustee for any
series of Securities pursuant to Section 401 shall be held irrevocably in trust
and shall be made under the terms of an escrow trust agreement in form
satisfactory to such Trustee. Such money and obligations shall be applied by
such 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 such 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 such
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 any series of
Securities for the giving of notice of redemption by such Trustee in the name,
and at the expense, of the Company.
(b) The Company shall pay and shall indemnify the Trustee for any
series of Securities against any tax, fee or other charge imposed on or assessed
against Government Obligations deposited pursuant to Section 401 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 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 Section 401 which, as expressed in a Certificate of a Firm of
Independent Public Accountants delivered to such 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 provided such delivery can be made without liquidating any Government
Obligations.
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 complying with the provisions of Section
102, the Trustees for all series of Securities (at the expense of the Company)
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture.
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33
Notwithstanding the satisfaction and discharge of this Indenture, any
obligations of the Company under Sections 304, 305, 306, 311, 402(b), 516, 607,
610, 701, 1002 and 1011 and the obligations of the Trustee for any series of
Securities under Section 402 shall survive.
SECTION 404. Reinstatement.
If the Trustee for any series of Securities is unable to apply any of the
amounts (for purposes of this Section 404, "Amounts") or Government Obligations,
as the case may be, described in Section 401(a)(1)(B)(i) or (ii), respectively,
in accordance with the provisions of Section 401 by reason of any legal
proceeding or any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities of such series and the
coupons, if any, appertaining thereto shall be revived and reinstated as though
no deposit had occurred pursuant to Section 401 until such time as the Trustee
for such series is permitted to apply all such Amounts or Government
Obligations, as the case may be, in accordance with the provisions of Section
401; provided, however, that if, due to the reinstatement of its rights or
obligations hereunder, the Company has made any payment of principal of (or
premium, if any) or interest, if any, on such Securities or coupons, the Company
shall be subrogated to the rights of the Holders of such Securities or coupons
to receive payment from such Amounts or Government Obligations, as the case may
be, held by the Trustee for such series.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default" wherever used herein with respect to any particular series
of Securities means any one of the following events and such other events as may
be established with respect to the Securities of such series as contemplated by
Section 301 (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law 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 instalment of 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 default in the deposit of
any sinking fund payment when and as due by the terms of any Security of that
series; or
(3) default in the performance of, or breach of, any covenant or
warranty of the Company in respect of any Security of that series contained
in this Indenture or in such Securities (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with) or in the applicable Board Resolution under which
such series is issued 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 for the
Securities of such series or to the Company and such 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
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(4) the Company shall commence any case or proceeding seeking to have
an order for relief entered on its behalf as debtor or to adjudicate it as
bankrupt or insolvent or seeking reorganization, liquidation, dissolution,
winding-up, arrangement, composition or readjustment of its debts or any
other relief under any bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement, composition, readjustment of debt or other similar
act or law of any jurisdiction, domestic or foreign, now or hereafter
existing; or the Company shall apply for a receiver, custodian or trustee
(other than any trustee appointed as a mortgagee or secured party in
connection with the issuance of indebtedness for borrowed money of the
Company) of it or for all or a substantial part of its property; or the
Company shall make a general assignment for the benefit of creditors; or the
Company shall take any corporate action in furtherance of any of the
foregoing; or
(5) an involuntary case or other proceeding shall be commenced against
the Company with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect seeking the appointment of a
trustee, receiver, liquidator, custodian or similar official of it or any
substantial part of its property; and such case or other proceeding (A)
results in the entry of an order for relief or a similar order against it or
(B) shall continue unstayed and in effect for a period of 60 consecutive
days; or
(6) any other Event of Default provided in the Security or the Board
Resolution with respect to Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to any particular series of Securities
and any related coupons occurs and is continuing, then and in every such case
either the Trustee for the Securities of such series or the Holders of not less
than 25% in principal amount of the Outstanding Securities of that series may
declare the entire principal amount (or, in the case of Discounted Securities,
such lesser amount as may be provided for in the terms of that series) of all
the Securities of that series, to be due and payable immediately, by a notice in
writing to the Company (and to such Trustee if given by Holders), and upon any
such declaration of acceleration such principal or such lesser amount, as the
case may be, together with accrued interest and all other amounts owing
hereunder, shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived.
At any time after such a declaration of acceleration has been made and before
a judgment or decree for payment of the money due has been obtained by the
Trustee for the Securities of any series 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 such Trustee,
may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with such 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), 311(d), and 311(e))
(A) all overdue interest 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 from the date such principal became due
at a rate per annum equal to the rate borne by the Securities of such
series (or, in the case of Discounted Securities, the Securities' Yield to
Maturity), to the extent that the payment of such interest shall be legally
enforceable;
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(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at a rate per annum equal to the rate borne
by the Securities of such series (or, in the case of Discounted Securities,
the Securities' Yield to Maturity); and
(D) all sums paid or advanced by such Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of such
Trustee, its agents and counsel and all other amounts due to such Trustee
under Section 607;
and
(2) all Events of Default with respect to the Securities of such
series, other than the nonpayment of the principal of Securities of that
series which has become due solely by such 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 upon 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; or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at its Maturity;
the Company will, upon demand of the Trustee for the Securities of such series,
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 installments of interest at a
rate per annum equal to the rate borne by such Securities (or, in the case of
Discounted Securities, the Securities' Yield to Maturity); and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of such Trustee, its agents and counsel and all other
amounts due to such Trustee under Section 607.
If the Company fails to pay such amounts forthwith upon such demand, such
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, and may
prosecute such proceedings to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any particular series
occurs and is continuing, the Trustee for the Securities of such series may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of that series by such appropriate judicial proceedings as
such 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.
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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 relating 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 for the Securities of such series (irrespective
of whether the principal (or lesser amount in the case of Discounted Securities)
of any Security of such series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether such
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 lesser amount in the case of Discounted Securities) (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 such Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of such Trustee, its agents and counsel
and all other amounts due to such Trustee under Section 607) and of the
Holders of the Securities of such series and any related coupons allowed in
such judicial proceeding;
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and
(iii) unless prohibited by law or applicable regulations, to
vote on behalf of the Holders of the Securities of such series in any
election of a trustee in bankruptcy or other person performing similar
functions;
and any 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 such Trustee, and in the event
that such Trustee shall consent to the making of such payments directly to the
Holders of Securities and coupons, to pay to such Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of such
Trustee, its agents and counsel, and any other amounts due such Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee for the
Securities of any series 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 of such series or the rights
of any Holder thereof, or to authorize the Trustee for the Securities or coupons
of any series to vote in respect of the claim of any Holder in any such
proceeding, except as aforesaid, for the election of a trustee in bankruptcy or
other person performing similar functions.
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 for the
Securities of any series 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 such 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 such Trustee, its agents and counsel and all other
amounts due to such Trustee under Section 607, be for the ratable benefit of the
Holders of the Securities and coupons of such series in respect of which such
judgment has been recovered.
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SECTION 506. Application of Money Collected.
Any money collected by the Trustee for the Securities of any series pursuant
to this Article with respect to the Securities or coupons of such series shall
be applied in the following order, at the date or dates fixed by such 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 Securities or
coupons of such series, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due such Trustee under Section 607;
Second: To the payment of the amounts then due and unpaid upon the
Securities and coupons of such series for principal of (and premium, if any)
and interest, if any, on such Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities and coupons for principal (and premium, if any) and interest, if
any, 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 particular 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 with respect to that series shall have occurred and
be continuing and such Holder shall have previously given written notice to
the Trustee for the Securities of such series of such default and the
continuance thereof;
(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 for
the Securities of such series 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 such Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) such 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
such 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 Holders of Securities of
that series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Securities of that series, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders of Securities of that series.
SECTION 508. Unconditional Right of Holders to Receive Principal (and Premium,
if any) and Interest, if any.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right which is absolute and unconditional to
receive payment of the principal of (and premium, if any) and (subject
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to Section 307) interest, if any, on such Security on the respective 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 right shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee for the Securities of any series 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 such Trustee or to such Holder, then
and in every such case the Company, such Trustee and the Holders of Securities
or coupons shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of such Trustee and such 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 for the Securities of any series 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 for the Securities of any series or of
any Holder of any Security of such series to exercise any right or remedy
accruing upon any Event of Default with respect to the Securities of such series
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 such Trustee for the Securities or coupons of any series or
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Trustee or by the 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 particular series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee for
the Securities of such series with respect to the Securities of that series or
exercising any trust or power conferred on such Trustee with respect to such
Securities, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Indenture and could not involve the Trustee in personal liability; and
(2) such Trustee may take any other action deemed proper by such Trustee
which is not inconsistent with such direction.
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SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any particular series and any related coupons may on
behalf of the Holders of all the Securities of that series waive any past
default hereunder with respect to that series and its consequences, except:
(1) a default in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of that series; or
(2) a default with respect to 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 that series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
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 the
Securities or coupons of any series for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee for the Securities
of any series, 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 particular 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 of such series or the
payment of any coupon on or after the respective 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 for any series of Securities, 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 by the Currency Determination
Agent at the Market Exchange Rate as in effect on the date of entry of the
judgment (the "Judgment Date"). If pursuant to any such judgment, conversion
shall be made on a date (the "Substitute Date") other than the Judgment Date and
there shall occur a change between the
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Market Exchange Rate as in effect on the Judgment Date and the Market Exchange
Rate as in effect on the Substitute Date, 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 Market Exchange Rate as in effect on the Judgment Date, is the
amount 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 Market Exchange Rate as in
effect on the Judgment Date 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 on the
Substitute Date over the amount due and payable on the Judgment Date.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with respect to the
Securities of any series for which the Trustee is serving as such,
(1) such 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 such Trustee; and
(2) in the absence of bad faith on its part, such 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 such Trustee
and conforming to the requirements of this Indenture; but in the case of any
such certificates or opinions which by any provisions hereof are specifically
required to be furnished to such Trustee, such 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 with respect to a series of Securities has
occurred and is continuing, the Trustee for the Securities of such series shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee
for Securities of any series from liability for its own grossly negligent
action, its own grossly negligent failure to act, or its own willful misconduct,
except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) such 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;
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(3) such Trustee shall not be liable with respect to any action taken,
suffered 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 particular series, determined as provided in Section 512,
relating to the time, method and place of conducting any proceeding for any
remedy available to such Trustee, or exercising any trust or power conferred
upon such Trustee, under this Indenture with respect to the Securities of
that series; and
(4) no provision of this Indenture shall require the Trustee for any series
of Securities to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee for any series of Securities 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
Securities of any particular series, the Trustee for the Securities of such
series shall give to Holders of Securities of that series, in the manner set
forth in Section 106, notice of such default known to such 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 that series, or in the deposit of any
sinking fund payment with respect to Securities of that series, such 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 and/or
Responsible Officers of such Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
that series and related coupons; and provided, further, that in the case of any
default of the character specified in Section 501(3) with respect to Securities
of that series no such notice to Holders shall be given until at least 60 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of that series.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee for any series of Security may rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, discretion, consent,
order, bond, debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture such Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, such Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
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(d) such Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) such Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any
of the Holders of Securities of any series pursuant to this Indenture for
which it is acting as Trustee, unless such Holders shall have offered to such
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) such 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, discretion, consent, order,
bond, debenture or other paper or document, but such Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters at it may see fit, and, if such Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney; and
(g) such 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 such Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication thereof, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee for any series of Securities,
nor any Authenticating Agent assumes any responsibility for their correctness.
The Trustee for any series of Securities makes no representations as to the
validity or sufficiency of this Indenture or of the Securities of any series or
coupons. Neither the Trustee for any series of Securities nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee for any series of Securities, any Authenticating Agent, Paying
Agent, Security Registrar or any other agent of the Company or such Trustee, 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 such Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee for any series of Securities in trust hereunder
need not be segregated from other funds except as provided in Section 115 and
except to the extent required by law. The Trustee for any series of Securities
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
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SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee for any series of Securities from time to time
reasonable compensation in Dollars for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee
for any series of Securities in Dollars upon its request for all reasonable
expenses, disbursements and advances incurred or made by such 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 gross negligence or bad faith; and
(3) to indemnify such Trustee and its agents in Dollars for, and to hold
them harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of this trust, including the costs and
expenses of defending themselves against any claim or liability in connection
with the exercise or performance of any of their powers or duties hereunder.
As security for the performance of the obligations of the Company under this
Section the Trustee for any series of Securities shall have a lien prior to the
Securities upon all property and funds held or collected by such Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any) or interest, if any, on particular Securities.
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; Different Trustees for Different
Series; Eligibility.
There shall at all times be a Trustee hereunder which shall be
(i) 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, and subject to
supervision or examination by Federal or State authority, or
(ii) a corporation or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation, or other order of the Commission, authorized under such
laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustee,
having a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law or
to requirements of the aforesaid 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
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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 the common control with the Company shall
serve as Trustee for the Securities. If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereunder specified in this
Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee for the Securities of any series
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 for the Securities of any series may resign at any time with
respect to the Securities of such 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 for the Securities of
such series 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 for the Securities of any series may be removed at any time
with respect to the Securities of such series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series,
delivered to such Trustee and to the Company.
(d) If at any time:
(1) the Trustee for the Securities of any series shall fail to comply with
Section 310(b) of the Trust Indenture Act pursuant to Section 608 hereof
after written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security of such series for at least six months, unless
the Trustee's duty to resign is stayed in accordance with the provisions of
Section 310(b) of the Trust Indenture Act, or
(2) such 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) such Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of such Trustee or of its property shall
be appointed or any public officer shall take charge or control of such
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 such
Trustee or (ii) subject to Section 514, 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 removal of such Trustee and the appointment of a successor
Trustee.
(e) If the Trustee for the Securities of any series shall resign, be removed
or become incapable of acting, or if a vacancy shall occur in the office of
Trustee for the Securities of any series for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of such 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 such 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 for the Securities of such series and supersede the successor Trustee
appointed by the Company.
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45
If no successor Trustee for the Securities of such series shall have been so
appointed by the Company or the Holders and shall have accepted appointment in
the manner required by Section 611, and if such Trustee is still incapable of
acting, 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 that series and the
address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) Every such successor Trustee appointed hereunder with respect to the
Securities of any series shall execute, acknowledge and deliver to the Company
and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (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.
(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
Subsections (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 for the Securities of any series shall be
qualified and eligible under this Article.
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46
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee for the Securities of any series 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 Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of such Trustee, shall be the successor of such
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 the
Authenticating Agent for such series then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee or Authenticating
Agent, as the case may be, 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 for the
Securities of any series 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, such Trustee shall
set apart and hold in a special account for the benefit of such Trustee
individually, the Holders of the Securities of any such series and any coupons
appertaining thereto 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 of setoff which such 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 such Trustee in respect of any claim as such
creditor, either as security therefor, or in satisfaction or composition
thereof, or otherwise, after the beginning of such three months' period, or
an 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 such 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 such 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 Title 11 of the
United States Code 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 such Trustee shall sustain the burden of
proving that at the time such property was so received such
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47
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.
For the purpose 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 pre-existing
claim of such Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If such Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between such
Trustee, the Holders of the Securities of such series and the holders of other
indenture securities in such manner that such Trustee, such 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
Title 11 of the United States Code or applicable State law, the same percentage
of their respective claims figured before crediting to the claim of such 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 such Trustee and the Holders of the Securities of such series 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
Title 11 of the United States Code 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 Title 11 of the United States Code 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 between such Trustee and the Holders of the
Securities of such series and 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 such Trustee and the
Holders of the Securities of such series 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 otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee which has resigned or been removed with respect to the Securities
of any series 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 so 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 for the Securities of such series, occurred after the beginning of
such three months' period; and
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(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 such 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 of the Securities of the
applicable series 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, escrow agent, 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, which is directly or indirectly a creditor of the Company; or
(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 of the applicable
series or upon the other indenture securities when and as such principal or
interest becomes due and payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture or under
this Indenture with respect to the Securities of any other series (i) under
which such 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, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which
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49
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 such 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.
SECTION 614. Authenticating Agents.
From time to time the Trustee for the Securities of any series may, subject
to its sole discretion, appoint one or more Authenticating Agents with respect
to the Securities of such series, which may include the Company or any Affiliate
of the Company, with power to act on the Trustee's behalf and subject to its
discretion in the authentication and delivery of Securities of such series in
connection with transfers and exchanges under Sections 304, 305 and 1107 as
fully to all intents and purposes as though such Authenticating Agent had been
expressly authorized by those Sections of this Indenture to authenticate and
deliver Securities of such series. For all purposes of this Indenture, the
authentication and delivery of Securities of such series by an Authenticating
Agent for such Securities pursuant to this Section shall be deemed to be
authentication and delivery of such Securities "by the Trustee" for the
Securities of such series. Any such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States or
of any State, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually pursuant to law or the
requirements of such supervising or examining authority, then for the purposes
of this Section the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent for any
series of Securities 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 any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or the Authenticating Agent or such successor
corporation.
Any Authenticating Agent for any series of Securities may resign at any
time by giving written notice of resignation to the Trustee for such series and
to the Company. The Trustee for any series of Securities may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company in the manner set
forth in Section 105. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent for any series of
Securities shall cease to be eligible under this Section, the Trustee for such
series may appoint a successor Authenticating Agent, shall give written notice
of such appointment to the Company and shall give written notice of such
appointment to all Holders of Securities of such series in the manner set forth
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 Trustee for the Securities of each series agrees to pay to any
Authenticating Agent for such series from time to time reasonable compensation
for its services, and such Trustee shall be entitled to be reimbursed for such
payments, subject to Section 607.
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50
If an appointment with respect to one or more series of Securities is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certification of authentication, an
alternate certificate of authentication in the following form:
"This is one of the Securities of the series designated therein described
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By.............................................
As Authenticating Agent
By.............................................
Authorized Officer"
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
With respect to each particular series of Securities, the Company will
furnish or cause to be furnished to the Trustee for the Securities of such
series,
(a) semiannually, not more than 15 days after each Regular Record Date
relating to that series (or, if there is no Regular Record Date relating to
that series, on June 30 and December 31), a list, in such form as 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 that series as
of such dates,
(b) on semi-annual dates on each year to be determined pursuant to Section
301 if the Securities of such series do not bear interest, a list of similar
form and content, and
(c) at such other times as such Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such
list is furnished,
excluding from any such list names and addresses received by such Trustee in its
capacity as Security Registrar for the Securities of such series, if so acting.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee for each series of Securities shall preserve, in as current
a form as is reasonably practicable, the names and addresses of Holders of the
Securities of such series contained in the most recent lists furnished to such
Trustee as provided in Section 701 and the names and addresses of Holders of the
Securities of such series received by such Trustee in its capacity as Security
Registrar for such series, if so acting. The Trustee
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51
for each series of Securities may destroy any list relating to such series of
Securities furnished to it as provided in Section 701 upon receipt of a new list
relating to such series so furnished.
(b) If three or more Holders of Securities of any particular series
(hereinafter referred to as "applicants") apply in writing to the Trustee for
the Securities of any such series, and furnish to such Trustee reasonable proof
that each such applicant has owned a Security of that 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
Securities of that series with respect to their rights under this Indenture or
under the Securities of that series and is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then
such Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at
the time by such Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders
of Securities of that series whose names and addresses appear in the
information preserved at the time by such Trustee in accordance with Section
702(a), and as to the approximate cost of mailing to such Holders the form of
proxy or other communication, if any, specified in such application.
If any such Trustee shall elect not to afford such applicants access to that
information, such Trustee shall, upon the written request of such applicants,
mail to each Holder of Securities of that series whose name and address appears
in the information preserved at the time by such 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 such
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, such 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 such Trustee, such mailing would
be contrary to the best interests of the Holders of Securities of that series 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, such 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 such Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities of each series or coupons, by receiving and
holding the same, agrees with the Company and the Trustee for the Securities of
such series that neither the Company nor such 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 of the Securities of
such series in accordance with Section 702(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after March 15 of each year commencing with the year
following the first issuance of Securities, the Trustee for the Securities of
each series shall transmit by mail to all Holders of the Securities of such
series, as provided in subsection (c) of this Section a brief report dated as of
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):
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(1) any change to its eligibility under Section 609 and its qualifications
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 such Trustee elects
so to state, the circumstances surrounding the making thereof) made by such
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 such series, on any property or funds held or collected
by it as Trustee, except that such 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 of such
series 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 upon the Securities of such
series) to such 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) the property and funds, if any, physically in the possession of such
Trustee as such on the date of such report;
(6) any additional issue of Securities of such series which such Trustee
has not previously reported; and
(7) any action taken by such Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities of such series, except action in respect of
a default, notice of which has been or is to be withheld by such Trustee in
accordance with Section 602.
(b) The Trustee for each series of Securities shall transmit by mail to
all Holders of Securities of such series, as provided in subsection (c) of this
Section, a brief report with respect to the character and amount of any advances
(and if such Trustee elects so to state, the circumstances surrounding the
making thereof) made by such 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 such 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 Bearer Securities as have, within the two years
preceding such transmission, filed their names and addresses with the Trustee
for such series of Bearer Securities for that purpose; and
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53
(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 such Trustee, as provided in Section 702(a).
(d) A copy of each such report shall, at the time of such transmission to
Holders of Securities of any series, be filed by the Trustee for the Securities
of such series with each securities exchange upon which the Securities of such
series are listed and also with the Commission. The Company will notify such
Trustee when such series of Securities is listed on any securities exchange.
SECTION 704. Reports by Company.
The Company will:
(1) file with the Trustee for the Securities of such series, within 15
days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the Company
may be required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of said
Sections, then it will file with such 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 in such rules and
regulations;
(2) file with the Trustee for the Securities of such series and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such additional information, documents, and reports
with respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to all Holders of Securities of each series, as
provided in Section 703(c), within 30 days after the filing thereof with the
Trustee for the Securities of such series, 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.
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to any
Person unless:
(1) the corporation formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer 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 for each series of
Securities, in form satisfactory to each such 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
<PAGE>
54
pursuant to Sections 516 or 1010) 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, no Event of
Default with respect to any series of Securities, and no event which, after
notice or lapse of time, or both, would become an Event of Default with respect
to any series of Securities, shall have happened and be continuing;
(3) 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
individuals who are not citizens or residents of the United States at the time
of their death; and
(4) the Company has delivered to the Trustee for each series of Securities
an Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental indenture
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation or merger, or any conveyance or transfer 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 or transfer 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 the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture, the Securities and any related coupons and, in the event of any such
consolidation, merger, conveyance or transfer, the Company as the predecessor
corporation may thereupon or at any time thereafter be dissolved, wound up, or
liquidated.
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 for the Securities of any
or all series, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to such Trustee, for any of
the following purposes:
(1) to evidence the succession of another corporation to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or
(2) to add to the covenants of the Company, for the benefit of the Holders
of all or any particular series of Securities and any related coupons (and,
if such covenants are to be for the benefit of fewer than all series of
Securities, stating that such covenants are 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 with respect to any or all
series of Securities (and, if any such Event of Default applies to fewer than
all series of Securities, stating each series to which such Event of Default
applies); or
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55
(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, however, 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, however, 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 evidence and provide for the acceptance of appointment hereunder of
a Trustee other than Chemical Bank as Trustee for a series of Securities and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
609; or
(7) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
611(b); or
(8) to add to the conditions, limitations and restrictions on the
authorized amount, form, terms or purposes of issue, authentication and
delivery of Securities, as herein set forth, other conditions, limitations
and restrictions thereafter to be observed; or
(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; provided, however, 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; or
(11) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, to convey,
transfer, assign, mortgage or pledge any property to or with the Trustee for
the Securities of any series or to surrender any right or power herein
conferred upon the Company, 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
particular series in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee for the
Securities of any or all series 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 such Securities and any
related coupons under this Indenture, but only with the consent of the Holders
of more than 50% in aggregate principal amount of the Outstanding Securities of
each series of Securities then Outstanding affected thereby, in each case by Act
of said Holders of Securities of each such series
<PAGE>
56
delivered to the Company and the Trustee for Securities of each such series;
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, if any, or any premium payable upon
the redemption thereof, or change any obligation of the Company to pay
additional amounts pursuant to Section 1011 (except as contemplated by
Section 801(1) and permitted by Section 901(1)) or reduce the amount of the
principal of a Discounted Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502,
or change the Place of Payment, or the currency or currency unit in which any
Security or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date); or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any particular 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
(3) modify any of the provisions of this Section or Section 513 or 1009,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each 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 1009, or the deletion of this
proviso, in accordance with the requirements of Sections 609, 61l(b), 901(6)
and 901(7).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee for any series of Securities shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee for any series of Securities may, but shall not be obligated to, enter
into any such supplemental indenture which affects such Trustee's own rights,
liabilities, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining thereto shall be bound thereby.
<PAGE>
57
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 particular series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee for the Securities of such series, bear a notation in
form approved by such 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 for
the Securities of such series and the Board of Directors, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by such Trustee in exchange for Outstanding
Securities of such series and any related coupons.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal (and Premium, if any) and Interest, if any.
The Company agrees, for the benefit of each particular 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), 311(d) and 311(e)) the principal of (and premium, if any)
and interest, if any, on that series of Securities in accordance with the terms
of the Securities of such series, 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 1011, only upon
presentation of such Security to the Trustee thereof 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 that series an office or
agency where Securities of that series may be presented or surrendered for
payment, an office or agency where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company with respect to 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) an office or agency in a Place of
Payment for that series in the United States where any Registered Securities of
that series may be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange, where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served and where Bearer Securities of that series and
related coupons may be presented or surrendered for payment in the circumstances
described in the following paragraph (and not otherwise), (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or
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58
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 for the Securities of that series 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 for the
Securities of that series with the address thereof, such presentations (to the
extent permitted by law), 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 such 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 (and premium, if any) or interest, if any, 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. Payments will
not be made in respect of Bearer Securities or coupons appertaining thereto
pursuant to presentation to the Company or its designated Paying Agents within
the United States. Notwithstanding the foregoing, payment of principal of (and
premium, if any) and interest, if any, on any Bearer Security denominated and
payable in Dollars will be made at the office of the Company's Paying Agent in
the United States, 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 that purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions and the Company has delivered to the
Trustee an Opinion of Counsel to that effect.
The Company may also from time to time designate one or more other offices or
agencies (in or outside the Place of Payment) where the Securities of one or
more series may be presented or surrendered for any or all of the purposes
specified above in this Section and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for such purpose. The Company will give prompt written
notice to the Trustee for the Securities of each series so affected of any such
designation or rescission and of any change in the location of any such 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 the
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 particular 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), 311(d)
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59
and 311(e)) sufficient to pay the principal (and premium, if any) and 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
for the Securities of such series of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any particular
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 such
Securities, deposit with a Paying Agent for the Securities of such series a sum
(in the currency or currency unit described in the preceding paragraph)
sufficient to pay the principal (and premium, if any) and interest, if any, so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto, and (unless such Paying Agent is the Trustee for the
Securities of such series) the Company will promptly notify such Trustee of its
action or failure so to act.
The Company will cause each Paying Agent for any particular series of
Securities other than the Trustee for the Securities of such series to execute
and deliver to such Trustee an instrument in which such Paying Agent shall agree
with such 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 such Trustee notice of any default by the Company (or any other
obliger upon the Securities) in the making of any payment of principal (or
premium, if any) and interest, if any, on Securities of that series; and
(3) at any time during the continuation of any such default, upon the
written request of such Trustee, forthwith pay to such 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 for the Securities of any
series all sums held in trust by the Company or such Paying Agent, such sums to
be held by such 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 such Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee for the Securities of any series or any
Paying Agent, or then held by the Company, in trust for the payment of the
principal of (and premium, if any) and interest, if any, on any Security of any
particular series and remaining unclaimed for two years after such principal
(and premium, if any) and interest, if any, has become due and payable shall,
unless otherwise required by mandatory provisions of applicable escheat, or
abandoned or unclaimed property law, be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from such trusts; and the
Holder of such Security shall, thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of such 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 such
Trustee or such Paying Agent, before being required to make any such repayment
may give written notice to the Holder of such Security in the manner set forth
in Section 106, or may, in its discretion, in the name and at the expense of the
Company, cause to be published at least once in a newspaper published in the
English language, customarily on each Business Day and of general circulation in
New York, New York 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,
unless otherwise required by mandatory provisions of applicable escheat, or
abandoned or unclaimed property law, be repaid to the Company.
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SECTION 1004. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon it or upon its income, profits or property, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon its property; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 1005. Statements as to Compliance.
The Company will deliver to the Trustee for each series of Securities, within
120 days after the end of each fiscal year, a written statement signed by the
principal executive officer, principal financial officer or principal accounting
officer of the Company stating that:
(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision; and
(2) to the best of his knowledge, based on such review, the Company is
in compliance with all conditions and covenants under this Indenture.
For purposes of this Section, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 1006. 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 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 1007. Limitations on Liens.
(a) Except as expressly provided in Subsection (b) of this Section 1007,
the Company will not, and will not permit any Subsidiary to, directly or
indirectly, create, assume, incur or suffer to be created, assumed or incurred,
any mortgage, lien, charge or encumbrance on, or conditional sale or other title
retention agreement (all of the foregoing being hereinafter referred to as
"liens") (i) upon any shares of stock issued by any Subsidiary, or (ii) upon any
manufacturing plant or facility owned and operated by the Company or any
Subsidiary which is determined to be a materially important manufacturing plant
or facility by the Board of Directors in its discretion (a "Principal
Facility"), without making effective provision whereby all the Securities shall
be directly secured equally and ratably with the indebtedness or other
obligations secured by such lien, so long as any such indebtedness or other
obligations shall be so secured; provided, however, that the foregoing covenants
shall not be applicable to the following:
(1) liens for taxes, assessments or governmental charges or levies not yet
delinquent or being contested in good faith by appropriate proceedings
diligently conducted, if such reserve or other appropriate provision, if any,
as shall be required by generally accepted accounting principles shall have
been made therefor;
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(2) in the case of a Principal Facility, liens of landlords and liens of
mechanics and materialmen incurred in the ordinary course of business for
sums not yet due or being contested in good faith by appropriate proceedings
diligently conducted, if such reserve or other appropriate provision, if any,
as shall be required by generally accepted accounting principles, shall have
been made therefor;
(3) liens incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance and other types of social
security, or to secure the performance of or compliance with statutory
obligations, excise tax laws, and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(4) any judgment lien, unless the judgment it secures shall not, within 60
days after the entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall not have been discharged within 60 days after
the expiration of any such stay;
(5) in the case of a Principal Facility, leases or subleases granted to
others in the ordinary course of business;
(6) in the case of a Principal Facility, easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course
of business and not interfering with the ordinary conduct of the business of
the Company;
(7) in the case of a Principal Facility, liens incurred in connection with
the issuance by a state or political subdivision thereof of any securities
the interest on which is exempt from federal income taxes by virtue of
Section 103 of the Code or any other laws or regulations in effect at the
time of such issuance;
(8) liens securing indebtedness owed by a Subsidiary to the Company or
another Subsidiary;
(9) liens on property or shares of stock existing when acquired (including
merger and consolidation) or securing the payment of all or part of the
purchase price, construction or improvement thereof incurred prior to, at the
time of, or within 120 days after the later of the acquisition, completion of
construction or commencement of full operation of such property or within 120
days after the acquisition of such shares for the purpose of financing all or
a portion of such purchase thereof or construction thereon; or
(10) liens for the sole purpose of extending, renewing or replacing in
whole or in part the indebtedness secured by any lien referred to in the
foregoing clauses (1) through (9) or in this clause (10); provided, however,
that the principal amount of indebtedness secured thereby shall not exceed
the principal amount of indebtedness so secured at the time of such
extension, renewal or replacement, and that such extension, renewal or
replacement shall be limited to all or a part of the property which secured
the lien so extended, renewed or replaced (plus improvements on such
property).
(b) The Company and/or any Subsidiary may create, assume or incur, or
suffer to be created, assumed or incurred, liens which would otherwise be
prohibited by Subsection (a) of this Section 1007, provided that the
indebtedness secured thereby plus the aggregate value of the Sale and Leaseback
Transactions permitted by the provisions of Subsection (b) of Section 1008 does
not at the time exceed 10% of Consolidated Net Tangible Assets.
(c) Within 15 days of its adoption, the Company will deliver to the Trustee
for each series of Securities any Board Resolution evidencing the determination
of a Principal Facility.
(d) The Certificate of a Firm of Independent Public Accountants shall be
conclusive evidence as to the amount, at the date specified in such Certificate,
of Consolidated Net Tangible Assets.
SECTION 1008. Sale and Leaseback Transactions.
(a) Neither the Company nor any Subsidiary will sell or transfer a
Principal Facility with the intention of taking back a lease of such property,
except a lease for a temporary period with the intent that the use by the
Company or a Subsidiary will be discontinued on or before the expiration of such
period (any transaction subject
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to the provisions of this Section 1008 being herein referred to as a "Sale and
Leaseback Transaction") unless the Company shall apply an amount equal to the
value of the property so leased to the retirement (other than any mandatory
retirement), within 90 days of the effective date of any such arrangement, of
non-subordinated indebtedness for money borrowed by the Company which had a
stated maturity of more than one year from the date of its creation.
(b) The Company or a Subsidiary may enter into a Sale and Leaseback
Transaction which would otherwise be prohibited by Subsection (a) of this
Section 1008, provided that the value thereof plus the aggregate indebtedness
permitted to be secured under the provisions of Subsection (b) of Section 1007
do not at the time exceed 10% of Consolidated Net Tangible Assets.
(c) The term "value" shall, for the purpose of this Section 1008 and Section
1007(b), mean, with respect to a Sale and Leaseback Transaction, as of any
particular time, the amount equal to the greater of (i) the net proceeds of the
sale of the property leased pursuant to such Sale and Leaseback Transaction or
(ii) the fair value of such property at the time of entering into such Sale and
Leaseback Transaction, as determined by the Board of Directors, in each such
case divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination, without regard to any renewal or extension options contained in
the lease.
(d) The Certificate of a Firm of Independent Public Accountants shall be
conclusive evidence as to the amount, at the date specified in such Certificate,
of Consolidated Net Tangible Assets.
SECTION 1009. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant
or condition set forth in Sections 1004 to 1008, inclusive, if before or after
the time for such compliance the Holders of more than 50% in principal amount of
the Outstanding Securities of each series of Securities affected by the omission
shall, in each case by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee for the Securities of
each series with respect to any such covenant or condition shall remain in full
force and effect.
SECTION 1010. Defeasance of Certain Obligations.
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 1007, Section 1008 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 1010, 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 of
such series for cancellation:
(i) the Company has deposited or caused to be deposited with such
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), 311(d) and 311(e),
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
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Conversion Event has occurred as provided in Sections 311(d) and
311(e), 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
(ii) the Company has deposited or caused to be deposited with
such Trustee as obligations in trust such amount of Government
Obligations as will, as evidenced by a Certificate of a Firm of
Independent Public Accountants delivered to such 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
such Trustee in trust an amount equal to the amount referred to in
clause (i) or (ii) in any combination of currency or currency unit or
Government Obligations;
(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 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.
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
1007, Section 1008 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 1010, shall remain in full force and effect.
Anything in this Section 1010 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 1010 which, as expressed in a Certificate of a
Firm of Independent Public Accountants delivered to such 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, provided such delivery can be made without liquidating
any Government Obligations.
SECTION 1011. Payment of Additional Amounts.
If specified pursuant to Section 301, the provisions of this Section 1011
shall be applicable to Securities of any series.
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The Company will, subject to the exceptions and limitations set forth below,
pay to the Holder of any Security or coupon who is a United States Alien such
additional amounts as may be necessary so that every net payment on such
Security or coupon, after deduction or withholding by the Company or any of its
Paying Agents for or on account of any present or future tax, assessment or
other governmental charge imposed upon or as a result of such payment by the
United States (or any political subdivision or taxing authority thereof or
therein), will not be less than the amount provided in such Security or in such
coupon to be then due and payable. However, the Company will not be required to
make any payment of additional amounts for or on account of:
(a) any tax, assessment or other governmental charge that would not have
been so imposed but for (i) the existence of any present or former connection
between such Holder (or between a fiduciary, settler or beneficiary of, or a
person holding a power over, such Holder, if such Holder is an estate or
trust, or a member or shareholder of such Holder, if such Holder is a
partnership or corporation) and the United States, including, without
limitation, such Holder (or such fiduciary, settler, beneficiary, person
holding a power, member or shareholder) being or having been a citizen,
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) such Holder's present or former status as a
personal holding company, foreign personal holding company, controlled
foreign corporation or passive foreign investment company with respect to the
United States or as a corporation that accumulates earnings to avoid United
States federal income tax;
(b) any tax, assessment or other governmental charge which would not have
been so imposed but for the presentation by the Holder of such Security or
coupon for payment on a date more than 10 days after the date on which such
payment became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal property tax
or any similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment in respect of any Security or
coupon, if such payment can be made without such withholding by at least one
other Paying Agent;
(e) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments in respect of such Security or
coupon;
(f) any tax, assessment or other governmental charge imposed on a Holder of
a Security or coupon that actually or constructively owns 10 percent 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 or that
is a controlled foreign corporation related to the Company through stock
ownership;
(g) any tax, assessment or other governmental charge imposed as a result of
the failure to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Holder or
beneficial owner of a Security or coupon, if such compliance is required by
statute or by regulation of the United States, as a precondition to relief or
exemption from such tax, assessment or other governmental charge;
(h) any tax, assessment or other governmental charge imposed with respect
to payments on any Registered Security by reason of the failure of the Holder
to fulfill the statement requirement of Sections 871(h) or 881(c) of the
Code; or
(i) any combination of items (a), (b), (c), (d), (e), (f), (g) and (h);
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nor will additional amounts be paid with respect to any payment on any such
Security or coupon to a Holder who is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent such payment would be
required by the laws of the United States (or any political subdivision thereof)
to be included in the income for federal income tax purposes of a beneficiary or
settler with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to payment of the additional
amounts had beneficiary, settler, member or beneficial owner been the Holder of
such Security or coupon.
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 (and premium, if any) and interest, if any, 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.
If the Securities of a series provide for the payment of additional amounts
as contemplated by Section 301(20), at least 10 days prior to the first Interest
Payment Date with respect to that series of Securities (or if the Securities of
that series will not bear interest prior to maturity, the first day on which a
payment of principal and any premium is made), and at least 10 days prior to
each date of payment of principal (and premium, if any) and interest, if any, if
there has been any change with respect to the matters set forth in the below
mentioned Officers' Certificate, the Company will furnish the Trustee for that
series of Securities and the Company's principal Paying Agent or Paying Agents,
if other than such Trustee, with an Officers' Certificate instructing such
Trustee and such Paying Agent or Paying Agents whether such payment of principal
of (and premium, if any) and interest, if any, on the Securities of that series
shall be made to Holders of Securities of that series or any related coupons who
are United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge referred to above or described in the
Securities of that series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities or coupons and the
Company will pay to the Trustee for such series of Securities or such Paying
Agent such additional amounts as may be required pursuant to the terms
applicable to such series. The Company covenants to indemnify the Trustee for
such series of Securities and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without gross
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section 1011.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Applicability of This Article.
Redemption of Securities of any series (whether by operation of a sinking
fund or otherwise) as permitted or required by any form of Security issued
pursuant to this Indenture shall be made in accordance with such form of
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Security and this Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities of any series shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company of less than all of the Securities of any particular
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 for
the Securities of such series) notify such Trustee by Company Request of such
Redemption Date and of the principal amount of Securities of that series to be
redeemed and shall deliver to such Trustee such documentation and records as
shall enable such Trustee to select the Securities to be redeemed pursuant to
Section 1103. In the case of any redemption of Securities of any series 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 for Securities of such series with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the Company may select
the series to be redeemed, and if less than all the Securities of any series are
to be redeemed, the particular Securities of that series to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee for
the Securities of such series, from the Outstanding Securities of that series
not previously called for redemption, by such method as such Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series, or any integral multiple thereof) of the principal amount of Securities
of that 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 Trustee for the Securities of any series to be redeemed shall promptly
notify the Company in writing of the Securities of such series selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106 not
later than the thirtieth day and not earlier than the sixtieth day prior to the
Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of a particular series are to
be redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the particular Securities to be redeemed,
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(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after said date,
(5) the place or places where such Securities, together in the case of
Bearer Securities with all coupons appertaining thereto, if any, maturing
after the Redemption Date are to be surrendered for payment of the Redemption
Price,
(6) that the redemption is for a sinking fund, if such is the case,
(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
or security or indemnity satisfactory to the Company, the Trustee for such
series and any Paying Agent is furnished, 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, as determined by the Company, 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 for such Securities in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to the opening of business on any Redemption Date, the Company shall
deposit with the Trustee for the Securities to be redeemed or with a Paying
Agent for such Securities (or, if the Company is acting as its own Paying Agent
for such Securities, 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), 311(d)
and 311(e)) sufficient to pay the principal amount of (and premium, if any,
thereon), and (except if the Redemption Date shall be an Interest Payment Date)
any accrued interest on, all the Securities which are to be redeemed on that
date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified in the currency or currency unit in which the Securities
of such series are payable (except as otherwise provided pursuant to Section 301
for the Securities of such series and except as provided in Sections 311(b),
311(d) and 311(e)) and from and after such date (unless the Company shall
default in the payment of the Redemption Price) such Securities shall cease to
bear interest and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of 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; 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
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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 the
Company, the Trustee for such Security and any Paying Agent such security or
indemnity as they may require to save the Company, such Trustee and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
such Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency located
outside the United States (except as otherwise provided in Section 1002) and,
unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof (and premium, if any, thereon)
shall, until paid, bear interest from the Redemption Date at a rate per annum
equal to the rate borne by the Security (or, in the case of Discounted
Securities, the Security's Yield to Maturity).
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at the Place of Payment (with, if the Company or the Trustee for
such Security so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Security Registrar for such
Security duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute and such Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Registered
Security or Securities, of any authorized denomination as requested by such
Holder, of the same series and having the same terms and provisions and in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Registered Security so surrendered.
SECTION 1108. 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 (A) as a result of any change in or amendment to the laws (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 change in official position regarding application or
interpretation of such laws, regulations or rulings (including a holding by a
court of competent jurisdiction in the United States), which change or amendment
is announced or becomes effective on or after a date specified in Section 301
with respect to any Security of such series, the Company has or will become
obligated to pay additional amounts pursuant to Section 1011 with respect to any
Security of such series or (B) on or after a date specified in Section 301 with
respect to any Security of such series, any action has been taken by any taxing
authority of, or any decision has been rendered by a court of competent
jurisdiction in, the United States or any political subdivision or taxing
authority thereof or therein, including any of those actions specified in (A)
above, whether or not such action was taken or decision was rendered with
respect to the Company, or any change, amendment, application or interpretation
shall be officially proposed, which, in any such case, in the Opinion of Counsel
to the Company will result in a material probability that the Company will
become obligated to pay additional amounts with respect to any Security of such
series, and (C) in any such case specified in (A) or (B) above the Company, in
its business judgment, determines that such obligation cannot be avoided by the
use of reasonable measures available to the Company.
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(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 of principal or interest due in respect of any Bearer
Security (an "Affected Security") of such series or any coupon appertaining
thereto would, under any present or future laws or regulations of the United
States, be subject to any certification, 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 (as distinguished from, for example, status as a United
States Alien) of a beneficial owner of such Affected Security of such series or
coupon that is a United States Alien (other than such a requirement that (i)
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, (ii) can be satisfied by such
custodian, nominee or other agent certifying to the effect that such beneficial
owner is a United States Alien; provided that, in each case referred to in
clauses (i)(B) or (ii), payment by such custodian, nominee or other agent to
such beneficial owner is not otherwise subject to any such requirement (other
than a requirement which is imposed on a custodian, nominee or other agent
described in item (iv) of this sentence), (iii) would not be applicable to a
payment made by at least one other Paying Agent of the Company or (iv) is
applicable to a payment to a custodian, nominee or other agent of the beneficial
owner of such Security who is a United States person (as hereinafter defined), a
controlled foreign corporation for United States tax purposes, a foreign person
50 percent or more of the gross income of which for the three-year period ending
with the close of its taxable year preceding the year of payment is effectively
connected with a United States trade or business, or is otherwise related to the
United States), the Company shall elect by notice to the Trustee for such series
of Securities either (x) to redeem the Affected Securities of such series, as a
whole, at a redemption price equal to the principal amount thereof, together
with interest accrued to the date fixed for redemption, 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 and
election as soon as practicable and give prompt notice thereof (the
"Determination Notice") in the manner described in Section 106 stating the
effective date of such certification, information or reporting requirement,
whether the Company has elected to redeem the Affected Securities of such series
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
of such series must take place, as provided in the next succeeding sentence. If
the Company elects to redeem the Affected Securities of such series, such
redemption shall take place on such date, not later than one year after the
giving of the Determination Notice, as the Company shall specify by notice to
such Trustee given not less than 45 nor more than 75 days before the Redemption
Date. Notice of such redemption of the Affected Securities of such series shall
be given to the Holders thereof not less than 30 days nor more than 60 days
prior to the Redemption Date. Notwithstanding the foregoing, the Company shall
not so redeem the Affected Securities of such series if the Company shall
subsequently determine by notice to the Trustee, not less than 30 days prior to
the Redemption Date, that subsequent payments on the Affected Securities of such
series would not be subject to any such certification, information or other
reporting requirement, in which case the Company shall give prompt notice of
such subsequent determination in the manner specified in Section 106 and any
earlier redemption notice shall be revoked and be of no further effect. The
right of the Holders of Affected Securities called for redemption to exchange
such Affected Securities for Registered Securities (which Registered Securities
will remain Outstanding following such redemption) will terminate on the
fifteenth day prior to the Redemption Date, and no further exchanges of Affected
Securities for Registered Securities shall be permitted unless the Company shall
have made the subsequent determination and given the notice referred to in the
preceding sentence. As used hereinabove, "United States person" means any
citizen or resident of the United States, any corporation, partnership or other
entity created or organized in or under the laws of the United States and any
estate or trust the income of which is subject to United States federal income
taxation regardless of its source.
If and so long as the certification, information or other reporting
requirement referred to in the preceding paragraph would be fully satisfied by
payment of a withholding tax, backup withholding tax or similar charge, the
Company may elect by notice to the Trustee 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
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70
of its Paying Agents of principal (or premium, if any) or interest, if any, due
in respect of any Affected Security of such series or any coupon appertaining
thereto to a Holder who certifies that 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 withholding tax, backup withholding tax or similar charge (other than a
withholding tax, backup withholding tax or similar charge that (i) is the result
of a certification, information or other reporting requirement described in the
third parenthetical clause of the first sentence of the preceding paragraph or
(ii) is imposed as a result of presentation of any such Affected Security or
such coupon for payment more than 10 days after the date on which such payment
becomes due and payable or on which payment thereof was duly provided for,
whichever occurs later), will not be less than the amount provided in such
Affected Security or such coupon to be then due and payable. In the event the
Company elects to pay such additional amounts, (the Company's election to
exercise such right to be evidenced by prompt notice to the Trustee for the
Securities of the appropriate series), the Company will have the right, at its
sole option, at any time, to redeem the Affected Securities of such series as a
whole, but not in part, at the Redemption Price, subject to the provisions of
the last four sentences of the immediately preceding paragraph. If the Company
has made the determination described in the preceding paragraph with respect to
certification, 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 of such
series 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 of such series are to be redeemed, the
Company shall have no obligation to pay additional amounts pursuant to this
paragraph with respect to principal (or premium, if any) or interest accrued and
unpaid after the date of the notice of such determination indicating such
redemption, but will be obligated to pay such additional amounts with respect to
interest accrued and unpaid to the date of such determination. 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 promptly redeem the Affected Securities of such series in
whole, but not in part, at the Redemption Price subject to the provisions of the
last four sentences of the immediately preceding paragraph. If the Company
elects to, or is required to, redeem the Affected Securities of such series
pursuant to this paragraph, it shall publish in the manner and to the extent
provided in Section 106 prompt notice thereof. If the Affected Securities of
such series 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 for such
series of Securities 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.
ARTICLE TWELVE
Sinking Funds
SECTION 1201. Applicability of This Article.
Redemption of Securities through operation of a sinking fund as permitted or
required by any form of Security issued pursuant to this Indenture shall be made
in accordance with such form of Security and this Article; provided, however,
that if any provision of any such form of Security shall conflict with any
provision of this Article, the provision of such form of Security shall govern.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any particular series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum
<PAGE>
71
amount provided for by the terms of Securities of any particular series is
herein referred to as an "optional sinking fund payment". If provided for by
the terms of Securities of any particular 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
particular series as provided for by the terms of Securities of that series.
SECTION 1202. Satisfaction of Sinking Fund Payments With Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities as provided for by the terms
of such series; provided, however, that such Securities have not been previously
so credited. Such Securities shall be received and credited for such purpose by
the Trustee for such Securities at the principal amount thereof and the amount
of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
particular series of Securities, the Company will deliver to the Trustee for the
Securities of such series 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 that
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of that series and except as provided in Sections 311(b), 311(d)
and 311(e)) and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 1202 and
shall state the basis for such credit and that such Securities have not
previously been so credited and will also deliver to such Trustee any Securities
to be so delivered. Such Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
Meetings of Holders of Securities
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 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 for any series of Securities that includes Bearer Securities,
may at any time call a meeting of the Holders of Securities of such 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 such Trustee
shall
<PAGE>
72
determine. Notice of every meeting of Holders of Securities of such 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 than 180 days prior to the
date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in principal amount of the Outstanding Securities of any
such series shall have requested the Trustee for any such series to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1301, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and such 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 for such series 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. 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. Subject to Section 1305(d), notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1302(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly that Persons entitled to vote a
majority in principal amount of the Outstanding Securities of such series shall
constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented to
a meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted by the affirmative vote of the Holders of a majority in
principal amount of the Outstanding Securities of that series; provided,
however, that except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage which is less than a
majority in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal aount of the Outstanding Securities of that
series.
<PAGE>
73
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 for
any series of Securities that includes Bearer Securities may make such
reasonable regulations as it may deem advisable for any meeting of Holders of
Securities of such series in regard to proof of the holding of Securities of
such series and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee for any series of Securities that includes Bearer Securities
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 of Securities of such
series held or represented by him as determined in accordance with Section 115;
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 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
<PAGE>
74
secretary of the meeting and one such copy shall be delivered to the Company,
and another to the Trustee for such series of Securities to be preserved by such
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.
* * *
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture dated as of
December 2, 1996 to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the first day of December 2, 1996.
PHILIP MORRIS COMPANIES INC.
[SEAL]
By: /s/ George R. Lewis
----------------------------
Vice President and Treasurer
Attest:
/s/ Diane M. McAdams
--------------------
Assistant Secretary
THE CHASE MANHATTAN BANK,
Trustee
[SEAL]
By: /s/ Frank J. Grippo
--------------------
Vice President
Attest:
/s/ Francine Springer
----------------------
Trust Officer
<PAGE>
75
EXHIBIT A
---------
[FORM OF CERTIFICATE TO BE DELIVERED TO
EUROCLEAR OR CEDEL, S.A. BY A
BENEFICIAL OWNER OF SECURITIES, IN ORDER TO
RECEIVE A DEFINITIVE BEARER SECURITY IN EXCHANGE
FOR AN INTEREST IN A TEMPORARY GLOBAL SECURITY OR TO
EXCHANGE AN INTEREST IN A TEMPORARY GLOBAL SECURITY
FOR AN INTEREST IN A PERMANENT GLOBAL SECURITY]
Philip Morris Companies Inc.
[Insert title or description of Securities]
Reference is hereby made to the Indenture, dated as of December 2, 1996
(the "Indenture") between Philip Morris Companies Inc. (the "Company") and The
Chase Manhattan Bank, as Trustee. Terms used herein unless otherwise defined
shall have the meanings ascribed to them in the Indenture.
This is to certify that as of the date hereof [and except as provided in
the fourth paragraph hereof]*, $___________________principal amount of the
above-captioned Securities represented by a temporary global Security (the
"temporary global Security") held by you for our account is:
(i) beneficially owned by persons that are not United States persons (as
defined below);
(ii) owned by United States person(s) that are (a) foreign branches of
United States financial institutions (as defined in United States Treasury
Regulation Section 1.165-12(c)(1)(v) ("financial institutions")) purchasing
for their own account or for resale, or (b) United States person(s) who
acquired the beneficial interest in the temporary global Security through
foreign branches of United States financial institutions and who hold the
beneficial interest in the temporary global Security 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, for the
benefit of the Company, that it will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986,
as amended, and the regulations thereunder); or
(iii) owned by financial institution(s) for the purpose of resale during
the restricted period (as defined in United States Treasury Regulation
Section 1.163-5(c)(2)(i)(D)(7)) and, in addition, financial institution(s)
described in this clause (iii) (whether or not also described in clause (i)
or (ii)), further certify that they have not acquired the beneficial interest
in the temporary global Security for the purpose of resale directly or
indirectly to a United States person or to a person within the United States.
"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), its territories, its possessions and other areas subject
to its jurisdiction (including the Commonwealth of Puerto Rico).
[This certificate excepts and does not relate to $_________ principal
amount of the temporary global Security held by you for our account as to which
we are not able to provide a certificate in this form. We understand that
exchange of such portion of the temporary global Security for [definitive Bearer
Securities] [interests in a permanent global Security] cannot be made until we
are able to provide a certificate in this form.]*
<PAGE>
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the above-captioned
Securities held by you for our account if any applicable statement herein is not
correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
We understand that this certificate is required in connection with certain
tax laws and regulations in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:
-------------------------
[Name of Person Making Certification]
By:
-----------------------------------
- ----------------------------------
* Delete if inappropriate.
A-2
<PAGE>
EXHIBIT B
---------
[FORM OF CERTIFICATE TO BE GIVEN TO THE APPROPRIATE
TRUSTEE BY EUROCLEAR OR CEDEL, S.A. REGARDING THE EXCHANGE
OF A TEMPORARY GLOBAL SECURITY FOR DEFINITIVE SECURITIES OR
FOR A PORTION OF A PERMANENT GLOBAL SECURITY]
Philip Morris Companies Inc.
[Insert title or description of Securities]
Reference is hereby made to the Indenture, dated as of December 2, 1996
(the "Indenture") between Philip Morris Companies Inc. (the "Company") and The
Chase Manhattan Bank, as Trustee. Terms used herein unless otherwise defined
shall have the meanings ascribed to them in the Indenture.
We refer to that portion of the temporary global Security in respect of the
above-captioned Securities which is herewith submitted to be exchanged for
[definitive Bearer Securities] [interests in a permanent global Security] (the
"Submitted Portion") as provided in the Prospectus Supplement dated [insert date
of Prospectus Supplement] in respect of such issue. This is to certify that (i)
we have received in writing or by tested telex or electronically (in accordance
with the requirements of United States Treasury Regulation Section 1.163-
5(c)(2)(i)(D)(3)(ii)) a certificate or certificates with respect to the entire
Submitted Portion, substantially in the form of Exhibit A to the Indenture, and
(ii) the Submitted Portion includes no part of the temporary global Security
excepted in such certificates.
We further certify that as of the date hereof we have not received any
notification from any of the persons giving such certificates to the effect that
the statements made by them with respect to any part of the Submitted Portion
are no longer true and cannot be relied on as of the date thereof.
We understand that this certificate is required in connection with certain
tax laws and regulations in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Submitted Portion:
U.S. $
-------------------------
Dated:
------------------------
[Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the
Euroclear System]*
[CEDEL, S.A.]*
By:
-------------------------------------
- ---------------------------------
* Delete if inappropriate.
B-1
<PAGE>
EXHIBIT C
---------
[FORM OF CERTIFICATE TO BE DELIVERED TO
EUROCLEAR OR CEDEL, S.A. BY A
BENEFICIAL OWNER OF SECURITIES, IN ORDER TO
RECEIVE PAYMENT ON A TEMPORARY GLOBAL SECURITY]
Philip Morris Companies Inc.
[Insert title or description of Securities]
Reference is hereby made to the Indenture, dated as of December 2, 1996
(the "Indenture") between Philip Morris Companies Inc. (the "Company") and The
Chase Manhattan Bank, as Trustee. Terms used herein unless otherwise defined
shall have the meanings ascribed to them in the Indenture.
This is to certify that as of the date hereof [and except as provided in
the fourth paragraph hereof]*, $___________________principal amount of the
above-captioned Securities represented by a temporary global Security (the
"temporary global Security") held by you for our account is:
(i) beneficially owned by persons that are not United States persons (as
defined below);
(ii) owned by United States person(s) that are (a) foreign branches of
United States financial institutions (as defined in United States Treasury
Regulation Section 1.165-12(c)(1)(v) ("financial institutions")) purchasing
for their own account or for resale, or (b) United States person(s) who
acquired the beneficial interest in the temporary global Security through
foreign branches of United States financial institutions and who hold the
beneficial interest in the temporary global Security 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, for the
benefit of the Company, that it will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986,
as amended, and the regulations thereunder); or
(iii) owned by financial institution(s) for the purpose of resale during
the restricted period (as defined in United States Treasury Regulation
Section 1.163-5(c)(2)(i)(D)(7)) and, in addition, financial institution(s)
described in this clause (iii) (whether or not also described in clause (i)
or (ii)), further certify that they have not acquired the beneficial interest
in the temporary global Security for the purpose of resale directly or
indirectly to a United States person or to a person within the United States.
"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), its territories, its possessions and other areas subject
to its jurisdiction (including the Commonwealth of Puerto Rico).
[This certificate excepts and does not relate to $_________ principal
amount of the temporary global Security held by you for our account as to which
we are not able to provide a certificate in this form. We understand that
payments, if any, due with respect to such portion of the temporary global
Security cannot be made until we are able to provide a certificate in this
form.]*
C-1
<PAGE>
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the above-captioned
Securities held by you for our account if any applicable statement herein is not
correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
We understand that this certificate is required in connection with certain
tax laws and regulations in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:
------------------------
[Name of Person Making Certification]
By:
-----------------------------------
- ---------------------------------
* Delete if inappropriate.
C-2
<PAGE>
EXHIBIT D
---------
[FORM OF CERTIFICATE TO BE GIVEN TO THE APPROPRIATE
TRUSTEE BY EUROCLEAR OR CEDEL, S.A. REGARDING PAYMENT
ON A TEMPORARY GLOBAL SECURITY]
Philip Morris Companies Inc.
[Insert title or description of Securities]
Reference is hereby made to the Indenture, dated as of December 2, 1996
(the "Indenture") between Philip Morris Companies Inc. (the "Company") and The
Chase Manhattan Bank, as Trustee. Terms used herein unless otherwise defined
shall have the meanings ascribed to them in the Indenture.
We refer to that portion of the temporary global Security in respect of the
above-captioned Securities for which we hereby request that you make payment to
us of the amounts payable on the relevant payment date (the "Submitted Portion")
as provided in the Prospectus Supplement dated [insert date of Prospectus
Supplement] in respect of such issue. This is to certify that (i) we have
received in writing or by tested telex or electronically (in accordance with the
requirements of United States Treasury Regulation Section 1.163-
5(c)(2)(i)(D)(3)(ii)) a certificate or certificates with respect to the entire
Submitted Portion, substantially in the form of Exhibit C to the Indenture, and
(ii) the Submitted Portion includes no part of the temporary global Security
excepted in such certificates.
We further certify that as of the date hereof we have not received any
notification from any of the persons giving such certificates to the effect that
the statements made by them with respect to any part of the Submitted Portion
are no longer true and cannot be relied on as of the date thereof.
We understand that this certificate is required in connection with certain
tax laws and regulations in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Submitted Portion:
U.S. $
----------------------------
Dated:
---------------------------
[Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the
Euroclear System]*
[CEDEL, S.A.]*
By:
-------------------------------------
- ----------------------------------
* Delete if inappropriate.
D-1
<PAGE>
EXHIBIT 4(b)
[FORM OF DEBT SECURITIES]
REGISTERED REGISTERED
NUMBER
R PHILIP MORRIS COMPANIES INC. $
SEE REVERSE FOR
CERTAIN DEFINITIONS
% NOTE DUE CUSIP
PHILIP MORRIS COMPANIES INC., a Virginia corporation (hereinafter called
the "Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
NOTE NOTE
DUE DUE
or registered assigns, the principal sum of DOLLARS
on , and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) thereon from , or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, on and
at maturity, at the rate per annum specified in the title of this Note, until
the principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in said Indenture, be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be
or (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the registered
Holder on such Regular Record Date and may be paid to the Person in whose name
this Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee for the Notes, notice whereof shall be given to Holders
of Notes not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture. Payment of the principal of and interest on this Note will be made
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
-------- -------
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities Register.
<PAGE>
Additional provisions of this Note are contained on the reverse hereof, and
such provisions shall have the same effect as though fully set forth in this
place.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee for the Notes by manual signature, this Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, PHILIP MORRIS COMPANIES INC. has caused this instrument
to be duly executed under its corporate seal.
Dated:
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE SECURITIES OF THE SERIES
DESIGNATED THEREIN DESCRIBED IN THE WITHIN-MENTIONED
INDENTURE.
THE CHASE MANHATTAN BANK,
By: AS TRUSTEE
AUTHORIZED OFFICER
PHILIP MORRIS COMPANIES INC.
By: SENIOR VICE PRESIDENT
Attest: ASSISTANT SECRETARY
<PAGE>
PHILIP MORRIS COMPANIES INC.
% NOTE DUE
This Note is one of a duly authorized issue of debentures, notes or other
evidences of indebtedness (hereinafter called the "Securities") of the Company
of the series hereinafter specified, which series is limited in aggregate
principal amount to $ (except as provided in the Indenture hereinafter
mentioned), all such Securities issued and to be issued under an Indenture dated
as of December 2, 1996 between the Company and The Chase Manhattan Bank, as
Trustee (herein called the "Indenture"), to which Indenture and all other
indentures supplemental thereto reference is hereby made for a statement of the
rights and limitations of rights thereunder of the Holders of the Securities and
of the rights, obligations, duties and immunities of the Trustee for each series
of Securities and of the Company, and the terms upon which the Securities are
and are to be authenticated and delivered. As provided in the Indenture, the
Securities may be issued in one or more series, which different series 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, 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 or permitted. This
Note is one of a series of the Securities designated therein as %
Notes due (the "Notes").
[The Notes are subject to redemption as a whole or in part at any time on
or after , at the option of
the Company, on not less than 30 nor more than 60 days' prior notice given as
provided in the Indenture, at the redemption price of 100% of the principal
amount thereof, together with interest accrued and unpaid thereon to the date
fixed for redemption.]
In the event of the redemption of this Note in part only, a new Note or
Notes in the amount of the unredeemed portion hereof shall be issued in the name
of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire
principal of all the Securities of any series upon compliance by the Company
with certain conditions set forth therein.
If an Event of Default, as defined in the Indenture, with respect to the
Notes shall occur and be continuing, the principal of all the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company with the consent of the Holders of more than 50% in
aggregate principal amount of the Securities at the time Outstanding of each
series to be affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities of any series at the time Outstanding, on behalf of the Holders
of all the Securities of such series, to
<PAGE>
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences with respect to
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 of this Note
and of any Note issued upon the transfer hereof or in exchange or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable on the Security Register of the Company, upon
surrender of this Note for registration of transfer at the office or agency of
the Company to be maintained for that purpose in the Borough of Manhattan, The
City of New York, or at any other office or agency of the Company maintained for
that purpose, 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 his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any multiple of $1,000. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of a like tenor and
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the registration of such transfer
or exchange, other than certain exchanges not involving any transfer.
The Company, the Trustee for the Notes and any agent of the Company or such
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment as herein provided and for all other
purposes, whether or not this Note be overdue, and neither the Company, such
Trustee nor any such agent shall be affected by notice to the contrary.
This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.
Certain terms used in this Note which are defined in the Indenture have the
meanings set forth therein.
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY NUMBER 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
______________________________________________________________________Attorney
to transfer the said Note on the books of Philip Morris Companies Inc. 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.
<PAGE>
EXHIBIT 4(c)
[REGISTERED NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
PHILIP MORRIS COMPANIES INC.
MEDIUM-TERM NOTE, SERIES C
REGISTERED REGISTERED
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE DESIGNATED METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
FLOATING RATE NOTE __ % FIXED RATE NOTE__
No. DSE- Principal Amount:
CUSIP Maturity Date:
Original Issue Date: Option to Elect Payment in
Interest Accrual Date: Specified Currency (Only
Issue Price: applicable if Specified
Currency is other than
U.S. Dollars):
Redemption Redemption
Date(s) Price(s) ___Yes ___No
---------- ----------
Authorized Denominations (Only
applicable if Specified
Currency is other than U.S. Dollars):
<PAGE>
Repayment Repayment Interest Payment Period:
Date(s) Price(s)
----------- ----------- Interest Payment Dates:
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period OID:
Only applicable if this is a Floating Rate Note:
Initial Interest Rate: Spread (plus or minus):
Index Maturity:
Base Rate: Spread Multiplier:
Interest Reset Period: Maximum Interest Rate:
Interest Reset Dates: Minimum Interest Rate:
Philip Morris Companies Inc., a Virginia corporation (the "Company"), for
value received, hereby promises to pay to ____________________ or registered
assigns, the principal sum of
(Specified Currency) on the "Maturity Date", as set forth above, and to pay
interest thereon as described on the reverse hereof.
The principal of (and premium, if any) and interest on this Note are payable
by the Company in such coin or currency specified above as at the time of
payment shall be legal tender for the payment of public and private debts (the
"Specified Currency"). If the Specified Currency is other than U.S. Dollars,
the Company will arrange to have all such payments converted into U.S. Dollars
in the manner described on the reverse hereof. Notwithstanding the foregoing,
the Holder hereof may, if so indicated above, elect to receive all payments in
respect hereof in the Specified Currency by delivery of a written request to the
Paying Agent located in The City of New York (initially, Chemical Bank) not
later than fifteen calendar days prior to the applicable payment date. Such
election will remain in effect until revoked by written notice to such Paying
Agent received not later than fifteen calendar days prior to the applicable
payment date.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON
THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been manually executed by
or on behalf of the Trustee under the Indenture, this Note shall not be entitled
to any benefit under the Indenture, or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, Philip Morris Companies Inc. has caused this Note to be
duly executed under its corporate seal.
Dated: _______________________________
[Seal]
PHILIP MORRIS COMPANIES INC.
By: ___________________________
Senior Vice President
Attest: ________________________
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated herein, described in the
within-mentioned Indenture.
CHEMICAL BANK,
as Trustee
By: ____________________________
Authorized Officer
3
<PAGE>
[REVERSE OF REGISTERED NOTE]
PHILIP MORRIS COMPANIES INC.
Medium-Term Note, Series C
1. This Note is one of a duly authorized issue of debentures, notes
or other evidences of indebtedness (hereinafter called the "Securities") of the
Company of the series hereinafter specified, all such Securities issued and to
be issued under the Indenture dated as of August 1, 1990, between the Company
and Chemical Bank, as Trustee (herein called the "Indenture"), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the rights and limitations of rights thereunder of the
Holders of the Securities and of the rights, obligations, duties and immunities
of the Trustee for each series of Securities and of the Company, and the terms
upon which the Securities are and are to be authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series 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, 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 or permitted. This Note is one of a series of the Securities
designated therein as Medium-Term Notes, Series C (the "Notes"). The Notes of
this series may be issued at various times with different maturity dates and
different principal repayment provisions, may bear interest at different rates,
may be payable in different currencies and may otherwise vary, all as provided
in the Indenture.
2. A. The Regular Record Date with respect to any Interest Payment
Date (as defined below) shall be the date 15 calendar days immediately preceding
such Interest Payment Date, whether or not such date shall be a Business Day.
Interest 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 the Note is
registered at the close of business on the Regular Record Date for such
Interest; provided, however, that interest payable on the Interest Payment Date
occurring at Maturity will be to the person to whom principal shall be payable;
provided, further, that the first payment of interest on any Note with an
Original Issue Date between a Regular Record Date and an Interest Payment Date
will be made on the Interest Payment Date following the next succeeding Regular
Record Date to the registered owner on such next succeeding Regular Record Date.
Notwithstanding the foregoing, any interest that is payable but not punctually
paid or duly provided for on any Interest Payment Date shall forthwith cease to
be payable to the registered holder thereof on such Regular Record Date, and may
be paid to the person in whose name such Note is registered on the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof having been given to the Holder of such
Note not less than ten days prior to such Special Record Date, or may be paid at
any time and in any other lawful manner, or as more fully provided the
Indenture. "Business Day" means any day, other than a Saturday or Sunday, that
meets each of the following applicable requirements: the day is (a) not a day on
which banking institutions are authorized or required by law or regulation to be
closed in The City of New York, (b) if this Note is denominated in a Specified
Currency other than U.S. Dollars, (i) not a day on which banking institutions
are authorized or required by law or regulation to close in the financial center
of the country issuing
4
<PAGE>
the Specified Currency (which in the case of ECU shall be London and Luxembourg
City, Luxembourg) and (ii) a day on which banking institutions in such financial
center are carrying out transactions in such Specified Currency and, (c) with
respect to a LIBOR Note, a London Banking Day. "London Banking Day" means any
day on which dealings in deposits in U.S. Dollars are transacted in the London
interbank market. In connection with any calculations, all percentages will be
rounded, if necessary to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point being rounded upwards and
all currency or currency unit amounts used and resulting from such calculations
on the Notes will be rounded to the nearest one-hundredth of a unit (with .005
of a unit being rounded upwards).
B. If this is a Fixed Rate Note, the Company promises to pay
interest on the principal amount at the rate per annum shown on the face hereof
until the principal amount hereof is paid or duly made available for payment.
Unless otherwise provided on the face hereof, the Company will pay interest
semiannually on ___________________ and _______________________ (each an
"Interest Payment Date"), commencing with the Interest Payment Date immediately
following the Original Issue Date shown on the face hereof and at Maturity.
Interest will accrue from and including the most recent Interest Payment Date
or, if no interest has been paid or duly provided for, from and including the
Original Issue Date on the face hereof, to, but excluding the Interest Payment
Date. The amount of such interest payable on any Interest Payment Date shall be
computed on the basis of a year of twelve 30-day months.
C. If this is a Floating Rate Note, the Company promises to pay
interest on the principal amount at the rate per annum equal to the Initial
Interest Rate shown on the face hereof until the first Interest Reset Date shown
on the face hereof following the Original Issue Date specified on the face
hereof and thereafter at a rate determined in accordance with the provisions
below under the heading "Determination of CD Rate", "Determination of Commercial
Paper Rate", "Determination of Federal Funds Rate", "Determination of LIBOR" or
"Determination of Treasury Rate", depending upon whether the Base Rate specified
above is CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Treasury
Rate, respectively, until the principal hereof is paid or duly made available
for payment. The Company will pay interest monthly, quarterly, semi-annually or
annually as specified on the face hereof under "Interest Payment Period",
commencing with the first Interest Payment Date specified on the face hereof
next succeeding the Original Issue Date, and at Maturity. Unless otherwise
provided on the face hereof, the dates on which interest will be payable (each
an "Interest Payment Date") will be, in the case of Notes with a monthly
Interest Payment Period, the third Wednesday of each month; in the case of Notes
with a quarterly Interest Payment Period, the third Wednesday of March, June,
September and December; in the case of Notes with a semi-annual Interest Payment
Period, the third Wednesday of the two months specified on the face hereof; and
in the case of Notes with an annual Interest Payment Date Period, the third
Wednesday of the month specified on the face hereof; provided, however, that if
an Interest Payment Date would fall on a day that is not a Business Day, such
Interest Payment Date shall be the following day that is a Business Day, except
that in case the Base Rate is LIBOR, if such date falls in the next calendar
month, such Interest Payment Date shall be the immediately preceding Business
Day.
The interest payable on a Floating Rate Note on each Interest Payment Date
will include accrued interest from and including the Original Issue Date or from
and including the last date in
5
<PAGE>
respect of which interest has been paid, as the case may be, to but excluding
such Interest Payment Date; provided, however, that if the Interest Reset Period
is daily or weekly, the interest payable on each Interest Payment Date, other
than at Maturity, will include accrued interest from and including the Original
Issue Date or from and including the last date in respect of which interest has
been paid, as the case may be, to, but excluding, the Record Date immediately
preceding such Interest Payment Date, and the interest payable at Maturity will
include accrued interest from and including the Original Issue Date or from and
including the last date in respect of which interest has been paid, as the case
may be, to, but excluding, the date of Maturity. Such accrued interest will be
calculated by multiplying the principal amount hereof by an accrued interest
factor. This accrued interest factor shall be computed by adding the interest
factors calculated for each day in the period for which accrued interest is
being calculated. The interest factor (expressed as a decimal) for each such day
shall be computed by dividing the interest rate applicable to such day by 360 if
the Base Rate is CD Rate, Commercial Paper Rate, Federal Funds Rate or LIBOR, as
indicated on the face hereof, or by the actual number of days in the year if the
Base Rate is Treasury Rate, as indicated on the face hereof. The interest rate
in effect on each day will be (a) if such day is an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to such
Interest Reset Date or (b) if such day is not an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to the
next preceding Interest Reset Date; provided, however, that (i) the interest
rate in effect from the Original Issue Date to the first Interest Reset Date
will be the Initial Interest Date and (ii) the interest rate in effect for the
ten calendar days immediately prior to Maturity will be that in effect on the
tenth calendar day preceding Maturity. Notwithstanding the foregoing, the
interest rate hereon shall not be greater than the Maximum Interest Rate, if
any, or less than the Minimum Interest Rate, if any, shown on the face hereof.
In addition, the interest rate hereon shall in no event be higher than the
maximum rate, if any, permitted by New York law. Commencing with the first
Interest Reset Date specified on the face hereof following the Original Issue
Date and thereafter upon each succeeding Interest Reset Date specified on the
face hereof, the rate at which interest on a Floating Rate Note is payable shall
be adjusted as specified on the face hereof under Interest Reset Period;
provided, however, that if any Interest Reset Date would otherwise be a day that
is not a Business Day, such Interest Reset Date shall be postponed to the next
day that is a Business Day, except that (i) if the Base Rate is LIBOR and such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day or (ii) if the Base Rate is
Treasury Rate and the Interest Reset Date falls on a date which is an auction
date, the Interest Reset Date shall be the following day that is a Business Day.
The Interest Determination Date pertaining to an Interest Reset Date will be,
if the Base Rate is CD Rate, Commercial Paper Rate or Federal Funds Rate, the
second Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date will be, if the Base
Rate is LIBOR, the second London Banking Day preceding such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date will be, if
the Base Rate is Treasury Rate, the day of the week in which such Interest Reset
Date falls on which Treasury bills (as defined below) of the Index Maturity
specified on the face hereof are auctioned. Treasury bills are normally
auctioned on Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday, except that such
auction may be held on the preceding Friday. If, as a result of a legal holiday,
an auction is
6
<PAGE>
so held on the preceding Friday, such Friday will be the Interest Determination
Date pertaining to the Interest Reset Date occurring in the next succeeding
week.
Subject to applicable provisions of law and except as specified herein, on
each Interest Reset Date the rate of interest shall be the rate determined in
accordance with the provisions of the applicable heading below.
Determination of CD Rate. If the Base Rate is CD Rate, as indicated on the
face hereof, the interest rate shall equal (a) the rate on the Interest
Determination Date specified on the face hereof for negotiable certificates of
deposit having the Index Maturity specified on the face hereof (1) as published
by the Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" or any successor publication of the Board of
Governors of the Federal Reserve System (the "H.15(519)"), under the heading
"CDs (Secondary Market)" or (2) if such rate is not so published by 9:00 A.M.,
New York City time, on the Calculation Date (as defined below) pertaining to
such Interest Determination Date, then as published by the Federal Reserve Bank
of New York in its daily statistical release "Composite 3:30 P.M. Quotations for
U.S. Government Securities" (the "Composite Quotations") under the heading
"Certificates of Deposit" or (b) if neither of such rates is published by 3:00
P.M., New York City time, on such Calculation Date, the arithmetic mean as
calculated by the Calculation Agent of the secondary market offered rates as of
10:00 A.M., New York City time, on such Interest Determination Date of three
leading nonbank dealers in negotiable U.S. Dollar certificates of deposit in The
City of New York selected by the Calculation Agent for negotiable certificates
of deposit of major United States money center banks of the highest credit
standing (in the market for negotiable certificates of deposit) with a remaining
maturity closest to the Index Maturity (as specified on the face hereof) in a
denomination of $5,000,000 in each of the above cases adjusted by the addition
or subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if such dealers are not quoting as mentioned above, the
interest rate in effect hereon until the Interest Reset Date next succeeding the
Interest Reset Date to which such Interest Determination Date relates shall be
the rate in effect hereon on such Interest Determination Date.
Determination of Commercial Paper Rate. If the Base Rate is Commercial Paper
Rate, as indicated on the face hereof, the interest rate shall equal (a) the
Money Market Yield (as defined herein) on the Interest Determination Date
specified on the face hereof of the rate for commercial paper having the Index
Maturity specified on the face hereof (1) as published in the H.15(519), under
the heading "Commercial Paper", or (2) if such yield is not so published by 9:00
A.M., New York City time, on the Calculation Date (as defined below) pertaining
to such Interest Determination Date, then as published in the Composite
Quotations under the heading "Commercial Paper" or (b) if neither of such yields
is published by 3:00 P.M., New York City time, on such Calculation Date, the
Money Market Yield of the arithmetic mean of the offered rates, as of 11:00
A.M., New York City time on such Interest Determination Date, of three leading
dealers of commercial paper in The City of New York, selected by the Calculation
Agent, for commercial paper of the Index Maturity specified on the face hereof
placed for an industrial issuer whose bond rating is "AA" or the equivalent,
from a nationally recognized rating agency, in each of the above cases adjusted
by the addition or subtraction of the Spread, if any, specified on the face
hereof, or by multiplication by the Spread Multiplier, if any, specified
7
<PAGE>
on the face hereof; provided, however, that if such dealers are not quoting as
mentioned above, the interest rate in effect hereon until the Interest Reset
Date next succeeding the Interest Reset Date to which such Interest
Determination Date relates shall be the rate in effect hereon on such Interest
Determination Date.
"Money Market Yield" shall be the yield calculated in accordance with the
following formula:
Money Market Yield = D X 360
------------------- X 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Determination of Federal Funds Rate. If the Base Rate is Federal Funds Rate,
as indicated on the face hereof, the interest rate shall equal (a) the rate on
the Interest Determination Date specified on the face hereof for Federal Funds
(1) as published in the H.15(519), under the heading "Federal Funds (Effective)"
or (2) if such rate is not so published by 9:00 A.M., New York City time, on the
Calculation Date (as defined below) pertaining to such Interest Determination
Date, then as published in the Composite Quotations under the heading "Federal
Funds/Effective Rate" or (b) if neither of such rates is published by 3:00 P.M.,
New York City time, on such Calculation Date, the arithmetic mean (as calculated
by the Calculation Agent) of the rates for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds transactions in
The City of New York selected by the Calculation Agent as of 11:00 A.M., New
York City time on such Interest Determination Date, in each of the above cases
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof; provided, however, that if such brokers are not quoting as
mentioned above, the interest rate in effect hereon until the Interest Reset
Date next succeeding the Interest Reset Date to which such Interest
Determination Date relates shall be the rate in effect hereon on such Interest
Determination Date.
Determination of LIBOR. If the Base Rate indicated on the face hereof is
LIBOR, with respect to LIBOR indexed to the offered rates for U.S. Dollar
deposits, the interest rate shall equal the arithmetic mean (as calculated by
the Calculation Agent) of offered rates for deposits in U.S. Dollars having the
Index Maturity specified on the face hereof, commencing on the second London
Banking Day immediately following the Interest Determination Date specified on
the face hereof, which appear on the Reuters Screen LIBO Page as of 11:00 A.M.,
London time, on such Interest Determination Date, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if less than two such offered rates so appear, the
Calculation Agent shall request the principal London office of each of four
major banks in the London interbank market selected by the Calculation Agent to
provide a quotation of the rate at which such bank offered to prime banks in the
London interbank market at approximately 11:00 A.M., London time, on such
Interest Determination Date, on deposits in U.S. Dollars having the
8
<PAGE>
Index Maturity specified on the face hereof commencing on the second London
Banking Day immediately following such Interest Determination Date and in a
principal amount equal to an amount not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time, and such
rate of interest hereon shall equal the arithmetic mean of (a) such quotations,
if at least two quotations are provided, or (b) if less than two quotations are
provided, the rates quoted at approximately 11:00 A.M., New York City time, on
such Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent for loans in U.S. Dollars to leading European
banks having the Index Maturity specified on the face hereof commencing on the
second London Banking Day immediately following such Interest Determination Date
and in a principal amount as aforesaid, in either case, adjusted by the addition
or subtraction of the Spread, if any, specified on the face hereof or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if the three banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned above, the interest rate in
effect hereon until the Interest Reset Date next succeeding the Interest Reset
Date to which such Interest Determination Date relates shall be the rate in
effect hereon on such Interest Determination Date.
Determination of Treasury Rate. If the Base Rate is Treasury Rate as indicated
on the face hereof, the interest rate shall equal the rate for the auction held
on the Interest Determination Date of direct obligations of the United States
("Treasury bills") having the Index Maturity shown on the face hereof as
published in the H.15(519), under the heading "Treasury bills--auction average
(investment)" or, if not so published by 9:00 A.M., New York City time, on the
Calculation Date (as defined below) pertaining to such Interest Determination
Date, the auction average rate (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) as
otherwise announced by the United States Department of the Treasury, in either
case, adjusted by the addition or subtraction of the Spread, if any, specified
on the face hereof, or by multiplication by the Spread Multiplier, if any,
specified on the face hereof. In the event that the results of the auction of
Treasury bills having the Index Maturity shown on the face hereof are not
published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held in a particular week, then
the rate of interest hereon shall be calculated by the Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Interest Determination Date, of three leading
primary United States government securities dealers selected by the Calculation
Agent for the issue of Treasury bills with a remaining maturity closest to the
Index Maturity shown on the face hereof, adjusted by the addition or subtraction
of the Spread, if any, specified on the face hereof, or by multiplication by the
Spread Multiplier, if any, specified on the face hereof; provided, however, that
if the dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the interest rate in effect hereon until the
Interest Reset Date next succeeding the Interest Reset Date to which such
Interest Determination Date relates shall be the rate in effect hereon on such
Interest Determination Date.
The Calculation Date pertaining to an Interest Determination Date shall be the
tenth calendar day after such Interest Determination Date or if any such day is
not a Business Day, the next succeeding Business Day. Initially, Chemical Bank
shall be the Calculation Agent. The
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Calculation Agent shall calculate the interest rate hereon in accordance with
the foregoing and will confirm in writing such calculation to the Trustee and
any Paying Agent immediately after each determination. Neither the Trustee nor
any Paying Agent shall be responsible for any such calculation. At the request
of the Holder hereof the Calculation Agent will provide to the Holder hereof the
interest rate hereon then in effect and, if determined, the interest rate which
will become effective as of the next Interest Reset Date.
3. Payments in U.S. Dollars of interest (other than interest payable
at Maturity) will be made by mailing a check to the Holder at the address of the
Holder appearing on the Security Register (as defined in the Indenture) on the
applicable Record Date. Notwithstanding the foregoing, a Holder of U.S.
$10,000,000 or more in aggregate principal amount of Notes of like tenor and
terms (or a holder of the equivalent thereof in a Specified Currency other than
U.S. Dollars as determined by the Exchange Rate Agent on the basis of the Market
Exchange Rate (as defined below)) shall be entitled to receive such payments in
U.S. Dollars by wire transfer of immediately available funds, but only if
appropriate payment instructions have been received in writing by the Company's
Paying Agent in The City of New York not less than 15 days prior to the
applicable Interest Payment Date. Simultaneously with any election by the Holder
hereof to receive payments of principal and any premium and interest in the
Specified Currency (if other than U.S. Dollars) such Holder shall provide
appropriate payment instructions to such Paying Agent and all such payments will
be made in immediately available funds to an account maintained by the payee
with a bank located outside the United States. Principal and any premium and
interest payable at Maturity will be paid in immediately available funds upon
surrender of such Note at the office of a Paying Agent in The City of New York
or at such other office or agency as the Company may designate.
4. If specified on the face hereof, this Note may be redeemed, as a
whole or from time to time in part, at the option of the Company, on not less
than 30 nor more than 60 days' prior notice given as provided in the Indenture,
on any Redemption Date(s) and at the related Redemption Price(s) set forth on
the face hereof. If less than all the Outstanding Notes of like tenor and terms
are to be redeemed, the particular Notes to be redeemed shall be selected by the
Trustee not more than 60 days prior to the Redemption Date from the Outstanding
Notes of like tenor or terms not previously called for redemption. Such
selection shall be of principal amounts equal to the minimum authorized
denomination for such Notes or any integral multiple thereof. Subject to the
immediately preceding sentence, such selection shall be made by any method as
the Trustee deems fair and appropriate. The notice of such redemption shall
specify which Notes are to be redeemed. In the event of redemption of this Note
in part only, a new Note or Notes of this series of like tenor or terms for the
unredeemed portion hereof will be issued to the Holder hereof upon the
cancellation hereof.
5. If specified on the face hereof, this Note will be subject to
repayment at the option of the Holder hereof on the Repayment Date(s) and at the
Repayment Price(s) indicated on the face hereof. If no such Repayment Date is
set forth on the face hereof, this Note may not be so repaid at the option of
the Holder hereof prior to Stated Maturity. On each Repayment Date, if any, this
Note shall be repayable in whole or in part at the option of the Holder hereof
at the applicable Repayment Price set forth on the face hereof, together with
interest thereon to the date of repayment. For this Note to be repaid in whole
or in part at the option of the Holder hereof, the
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Paying Agent in The City of New York must receive not less than 30 or more than
45 days prior to the Repayment Date (i) the Note with the form entitled "Option
to Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth the name of the Holder of
the Note, the principal amount of the Note, the certificate number of the Note
or a description of the Note's tenor or terms, the principal amount of the Note
to be prepaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Note to be prepaid with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly completed will be
received by such Paying Agent no later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter and such Note and form
duly completed are received by such Paying Agent by such fifth Business Day.
Exercise of such repayment option shall be irrevocable. Such option may be
exercised by the Holder for less than that entire principal amount provided that
the principal amount remaining outstanding after repayment is an authorized
denomination.
6. If the Specified Currency is other than U.S. Dollars, unless the
Holder has elected otherwise, payment in respect of this Note shall be made in
U.S. Dollars based upon the Exchange Rate as determined by the Exchange Rate
Agent (initially, Chemical Bank) appointed by the Company for such purpose based
on the highest firm bid quotation for U.S. Dollars received by such Exchange
Rate Agent at approximately 11:00 A.M., New York City time on the second
Business Day preceding the applicable payment date (or if no such rate is quoted
on such date the last date on which such rate was quoted), from three recognized
foreign exchange dealers in The City of New York selected by the Exchange Rate
Agent and approved by the Company (one of which may be the Exchange Rate Agent)
for the purchase by the quoting dealer for settlement on such payment date of
the aggregate amount of the Specified Currency payable on such payment date in
respect of all Notes denominated in such Specified Currency. All currency
exchange costs will be borne by the Holders of such Notes by deductions from
such payments. If no such bid quotations are available, payments will be made
in the Specified Currency unless such Specified Currency is unavailable due to
the imposition of exchange controls or to other circumstances beyond the
Company's control, in which case the Company will be entitled to make payments
in respect hereof in U.S. Dollars as provided below.
Except as set forth below, if payment on a Note is required to be made in a
Specified Currency other than U.S. Dollars and such currency is unavailable due
to the imposition of exchange controls or to other circumstances beyond the
Company's control or is no longer used by the government of the country issuing
such currency or for the settlement of transactions by public institutions of or
within the international banking community, then all payments due on that due
date with respect to such Note shall be made in U.S. Dollars. The amounts so
payable on any date in such Specified Currency shall be converted into U.S.
Dollars at a rate determined by the Exchange Rate Agent on the basis of the most
recently available noon buying rate for cable transfers in The City of New York
as determined by the Federal Reserve Bank of New York (the "Market Exchange
Rate").
If payment on a Note is required to be made in ECU and ECU is unavailable due
to the imposition of exchange controls or to other circumstances beyond the
Company's control or is no
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<PAGE>
longer used in the European Monetary System, then all payments due on that due
date with respect to such Note shall be made in U.S. Dollars. The amount so
payable on any date in ECU shall be converted into U.S. Dollars at a rate
determined by the Exchange Rate Agent, as of the second Business Day prior to
the date on which such payment is due on the following basis.
The component currencies of the ECU for this purpose (the "Components") shall
be the currency amounts which were components of the ECU as of the last date on
which the ECU was used in the European Monetary System. The equivalent of the
ECU in U.S. Dollars shall be calculated by aggregating the U.S. Dollar
equivalents of the Components.
The U.S. Dollar equivalent of each of the Components shall be determined by
the Exchange Rate Agent on the basis of the most recently available Market
Exchange Rate for such component.
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. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated components currencies
expressed in such single currency. If any component currency is divided into
two or more currencies, the amount of that currency as a Component shall be
replaced by amounts of such two or more currencies, each of which shall have a
value at the time of the division equal to the amount of the former component
currency divided by the number of currencies into which that currency was
divided.
All determinations referred to above of the Exchange Rate Agent shall be at
its sole discretion (except to the extent expressly provided herein that any
determination is subject to approval by the Company) and, in the absence of
manifest error, shall be conclusive for all purposes and binding upon the
Holders of the Notes and the Trustee and the Exchange Rate Agent shall have no
liability therefor.
7. If an Event of Default with respect to the Notes shall occur and
be continuing, the principal of all of the Notes may be declared due and payable
in the manner and with the effect provided in the Indenture. If the principal
of any Original Issue Discount Note is declared to be due and payable the amount
of principal due and payable with respect to such Note shall be limited to the
sum of the aggregate principal amount of such Note multiplied by the Issue Price
(expressed as a percentage of the aggregate principal amount) plus the original
issue discount accrued from the date of issue to the date of declaration, which
accrual shall be calculated using the "interest method" (computed in accordance
with generally accepted accounting principles) in effect on the date of
declaration. An Original Issue Discount Note is a Note, including any zero-
coupon Note, which has a stated redemption price at maturity that exceeds its
Issue Price by at least 0.25% of its Principal Amount, multiplied by the number
of full years from the Original Issue Date to the Maturity Date for such Note.
8. The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the
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<PAGE>
rights of the Holders of the Notes of each series under the Indenture to be
affected at any time by the Company with the consent of the Holders of 66-2/3%
in principal amount of the Notes at the time Outstanding of each series to be
affected, permits the amendment thereof with the consent of the Holders of a
majority in principal amount of the Notes at the time Outstanding of each
series. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Notes of each series at the
time Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Note.
9. No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency, herein and
in the Indenture prescribed.
10. The authorized denominations of Notes denominated in U.S. Dollars
will be U.S. $100,000 and any larger amount that is an integral multiple of U.S.
$1,000. The authorized denominations of Notes denominated in a currency other
than U.S. Dollars will be as set forth on the face hereof.
11. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of a Note is registrable in the Security
Register (as defined in the Indenture), for this series (initially Chemical Bank
in The City of New York). Every Note presented for registration of transfer
shall (if so required by the Company or the Trustee) be duly endorsed, or
accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Security Registrar duly executed, by the Holder
hereof or its attorney duly authorized in writing, and one or more new Notes of
like tenor and terms of authorized denominations and for the same aggregate
principal amount, will be issued in the name or names of the designated
transferee or transferees and delivered at the office of the Security Registrar
in The City of New York, or mailed, at the request, risk and expense of the
transferee or transferees, to the address or addresses shown in the Security
Register for such transferee or transferees.
The Company shall not be required (i) to issue, register the transfer of or
exchange Notes to be redeemed for a period of 15 days preceding the date of the
mailing of the notice of redemption, or (ii) to register the transfer of or to
exchange any such Note or portion thereof selected for redemption, except the
unredeemed portion of any such Note being redeemed in part.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. Prior to due
presentment of a Note for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the person in whose name a
Note is registered as the owner hereof for all purposes whether or not such Note
be
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<PAGE>
overdue and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
12. Certain of the Company's obligations under the Indenture with
respect to Notes of any series, may be terminated if the Company irrevocably
deposits with the Trustee money or Eligible Instruments sufficient to pay and
discharge the entire indebtedness on all Notes of such series, as described in
the Indenture.
13. Unless otherwise defined herein, all terms used in the Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
14. The Indenture, the Notes and any coupons appertaining hereto
shall be construed in accordance with and governed by the laws of the State of
New York.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to repay
the within Note (or portion hereof specified below) pursuant to its terms at a
price equal to the applicable Repayment Price thereof together with interest to
the Repayment Date, to the undersigned at
______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF THE UNDERSIGNED)
If less than the entire principal amount of the within Note is to be repaid,
specify the portion thereof which the Holder elects to have repaid __________;
and specify the denominations or denominations (which shall be in authorized
denominations) of the Notes to be issued to the Holder for the portion of the
within Note not being repaid (in the absence of any such specification, one such
Note will be issued for the portion not being repaid):
________________________________________________________________________________
Date: _________________________________ ____________________________________
(Signature)
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EXHIBIT 4(d)
PHILIP MORRIS COMPANIES INC.
FORM OF WARRANT AGREEMENT
[FOR WARRANTS SOLD ATTACHED TO DEBT SECURITIES]/*/
THIS WARRANT AGREEMENT dated as of
between Philip Morris Companies Inc., a Virginia corporation (hereinafter called
the "Company", which term includes any successor corporation under the Indenture
hereinafter referred to) and as Warrant Agent
(hereinafter called the "Warrant Agent").
WHEREAS, the Company has entered into an Indenture dated as of August 1,
1990 (the "Indenture"), with Chemical Bank, as Trustee (the "Trustee") providing
for the issuance from time to time of its unsecured debt securities (the
"Securities"), to be issued in one or more series as provided in the Indenture;
and
WHEREAS, the Company proposes to sell [title of Securities being
offered] (the "Offered Securities") with warrant certificates evidencing one or
more warrants (the "Warrants" or, individually a "Warrant") representing the
right to purchase [title of Securities purchasable through exercise of Warrants]
(the "Warrant Securities"), such warrant certificates and other warrant
certificates issued pursuant to this Agreement being herein called the "Warrant
Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
- ---------------
/*/ Complete or modify the provisions of this Form as appropriate to
reflect the terms of the Warrants and Offered Securities. Monetary amounts may
be in U.S. dollars or in foreign denominated currency or European Currency Units
(ECU).
<PAGE>
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION
AND DELIVERY OF WARRANT CERTIFICATES
Section 1.01. ISSUANCE OF WARRANTS. Warrants shall be initially
issued in connection with the issuance of the Offered Securities [but shall be
separately transferable on and after , 19 (the
"Detachable Date")] [and shall not be separately transferable] and each Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced thereby
shall represent the right, subject to the provisions contained herein and
therein, to purchase Warrant Securities in the principal amount of $
. Warrant Certificates shall be initially issued in units with the Offered
Securities and each Warrant Certificate included in such a unit shall evidence
Warrants for each $ principal amount of Offered
Securities included in such unit.
Section 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Each
Warrant Certificate, whenever issued, shall be in registered form substantially
in the form set forth in Exhibit A hereto, shall be dated
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or to
conform to usage. The Warrant Certificates shall be signed on behalf of the
Company by its Chairman of the Board, a Vice Chairman of the Board, its
President, a Vice President, its Treasurer, a Deputy Treasurer or an Assistant
Treasurer under its corporate seal and attested by its Secretary or an Assistant
Secretary. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of the Company may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of the Company who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to be
such officer before the Warrant Certificates so signed shall have been
countersigned and delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
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<PAGE>
The term "holder" or "holder of a Warrant Certificate" as used herein
shall mean any person in whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent for that
purpose. [If Offered Securities with Warrants which are not immediately
detachable -- or upon the register of the Offered Securities prior to the
Detachable Date. The Company will, or will cause the registrar of the Offered
Securities to, make available at all times to the Warrant Agent such information
as to holders of the Offered Securities with Warrants as may be necessary to
keep the Warrant Agent's records up to date.]
Section 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant
Certificates evidencing the right to purchase an aggregate principal amount not
exceeding $ aggregate principal amount of Warrant
Securities (except as provided in Sections 2.03(c), 3.02 and 4.01) may be
executed by the Company and delivered to the Warrant Agent upon the execution of
this Warrant Agreement or from time to time thereafter. The Warrant Agent
shall, upon receipt of Warrant Certificates duly executed on behalf of the
Company, countersign Warrant Certificates evidencing Warrants representing the
right to purchase up to $ aggregate principal amount of
Warrant Securities and shall deliver such Warrant Certificates to or upon the
order of the Company. Subsequent to such original issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only if
the Warrant Certificate is issued in exchange or substitution for one or more
previously countersigned Warrant Certificates or in connection with their
transfer as hereinafter provided or as provided in Section 2.03(c).
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.01. WARRANT PRICE. On , 19
the exercise price of each Warrant is $ .
During the period from , 19 through and
including , 19 , the exercise price of each Warrant will
be $ plus [accrued amortization of the original issue
discount] [accrued interest] from , 19 . On , 19
the exercise price of each Warrant will be $ . During the
period from , 19 through and including , 19 ,
the exercise price of each Warrant will be $ plus [accrued
amortization of the original issue discount] [accrued interest] from
, 19 . [In each case, the original issue discount
will be amortized at a % annual rate, computed on an annual basis using
a 360-day year consisting of twelve 30-day months]. Such purchase price of
Warrant Securities is referred to in this Agreement as the "Warrant Price".
[The original issue discount for each $1,000 principal amount of Warrant
Securities is $ .]
Section 2.02. DURATION OF WARRANTS. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof] [
, 19 ] and at or before 5:00 p.m. New York time on
, 19 (the "Expiration Date"). Each Warrant not exercised at or before 5:00
p.m. New York time on the Expiration Date shall become void, and all rights of
the holder of the Warrant Certificate evidencing such Warrant under this
Agreement shall cease.
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<PAGE>
Section 2.03. EXERCISE OF WARRANTS. (a) During the period
specified in Section 2.02 any whole number of Warrants may be exercised by
providing certain information set forth on the reverse side of the Warrant
Certificate and by paying in full, [in lawful money of the United States of
America,] [in cash or by certified check or official bank check or by bank wire
transfer, in each case,] [by bank wire transfer] [in immediately available
funds] the Warrant Price for each Warrant exercised, to the Warrant Agent at its
corporate trust office [or at ], provided that such
exercise is subject to receipt within five business days of such [payment] [wire
transfer] by the Warrant Agent of the Warrant Certificate with the form of
election to purchase Warrant Securities set forth on the reverse side of the
Warrant Certificate properly completed and duly executed. The date on which
payment in full of the Warrant Price is received by the Warrant Agent shall,
subject to receipt of the Warrant Certificate as aforesaid, be deemed to be the
date on which the Warrant is exercised. The Warrant Agent shall deposit all
funds received by it in payment of the Warrant Price in an account of the
Company maintained with it and shall advise the Company by telephone at the end
of each day on which a [payment] [wire transfer] for the exercise of Warrants is
received of the amount so deposited to its account. The Warrant Agent shall
promptly confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company and the Trustee under the Indenture of (i) the
number of Warrants exercised, (ii) the instructions of each holder of the
Warrant Certificates evidencing such Warrants with respect to delivery of the
Warrant Securities to which such holder is entitled upon such exercise, (iii)
delivery of Warrant Certificates evidencing the balance, if any, of the Warrants
remaining after such exercise, and (iv) such other information as the Company or
the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue, pursuant to the Indenture, in authorized denominations to
or upon the order of the holder of the Warrant Certificate evidencing such
Warrant, the Warrant Securities to which such holder is entitled, in fully
registered form, registered in such name or names as may be directed by such
holder./*/ If fewer than all of the Warrants evidenced by such Warrant
Certificate are exercised, the Company shall execute, and an authorized officer
of the Warrant Agent shall manually countersign and deliver, a new Warrant
Certificate evidencing the number of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax
or other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities, and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
Warrant Security until such tax or other charge shall have been paid or it has
been established to the Company's satisfaction that no such tax or other charge
is due.
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/*/ Subject to change in accordance with changes in tax laws and regulations.
- 4 -
<PAGE>
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANT CERTIFICATES
Section 3.01. NO RIGHTS AS WARRANT SECURITY HOLDER CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant evidenced
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including, without limitation, the right to receive the
payment of principal of, or premium, if any, or interest, if any, on Warrant
Securities or to enforce any of the covenants in the Indenture.
Section 3.02. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
CERTIFICATES. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate and of indemnity reasonably satisfactory
to it and, in the case of mutilation, upon surrender thereof to the Warrant
Agent for cancellation, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the Warrant
Agent shall manually countersign and deliver, in exchange for or in lieu of the
lost, stolen, destroyed or mutilated Warrant Certificate, a new Warrant
Certificate of the same tenor and evidencing a like number of Warrants. Upon the
issuance of any new Warrant Certificate 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 Warrant Agent) in connection therewith. Every
substitute Warrant Certificate executed and delivered pursuant to this Section
in lieu of any lost, stolen or destroyed Warrant Certificate shall represent an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered 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 of mutilated, lost, stolen or destroyed Warrant Certificates.
Section 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the Trustee, the holder
of any Warrant Securities or the holder of any other Warrant Certificate, may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce
or otherwise in respect of, his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and in
this Agreement.
ARTICLE IV
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES
Section 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [If
Offered Securities with Warrants which are immediately detachable--Upon] [If
Offered Securities with
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Warrants which are not immediately detachable--Prior to the Detachable Date a
Warrant Certificate may be exchanged or transferred only together with the
Offered Security to which the Warrant Certificate was initially attached, and
only for the purpose of effecting or in conjunction with an exchange or transfer
of such Offered Security. Prior to the Detachable Date, each transfer of the
Offered Security on the register of the Offered Securities shall operate also to
transfer the related Warrant Certificates. After the Detachable Date upon]
surrender at the corporate trust office of the Warrant Agent [or ],
Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants or the transfer
thereof may be registered in whole; provided that such other Warrant
Certificates evidence the same aggregate number of Warrants as the Warrant
Certificates so surrendered. The Warrant Agent shall keep, at its corporate
trust office [and at ], books in which, subject to such
reasonable regulations as it may prescribe, it shall register Warrant
Certificates and exchanges and transfers of outstanding Warrant Certificates,
upon surrender of the Warrant Certificates to the Warrant Agent at its corporate
trust office [or ] for exchange or registration of
transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent. No service charge shall be
made for any exchange or registration of transfer of Warrant Certificates, but
the Company may require payment of a sum sufficient to cover any stamp or other
tax or other governmental charge that may be imposed in connection with any such
exchange or registration of transfer. Whenever any Warrant Certificates are so
surrendered for exchange or registration of transfer an authorized officer of
the Warrant Agent shall manually countersign and deliver to the person or
persons entitled thereto a Warrant Certificate or Warrant Certificates duly
authorized and executed by the Company, as so requested. The Warrant Agent
shall not be required to effect any exchange or registration of transfer which
will result in the issuance of a Warrant Certificate evidencing a fraction of a
Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange or registration of transfer of Warrant
Certificates shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement, as the
Warrant Certificates surrendered for such exchange or registration of transfer.
Section 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. If
Warrants which are not immediately detachable--Every holder of a Warrant
Certificate, by accepting the same, consents and agrees with the Company, the
Warrant Agent and with every subsequent holder of such Warrant Certificate that
until the transfer of the Warrant Certificate is registered on the books of the
Warrant Agent [or the register of the Offered Securities prior to the Detachable
Date], the Company and the Warrant Agent [or the registrar of the Offered
Securities prior to the Detachable Date], may treat the registered holder as the
absolute owner thereof for any purpose and as the person entitled to exercise
the rights represented by the Warrants evidenced thereby, any notice to the
contrary notwithstanding.
Section 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange, registration of transfer or exercise of
the Warrants evidenced thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
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<PAGE>
no Warrant Certificates shall be issued hereunder in exchange or in lieu
thereof. The Warrant Agent shall deliver to the Company from time to time or
otherwise dispose of cancelled Warrant Certificates in a manner satisfactory to
the Company.
ARTICLE V
CONCERNING THE WARRANT AGENT
Section 5.01. WARRANT AGENT. The Company hereby appoints
as Warrant Agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth, and
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to
pay the Warrant Agent the compensation to be agreed upon with the Company
for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim
of such liability.
(b) Agent for the Company. In acting under this Warrant Agreement
and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
a relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory
to it, and the advice of such 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 accordance with the advice of
such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur
no liability for or in respect of any action taken or thing suffered by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or
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<PAGE>
document reasonably believed by it to be genuine and to have been presented
or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
directors and employees, may become the owner of or acquire any interest in
Warrants, with the same rights that it or they would have if it were not
the Warrant Agent hereunder, and, to the extent permitted by applicable
law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of holders of Warrant Securities or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be deemed to prevent
the Warrant Agent from acting as Trustee under the Indenture.
(f) No Liability for Interest. The Warrant Agent shall have no
liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have no
liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent shall
not be responsible for any of the recitals or representations herein or in
the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon) all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read
into this Agreement or the Warrant Certificates against the Warrant Agent.
The Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability, the
payment of which within a reasonable time is not, in its reasonable
opinion, assured to it. The Warrant Agent shall not be accountable or
under any duty or responsibility for the use by the Company of any of the
Warrant Certificates authenticated by the Warrant Agent and delivered by it
to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the Warrant Certificates. The Warrant Agent
shall have no duty or responsibility in case of any default by the Company
in the performance of its covenants or agreements contained herein or in
the Warrant Certificates or in the case of the receipt of any written
demand from a holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 6.02 hereof to make any demand
upon the Company.
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<PAGE>
Section 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent hereunder
until all the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective; provided that such date
shall not be less than three months after the date on which such notice is given
unless the Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an instrument in writing signed by or on
behalf of the Company and specifying such removal and the date when it shall
become effective. Such resignation or removal shall take effect upon the
appointment by the Company, as hereinafter provided, of a successor Warrant
Agent (which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The obligation
of the Company under Section 5.02(a) shall continue to the extent set forth
therein notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or shall file a petition seeking relief under the Federal Bankruptcy
Code, as now constituted or hereafter amended, or under any other applicable
Federal or State bankruptcy law or similar law or make an assignment for the
benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or State bankruptcy or
similar law, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be appointed by the Company by an instrument in writing, filed with the
successor Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the successor Warrant Agent of such appointment,
the Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
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<PAGE>
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets and business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
Section 6.01. AMENDMENT. This Agreement may be amended by the
parties hereto, without the consent of the holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided that
such action shall not adversely affect the interests of the holders of the
Warrant Certificates.
Section 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT.
If the Warrant Agent shall receive any notice or demand addressed to the Company
by the holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 6.03. ADDRESSES. Any communication from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to
, Attention: , and any communication from
the Warrant Agent to the Company with respect to this Agreement shall be
addressed to Philip Morris Companies Inc., 120 Park Avenue, New York, New York
10017, Attention: Treasurer (or such other address as shall be specified in
writing by the Warrant Agent or by the Company).
Section 6.04. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of New York.
Section 6.05. DELIVERY OF PROSPECTUS. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with the delivery of the Warrant Securities issued upon
such exercise, a Prospectus.
Section 6.06. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts
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<PAGE>
filings under United States Federal and State laws (including without limitation
a registration statement in respect of the Warrants and Warrant Securities under
the Securities Act of 1933), which may be or become requisite in connection with
the issuance, sale, transfer, and delivery of the Warrant Certificates, the
exercise of the Warrants, the issuance, sale, transfer, and delivery of the
Warrant Securities issued upon exercise of the Warrants or upon the expiration
of the period during which the Warrants are exercisable.
Section 6.07. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing
in this Agreement shall give to any person other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement.
Section 6.08. HEADINGS. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 6.09. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
Section 6.10. INSPECTION OF AGREEMENT. A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
IN WITNESS WHEREOF, Philip Morris Companies Inc. has caused this
Agreement to be signed by one of its duly authorized officers, and its corporate
seal to be affixed hereunto, and the same to be attested by its Secretary or an
Assistant Secretary, all as of the day and year first above written.
PHILIP MORRIS COMPANIES INC.
By_________________________________
Attest:
______________________________
By_________________________________
As Warrant Agent
Attest:
______________________________
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<PAGE>
Exhibit A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
[Form of Legend if Securities with Warrants which are not immediately
detachable: Prior to this Warrant Certificate
cannot be transferred or exchanged unless attached to a [Title of Offered
Securities].]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
PHILIP MORRIS COMPANIES INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 5:00 P.M. NEW YORK TIME ON , 19
No.
Warrants
This certifies that or
registered assigns is the registered owner of the above indicated number of
Warrants, each Warrant entitling such owner to purchase, at any time [after 5:00
p.m. New York time on , 19 and] on or
before 5:00 p.m. New York time on , 19 , $
principal amount of [Title of Warrant Securities] (the "Warrant Securities"), of
Philip Morris Companies Inc. (the "Company"), issued and to be issued under the
Indenture (as hereinafter defined), on the following basis: [on , 19
the exercise price of each Warrant is $ ; during the period
from , 19 , through and including , 19 ,
the exercise price of each Warrant will be $
plus [accrued amortization of the original issue discount] [accrued interest]
from , 19 : on , 19
the exercise price of each Warrant will be $ ; during the
period from , 19 , through and including
, 19 , the exercise price of each Warrant will be $ plus [accrued
amortization of the original issue discount] [accrued interest] from
, 19 ; [in each case, the original issue discount will be amortized at a %
annual rate, computed on an annual basis, using a 360-day year consisting of
twelve 30-day months] (the "Warrant Price"). [The original issue discount for
each $1,000 principal amount of Warrant Securities is $ .] The
holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full, [in lawful money
of the United States of America,] [in cash or by certified check or official
bank check or by bank wire transfer, in each case,] [by bank wire transfer] in
immediately available funds, the Warrant Price for each Warrant exercised to the
Warrant Agent (as hereinafter defined) and by surrendering this Warrant
Certificate, with the purchase form on the back hereof duly executed, at the
corporate trust office of [name of Warrant Agent], or its successor as warrant
agent (the "Warrant Agent"), [or ]
currently at the
A-1
<PAGE>
address specified on the reverse hereof, and upon compliance with and subject to
the conditions set forth herein and in the Warrant Agreement (as hereinafter
defined).
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities in registered form in denominations
of $ and any integral multiples thereof. Upon any exercise of fewer
than all of the Warrants evidenced by this Warrant Certificate, there shall be
issued to the holder hereof a new Warrant Certificate evidencing the number of
Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of , 19 (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the above-mentioned office of the
Warrant Agent [and at ].
The Warrant Securities to be issued and delivered upon the exercise of
the Warrants evidenced by this Warrant Certificate will be issued under and in
accordance with an Indenture dated as of August 1, 1990 (the "Indenture"),
between the Company and Chemical Bank, as Trustee (Chemical Bank, and any
successor to such Trustee being hereinafter referred to as the "Trustee"), and
will be subject to the terms and provisions contained in the Indenture. Copies
of the Indenture and the form of the Warrant Securities are on file at the
corporate office of the Trustee [and at ].
[If Offered Securities with registered Warrants which are not
immediately detachable--Prior to , 19 this Warrant Certificate
may be exchanged or transferred only together with the [Title of Offered
Securities] ("Offered Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Securities. After such date, this
[If Offered Securities with registered Warrants which are immediately
detachable--Transfer of this] Warrant Certificate may be registered when this
Warrant Certificate is surrendered at the corporate trust office of the Warrant
Agent [or ] by the registered owner or his assigns, in person or by
an attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement.]
[If Offered Securities with Warrants which are not immediately
detachable--Except as provided in the immediately preceding paragraph, after]
[If Offered Securities with Warrants which are immediately detachable--After]
countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including, without limitation,
the right to receive payments of principal of and premium, if any, or interest,
if any, on the Warrant Securities or to enforce any of the covenants of the
Indenture.
A-2
<PAGE>
This Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
Dated as of , 19 .
PHILIP MORRIS COMPANIES INC.
By____________________________
Attest:
________________________________
Countersigned:
________________________________
As Warrant Agent
By______________________________
Authorized Signature
A-3
<PAGE>
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash
or by certified check or official bank check or by bank wire transfer] [by bank
wire transfer] [in immediately available funds] the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department,
[insert address of Warrant Agent], Attn:
[or ], which [payment] [wire transfer] must specify the name of
the holder and the number of Warrants exercised by such holder. In addition, the
holder must complete the information required below and present this Warrant
Certificate in person or by mail (registered mail is recommended) to the Warrant
Agent at the addresses set forth below. This Warrant Certificate, completed and
duly executed, must be received by the Warrant Agent within five business days
of the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise
Warrants, evidenced by this Warrant Certificate, to purchase $
principal amount of the [Title of Warrant Securities] (the "Warrant Securities")
of Philip Morris Companies Inc. and represents that he has tendered payment for
such Warrant Securities [in cash or by certified check or official bank check or
by bank wire transfer, in each case,] [by bank wire transfer] in immediately
available funds to the order of Philip Morris Companies Inc., c/o [insert name
and address of Warrant Agent] in the amount of $ in
accordance with the terms hereof. The undersigned requests that said principal
amount of Warrant Securities be in fully registered form in the authorized
denominations, registered in such names and delivered all as specified in
accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
A-4
<PAGE>
Dated: Name_________________________________
(Please Print)
________________________________ Address______________________________
(Insert Social Security or Other
Identifying Number of Holder)
_____________________________________
Signature____________________________
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
By mail at_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants--complete as
appropriate.]
A-5
<PAGE>
Assignment
(Form of Assignment To Be Executed if Holder Desires
To Transfer Warrants Evidenced Hereby)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address including zip code)
________________________________________________
(Please insert social security or other
identifying number)
________________________________________________________________________________
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.
Dated:
________________________________________________
Signature
(Signature must conform in all respects to name
of holder as specified on the face of this
Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member
broker of the New York, the American, Midwest or
Pacific Stock Exchange.)
Signature Guaranteed:
____________________________
A-6
<PAGE>
PHILIP MORRIS COMPANIES INC.
FORM OF WARRANT AGREEMENT
[FOR WARRANTS SOLD ALONE]/*/
THIS WARRANT AGREEMENT dated as of between
Philip Morris Companies Inc., a Virginia corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to) and as Warrant
Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an Indenture dated as of August 1,
1990 (the "Indenture"), with Chemical Bank, as Trustee (the "Trustee") providing
for the issuance from time to time of its debt securities (the "Securities"), to
be issued in one or more series as provided in the Indenture; and
WHEREAS, the Company proposes to sell warrant certificates evidencing
one or more warrants (the "Warrants" or, individually, a "Warrant") representing
the right to purchase [title of debt securities purchasable through exercise of
Warrants] (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION
AND DELIVERY OF WARRANT CERTIFICATES
Section 1.01. ISSUANCE OF WARRANTS. Each Warrant Certificate shall
evidence one or more Warrants. Each Warrant evidenced thereby shall represent
the right, subject to the
- ---------------
/*/ Complete or modify the provisions of this Form as appropriate to reflect
the terms of the Warrants and offered Debentures. Monetary amounts may be in
U.S. dollars or in foreign denominated currency or European Currency Units
(ECU).
- 1 -
<PAGE>
provisions contained herein and therein, to purchase a Warrant Security in the
principal amount of $ .
Section 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Each
Warrant Certificate, whenever issued, shall be in registered form substantially
in the form set forth in Exhibit A hereto, shall be dated ___________________
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or to
conform to usage. The Warrant Certificates shall be signed on behalf of the
Company by its Chairman of the Board, a Vice Chairman of the Board, its
President, a Vice President, its Treasurer, a Deputy Treasurer or an Assistant
Treasurer under its corporate seal and attested by its Secretary or an Assistant
Secretary. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of the Company may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of the Company who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to be
such officer before the Warrant Certificates so signed shall have been
countersigned and delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used herein
shall mean any person in whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent for that
purpose.
Section 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant Certificates
evidencing the right to purchase an aggregate amount not exceeding $
aggregate principal amount of Warrant Securities (except as provided in Section
2.03(c), 3.02 and 4.01) may be executed by the Company and delivered to the
Warrant Agent upon the execution of this Warrant Agreement or from time to time
thereafter. The Warrant Agent shall, upon, receipt of Warrant Certificates duly
executed on behalf of the Company, countersign Warrant Certificates evidencing
Warrants representing the right to purchase up to $
aggregate principal
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amount of Warrant Securities and shall deliver such Warrant Certificates to or
upon the order of the Company. Subsequent to such original issuance of the
Warrant Certificates, the Warrant Agent shall countersign a Warrant Certificate
only if the Warrant Certificate is issued in exchange or substitution for one or
more previously countersigned Warrant Certificates or in connection with their
transfer as hereinafter provided or as provided in Section 2.03(c).
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.01. WARRANT PRICE. On , 19
the exercise price of each Warrant is $ . During the period
from , 19 , through and including , 19 , the exercise
price of each Warrant will be $ plus [accrued amortization
of the original issue discount] [accrued interest] from , 19
. On , 19 the exercise price of each Warrant
will be $ . During the period from , 19
, through and including , 19 , the exercise price of each
Warrant will be $ plus [accrued amortization of the
original issue discount] [accrued interest] from ,
19 . [In each case, the original issue discount will be amortized at a %
annual rate, computed on an annual basis using a 360-day year consisting of
twelve 30-day months]. Such purchase price of Warrant Securities is referred to
in this Agreement as the "Warrant Price". [The original issue discount for each
$1,000 principal amount of Warrant Securities is $
.]
Section 2.02. DURATION OF WARRANTS. Each Warrant may be exercised in
whole at any time as specified herein, on or after [the date thereof]
[ , 19 ] and at or before 5:00 p.m. New York time on , 19
(the "Expiration Date"). Each Warrant not exercised at or before 5:00 p.m. New
York time on the Expiration Date shall become void, and all rights of the holder
of the Warrant Certificate evidencing such Warrant under this Agreement shall
cease.
Section 2.03. EXERCISE OF WARRANTS.
(a) During the period specified in Section 2.02 any whole number of
Warrants may be exercised by providing certain information set forth on the
reverse side of the Warrant Certificate and by paying in full, [in lawful money
of the United States of America] [in cash or by certified check or official bank
check or by bank wire transfer, in each case] [by bank wire transfer] in
immediately available funds, the Warrant Price for each Warrant exercised, to
the Warrant Agent at its corporate trust office [or at ], provided
that such exercise is subject to receipt within five business days of such
[payment] [wire transfer] by the Warrant Agent of the Warrant Certificate with
the form of election to purchase Warrant Securities set forth on the reverse
side of the Warrant Certificate properly completed and duly executed. The date
on which payment in full of the Warrant Price is received by the Warrant Agent
shall, subject to receipt of the Warrant Certificate as aforesaid, be deemed to
be the date on which the Warrant is exercised. The Warrant Agent shall deposit
all funds received by it in payment of the Warrant Price in an account of the
Company maintained with it and shall advise the Company by telephone at the end
of each day on which a [payment] [wire transfer] for the exercise of
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<PAGE>
Warrants is received of the amount so deposited to its account. The Warrant
Agent shall promptly confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company and the trustee under the Indenture of (i) the
number of Warrants exercised, (ii) the instructions of each holder of the
Warrant Certificates evidencing such Warrants with respect to delivery of the
Warrant Securities to which such holder is entitled upon such exercise, (iii)
delivery of Warrant Certificates evidencing the balance, if any, of the Warrants
remaining after such exercise, and (iv) such other information as the Company or
the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue, pursuant to the Indenture, in authorized denominations to
or upon the order of the holder of the Warrant Certificate evidencing such
Warrant, the Warrant Securities to which such holder is entitled in fully
registered form, registered in such name or names as may be directed by such
holder. If fewer than all of the Warrants evidenced by such Warrant Certificate
are exercised, the Company shall execute, and an authorized officer of the
Warrant Agent shall manually countersign and deliver, a new Warrant Certificate
evidencing the number of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities; and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
Warrant Debentures until such tax or other charge shall have been paid or it has
been established to the Company's satisfaction that no such tax or other charge
is due.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANT CERTIFICATES
Section 3.01. NO RIGHTS AS WARRANT SECURITY HOLDER CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant evidenced
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including, without limitation, the right to receive the
payment of principal of, or premium, if any, or interest, if any, on Warrant
Securities or to enforce any of the covenants in the Indenture.
Section 3.02. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
CERTIFICATES. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate and of indemnity reasonably satisfactory
to it and, in the case of mutilation, upon surrender thereof to the Warrant
Agent for cancellation, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the Warrant
Agent shall manually countersign and deliver, in exchange for or in lieu of the
lost, stolen, destroyed or mutilated Warrant Certificate, a new
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Warrant Certificate of the same tenor and evidencing a like number of Warrants.
Upon the issuance of any new Warrant Certificate 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 Warrant Agent) in connection
therewith. Every substitute Warrant Certificate executed and delivered pursuant
to this Section in lieu of any lost, stolen or destroyed Warrant Certificate
shall represent an additional contractual obligation of the Company, whether or
not the lost, stolen or destroyed Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of this Agreement
equally and proportionately with any and all other Warrant Certificates duly
executed and delivered 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 of mutilated, lost, stolen or destroyed Warrant
Certificates.
Section 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the Trustee, the holder
of any Warrant Securities or the holder of any other Warrant Certificate, may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce
or otherwise in respect of, his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and in
this Agreement.
ARTICLE IV
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES
Section 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES.
Upon surrender at the corporate trust office of the Warrant Agent [or
], Warrant Certificates evidencing Warrants may be
exchanged for Warrant Certificates in other denominations evidencing such
Warrants or the transfer thereof may be registered in whole or in part provided
that such other Warrant Certificates evidence the same aggregate number of
Warrants as the Warrant Certificates so surrendered. The Warrant Agent shall
keep, at its corporate trust office [and at ], books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at
its corporate trust office [or ], for exchange
or registration of transfer, properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company and the Warrant Agent. No service
charge shall be made for any exchange or registration of Transfer of Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration of transfer. Whenever any
Warrant Certificates are so surrendered for exchange or registration of
transfer, an authorized officer of the Warrant Agent shall manually countersign
and deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange or
registration of transfer which will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants
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<PAGE>
and a fraction of a Warrant. All Warrant Certificates issued upon any exchange
or registration of transfer of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the
same benefits under this Agreement, as the Warrant Certificates surrendered for
such exchange or registration of transfer.
Section 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. The
Company and the Warrant Agent may treat the registered holder as the absolute
owner thereof for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.
Section 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange, registration of transfer or exercise of
the Warrants evidenced thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof.
The Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V
CONCERNING THE WARRANT AGENT
Section 5.01. WARRANT AGENT. The Company hereby appoints
as Warrant Agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth; and
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to
pay the Warrant Agent the compensation to be agreed upon with the Company
for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim
of such liability.
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<PAGE>
(b) Agent for the Company. In acting under this Warrant Agreement
and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory
to it, and the advice of such 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 accordance with the advice of
such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur
no liability for or in respect of any action taken or thing suffered by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest
in, Warrants, with the same rights that it or they would have if it were
not the Warrant Agent hereunder, and, to the extent permitted by applicable
law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of holders of Warrant Securities or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the
Warrant Agent from acting as Trustee under the Indenture.
(f) No Liability for Interest. The Warrant Agent shall have no
liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have no
liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent shall
not be responsible for any of the recitals or representations herein or in
the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read
into this Agreement or the Warrant Certificates against the Warrant Agent.
The Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability, the
payment of which within a reasonable time is not, in its reasonable
opinion, assured to it. The Warrant Agent shall not be accountable or
under any duty or responsibility for the use by the Company of any of the
Warrant Certificates authenticated by the Warrant Agent and
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<PAGE>
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default
by the Company in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any
duty or responsibility to initiate or attempt to initiate any proceedings
at law or otherwise or, except as provided in Section 6.02 hereof, to make
any demand upon the Company.
Section 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the holders from time to time
of the Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective, provided that such date
shall not be less than three months after the date on which such notice is given
unless the Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an instrument in writing signed by or on
behalf of the Company and specifying such removal and the date when it shall
become effective. Such resignation or removal shall take effect upon the
appointment by the Company, as hereinafter provided, of a successor Warrant
Agent (which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The obligation
of the Company under Section 5.02(a) shall continue to the extent set forth
therein notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or shall file a petition seeking relief under the Federal Bankruptcy
Code, as now constituted or hereafter amended, or under any other applicable
Federal or State bankruptcy law or similar law or make an assignment for the
benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or State bankruptcy or
similar law, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be appointed by the Company by an instrument in writing, filed with the
successor Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the successor Warrant Agent of such appointment,
the Warrant Agent shall cease to be Warrant Agent hereunder.
<PAGE>
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be merged
or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets and business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
Section 6.01. AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided that such action
shall not adversely affect the interests of the holders of the Warrant
Certificates.
Section 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT.
If the Warrant Agent shall receive any notice or demand addressed to the Company
by a holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 6.03. ADDRESSES. Any communication from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to,
Attention: , and any communication
from the Warrant Agent to the Company with respect to this Agreement shall be
addressed to Philip Morris Companies Inc., 120 Park Ave., New York, New York
10017, Attention: Treasurer (or such other address as shall be specified in
writing by the Warrant Agent or by the Company).
Section 6.04. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of New York.
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<PAGE>
Section 6.05. DELIVERY OF PROSPECTUS. The Company will furnish to
the Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with the delivery of the Warrant Securities issued upon
such exercise, a Prospectus.
Section 6.06. OBTAINING OF GOVERNMENT APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities acts filings under United States Federal and State
laws (including without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933), which may be
or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
Section 6.07. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing
in this Agreement shall give to any person other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement.
Section 6.08. HEADINGS. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 6.09. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
Section 6.10. INSPECTION OF AGREEMENT. A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
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<PAGE>
IN WITNESS WHEREOF, Philip Morris Companies Inc. has caused this
Agreement to be signed by one of its duly authorized officers, and its corporate
seal to be affixed hereunto, and the same to be attested by its Secretary or an
Assistant Secretary, all as of the day and year first above written.
PHILIP MORRIS COMPANIES INC.
By_________________________________
Attest:
______________________________
By_________________________________
As Warrant Agent
Attest:
______________________________
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<PAGE>
Exhibit A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
PHILIP MORRIS COMPANIES INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 5:00 P.M. NEW YORK TIME ON , 19
No.
Warrants
This certifies that or
registered assigns is the registered owner of the above indicated number of
Warrants, each Warrant entitling such owner to purchase, at any time [after 5:00
p.m. New York time on , 19 and] on or before 5:00 p.m.
New York time on , 19 , $ principal
amount of [Title of Warrant Securities] (the "Warrant Securities"), of Philip
Morris Companies Inc. (the "Company"), issued and to be issued under the
Indenture (as hereinafter defined), on the following basis: [on
, 19 the exercise price of each Warrant is $ ; during the
period from , 19 , through and including
, 19 , the exercise price of each Warrant will be $
plus [accrued amortization of the original issue discount] [accrued interest]
from , 19 ; on , 19 , the
exercise price of each Warrant will be $ ; during the period
from , 19 , through and including ,
19 , the exercise price of each Warrant will be $ plus
[accrued amortization of the original issue discount] [accrued interest] from
, 19 ; [in each case, the original issue discount will be amortized at a %
annual rate, computed on an annual basis, using a 360-day year consisting of
twelve 30-day months] (the "Warrant Price"). [The original issue discount for
each $1,000 principal amount of Warrant Securities is $
.] The holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full, [in lawful money
of the United States of America,] [in cash or by certified check or official
bank check or by bank wire transfer, in each case.] [by bank wire transfer] in
immediately available funds, the Warrant Price for each Warrant exercised to the
Warrant Agent (as hereinafter defined) and by surrendering this Warrant
Certificate, with the purchase form on the back hereof duly executed, at the
corporate trust office of [name of Warrant Agent], or its successor as warrant
agent (the "Warrant Agent"), [or ] currently at the
address specified on the reverse hereof, and upon compliance with and subject to
the conditions set forth herein and in the Warrant Agreement (as hereinafter
defined).
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities in registered form in denominations
of $ and any
A-1
<PAGE>
integral multiples thereof. Upon any exercise of fewer than all of the Warrants
evidenced by this Warrant Certificate, there shall be issued to the holder
hereof a new Warrant Certificate evidencing the number of Warrants remaining
unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of , 19 (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the above-mentioned office of the
Warrant Agent [and at ].
The Warrant Securities to be issued and delivered upon the exercise of
the Warrants evidenced by this Warrant Certificate will be issued under and in
accordance with an Indenture dated as of August 1, 1990 (the "Indenture"),
between the Company and Chemical Bank, as Trustee (Chemical Bank and any
successor to such Trustee being hereinafter referred to as the "Trustee"), and
will be subject to the terms and provisions contained in the Indenture. Copies
of the Indenture and the form of the Warrant Securities are on file at the
corporate office of the Trustee [and at ].
This Warrant Certificate may be transferred when surrendered at the
corporate trust office of the Warrant Agent [or ] by the registered
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the limitations provided in the Warrant Agreement.
After countersignature by the Warrant Agent and prior to the expiration
of this Warrant Certificate, this Warrant Certificate may be exchanged at the
corporate trust office of the Warrant Agent for Warrant Certificates
representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including, without
limitations, the right to receive payments of principal of, and premium, if any,
or interest, if any, on the Warrant Securities or to enforce any of the
covenants of the Indenture.
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<PAGE>
This Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
Dated as of , 19 .
PHILIP MORRIS COMPANIES INC.
By__________________________
Attest:
__________________________________
Countersigned:
__________________________________
As Warrant Agent
By________________________________
Authorized Signature
A-3
<PAGE>
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash
or by certified check or official bank check or by bank wire transfer] [by bank
wire transfer] [in immediately available funds] the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department,
[insert address of Warrant Agent], Attn.: [or ],
which [payment] [wire transfer] must specify the name of the holder and the
number of Warrants exercised by such holder. In addition, the holder must
complete the information required below and present this Warrant Certificate in
person or mail (registered mail is recommended) to the Warrant Agent at the
addresses set forth below. This Warrant Certificate, completed and duly
executed, must be received by the Warrant Agent within five business days of the
[payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise
Warrants, evidenced by this Warrant Certificate, to purchase $
principal amount of the [Title of Warrant Securities] (the "Warrant Securities")
of Philip Morris Companies Inc. and represents that he has tendered payment for
such Warrant Securities [in cash or by certified check or official bank check or
by bank wire transfer, in each case,] [by bank wire transfer] [in immediately
available funds] to the order of Philip Morris Companies Inc., c/o [insert name
and address of Warrant Agent], in the amount of $ in accordance
with the terms hereof. The undersigned requests that said principal amount of
Warrant Securities be in fully registered form in the authorized denominations,
registered in such names and delivered all as specified in accordance with the
instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instruction below.
A-4
<PAGE>
Dated: Name______________________________
(Please Print)
Address___________________________
________________________________
(Insert Social Security or Other
Identifying Number of Holder) __________________________________
Signature_________________________
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at__________________________________________
__________________________________________
__________________________________________
__________________________________________
By mail at__________________________________________
__________________________________________
__________________________________________
__________________________________________
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants--complete as
appropriate.]
A-5
<PAGE>
Assignment
(Form of Assignment To Be Executed if Holder Desires
To Transfer Warrants Evidenced Hereby)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address including zip code)
________________________________________________
(Please insert social security or other
identifying number)
________________________________________________________________________________
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.
Dated: ________________________________________________
Signature
(Signature must conform in all respects to name
of holder as specified on the face of this
Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member
broker of the New York, the American, Midwest or
Pacific Stock Exchange.)
Signature Guaranteed:
____________________________
A-6
<PAGE>
Exhibit 5
January 29, 1998
Philip Morris Companies Inc.
120 Park Avenue
New York, New York 10017
Registration with the
Securities and Exchange Commission of
Debt Securities and Warrants to Purchase Debt Securities
--------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Philip Morris Companies Inc., a Virginia
corporation (the "Company"), in connection with the registration with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Act"), of $5,000,000,000 aggregate principal
amount of Debt Securities and the filing of Post-Effective Amendment No. 1 to
Registration Statement No. 333-16955 relating to $87,550,000 aggregate principal
amount of Debt Securities (together, the "Debt Securities") and Warrants to
Purchase Debt Securities (the "Debt Warrants").
We have examined originals or reproductions or certified copies of such
records of the Company, certificates of officers of the Company and of public
officials and such other documents as we have deemed relevant and necessary for
the purpose of rendering this opinion, including, among other things, (i) the
Articles of Incorporation and by-laws of the Company, (ii) resolutions of the
Board of Directors of the Company (the "Resolutions") authorizing the issuance,
offering and sale of the Debt Securities and the Debt Warrants, (iii) the
Company's Registration Statement on Form S-3, as amended (No. 333-35143),
relating to the Debt Securities and the Debt Warrants and the Company's Post-
Effective Amendment No. 1 to Registration Statement No. 333-16955 (the
"Registration Statements"), (iv) the form of the Indenture dated as of December
2, 1996 (the "Indenture") between the Company and The Chase Manhattan Bank, as
Trustee (the "Trustee"), relating to the Debt Securities and (v) the forms of
Debt Warrant Agreements (the "Debt Warrant Agreements") between the Company and
a debt warrant agent (the "Debt Warrant Agent"). In this examination, except
<PAGE>
Philip Morris Companies Inc.
January 29, 1998
Page 2
with respect to documents executed by officers of the Company in our presence,
we have assumed the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
reproductions or certified copies and the authenticity of the originals of such
latter documents.
Based upon the foregoing, we are of the opinion that:
1. The Indenture has been duly authorized and assuming due authorization,
execution and delivery thereof by the Trustee, will constitute a valid and
legally binding instrument of the Company enforceable against the Company in
accordance with its terms; and the Debt Securities have been duly authorized
and, when the final terms thereof have been duly approved by all necessary
corporate action and when duly executed by the Company and authenticated by the
Trustee in accordance with the Indenture and delivered to and paid for by the
purchasers thereof, will be legally issued and valid and binding obligations of
the Company enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
2. The Debt Warrant Agreements have been duly authorized and, when the
final terms thereof have been duly approved by all necessary corporate action
and when duly executed and delivered by the Company pursuant to the Resolutions
and assuming due authorization, execution and delivery thereof by the applicable
Debt Warrant Agent, will constitute valid and legally binding instruments of the
Company enforceable against the Company in accordance with their terms; and the
Debt Warrants have been duly authorized and, when duly executed by the Company
and countersigned by the Debt Warrant Agent in accordance with the applicable
Debt Warrant Agreement and delivered to and paid for by the purchasers thereof
pursuant to the Resolutions, will be legally issued and valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms.
The opinions set forth above are subject to the qualifications that (a) the
validity and enforcement of the Company's obligations under the Indenture and
the Debt Securities, and the Debt Warrant Agreements and the Debt Warrants may
be subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and to general equity
principles and any implied covenant of good faith and fair dealing (whether
considered in a proceeding at law or in equity), (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought and (c) with respect to the enforceability of
the Indenture, no opinion is expressed with respect to Section 516 thereof.
<PAGE>
Philip Morris Companies Inc.
January 29, 1998
Page 3
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statements and to statements referring to our firm under the
caption "Validity of Debt Securities and Debt Warrants" in the Prospectus that
forms a part of the Registration Statements. By giving such consent, we do not
admit that we are within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
04926/02542/07669 /s/Hunton & Williams
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-35143 on Form S-3, which also constitutes Post-
Effective Amendment No. 1 to Registration Statement No. 333-16955 on Form S-3,
of (i) our report dated January 26, 1998, on our audits of the consolidated
financial statements of Philip Morris Companies Inc. (the "Company") as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, which report is included in the Company's Current Report on
Form 8-K, dated January 28, 1998, and (ii) our report dated January 27, 1997, on
our audits of the consolidated financial statements of the Company as of
December 31, 1996 and 1995, and for each of the three years in the period ended
December 31, 1996, which report is included in the Company's Current Report on
Form 8-K, dated January 30, 1997, and (iii) our reports dated January 27, 1997,
on our audits of the consolidated financial statements and financial statement
schedule of the Company as of December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996, which reports are included or
incorporated by reference in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996. We also consent to the reference to our firm under
the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
New York, New York
January 29, 1998
